Not exactly right, old fund doesn't mean it won't go up, performance wise all depend on their protfolio aka stocks they are holding. New fund and old fund doesn't make any difference, the different in performance come from their protfolio.

Different funds have different strategies and investment are done based on the prospectus set and under trustee supervision. They can't go beyond their scope under the trustee agreement and prospectus set. Just like if the prospectus of the bonds fund is aiming at invest in bond, they can't go to stock market to buy equities.

The primary reason of new funds keep on coming out is because investment bank or UT company can make more money through it (comission/front end load/management fee), also there are plenty demand out there after several years of equities bull run that people look at their past few years (UT) performance which is way beyond their conservative FD deposits. I don't say future will be the same nor UT is good nor bad to invest currently, don't get me wrong here.

The more new fund with new strategies will keep some interest investors out there. Just like people saw oil price keep on shooting up then they want some sort of fund that invest in oil or oil company (resources) etc. so it is a demand and UT company meet the demand by launching resources fund etc.

This post has been edited by cherroy: Sep 18 2007, 03:16 PM

This is quite true and people persume it is 'cheap' but actually it is the same. Either they launched IPO price at Rm1.00, Rm0.50 or Rm0.25 makes no different. But a lot of folks out there see the Rm0.25 is 'cheap'. I came across an aunties say want to choose the RM0.25 one but don't want the Rm1.00 by saying the RM1.00 is more expensive but don't know the different between the two funds nor knowing what are the fund investing.

This is the advantage of having old fund, no doubt. Meanwhile, there are plenty of new funds that come with different sectors play. Both have pros and cons.

Personally think the currently, you can't classify current market condition as down nor bear. Look at bigger picture and long term chart, still most worldwide stock markets are not far from its historical high.
Take a look on 5 years chart, still market is at high side.

But condition can change in the future which no one can predict correctly how it will be.

Instead new fund should be launched during bear market as time and time again, it proves that bear market (especially when recession near to end) is the time to pick up some good stock that price is under distressed despite company fundamental still intact. But launching new fund during bear market, I think fund house will have difficulty to sell it, that's why nobody want to launch new fund at that time instead launching during a bull run will receive overhelming response and fully subscribe.

Yes, fund portfolios are not static throughout, but not as frequent as some retailers, buy and sell in just few days. They will review their portfolio from time to time which depends on market movement, company fundamental etc. if nothing changes much, then they generally hold for long term, only trade small portion of their fund.

0.90 OR 0.30 makes no different, the upside potential is because of their portfolio stocks. If their particular stock portfolio is going up, its UT NAV can go 1.30 or 2 also. You won't see much becuase generally when they reached that level , they like to split it to make it small.

Service charge and management fee is calculated based on % of the total fund size, so whether it is 0.30 or 0.90, they still charge the same amount. People may think if service charge is 5% so 0.30 will charge less (0.015) as compared to 0.90 (0.045) but if you use 9k to buy both fund, the amount being charges still the same!

9K you get 10,000 unit of 0.90UT
9K you get 30,000 unit of 0.30UT

10,000 x 0.045 = 450
30,000 x 0.015 = 450

Still the same lar.

This post has been edited by cherroy: Oct 10 2007, 05:08 PM

Thread merged

Merged topic

Please post all regarding PM in one thread as if too many new thread being created which might be troublesome for some forumers to follow.

Thanks.

If you opt for the cash distribution then you get back the cash.
But if you opt for reinvest, then no effect at all.
Basically, your UT holding value is still the same for reinvesting, so no effect.
For cash distribution means you exit or lock in profit part of your investment.

At least for Malaysia case, no much different, while in US, realised capital gain is taxable, so there is some differences in it.

The most important in UT is to see the NAV keep on increasing over long term period. Distribution is giving out from its incremental of NAV aka profit from the fund.
So the main profit is come from the incremental of NAV <- when the fund portfolio makes profit, NAV increase daily or over the time.

Whether the fund got distribution or not, generally don't need to care much, the most important is too see its NAV incremental. As you said, the dividend/distribution is come from its NAV.

But due to people will comparing their invested UT with FD, generally fund managers will give out distribution so that UT holders knows there is profit made from their investment but in actual sense, the fund already making money.

My explaination quite rough, hope can undertand what I am saying.

Cheers.

This post has been edited by cherroy: Oct 26 2007, 10:10 AM

It is much more complex, if want to talk about the taxation issue.

This link got some explaination on the unit trust taxation issue.

http://www.cmstrust.com.my/pdf_files/maste...04/taxation.pdf

Bonds fund distribution is surely tax exempted.

Basically, yes. NAV it the ultimate barometer.

But if a fund can give high distribution generally it does come from the fund profit -> NAV incremental. If fund doesn't make any profit then where got the money to distribute.

It really want to convince people about their fund performance, it should be looked at the NAV incremental + distribution to get the total picture.

I can set up a fund at Rm1.00 then I give out RM0.06 (6%) but its NAV become Rm0.94 then next year give another 0.06 then NAV become 0.88 (assume fund doesn't make any profit/loss so NAV didn't move up or down). Then this kind of distribution has no meaning, just return the capital back to you.
But generally funds won't do that or not able to do. It basically fooling investors it they do it which will be easily spotted by investors which won't do good to the company reputation so nobody would do it.
Funds needed to stay invested at least 70-80% as written in trustee deal or prospectus.

This post has been edited by cherroy: Oct 28 2007, 11:15 AM

It just means they are not professional enough to give information to their UT holders. Should complain to the PM company then. Whatever news come out, it should be first listed/published on their website, not third party.

This post has been edited by cherroy: Nov 2 2007, 04:04 PM

Hard work is the key to success. Saving is a must to accumulate wealth.

Treat investment as a tool for your extra money to earn extra money.

saving + investment return = make you wealthy (faster)

Cheers.

Yes, distribution or not has not much effect. It is still back to square one unless for cash flow situation.

However, unit split is even more meaningless compared to distribution. Nothing is changed in unit split, just some psychology feel 'more' about the unit held, in fact, value or NAV won't have any effect.
I knew unit split generally will be implemented if NAV increase quite signficantly. For example a fund NAV increase from RM1 to Rm2, generally fund house will opt to split it let say 1:2 and make the NAV back to Rm1.00. But in fact, whether got unit split or not, it is actually carrying no real meaning as you still have RM2.00 in total whether got split or not.

What's matter is the NAV incremental over the time which mean its portfolio is making money over the time.

It depends, if at the time of reinvest, the NAV is higher than your initial purchased price then you average up rather than average down.

you get 3.75% only?

They want to give out distribution each time they can, although basically to normal investors has nothing beneficiary, but to the fund house, they can use the distribution history to lure new investors. They probbaly will say to future potential investors: look our fund giving out 10 cents last year, which yield better than FD. A lot of newbie and non-investment savy person will be tempted in it, just by looking the past or the history.

This post has been edited by cherroy: Dec 4 2007, 04:10 PM

ya, sorry for the previous post, forget there is no cash involved, my mistake.

Walau, PM itself also doesn't know the real actual distribution declared? How can it be? or there is some mistake in there?

No, this is not the right way of investing, you don't invest because there is Olympics, you invest because the economy and listing company prospect is good. For corporate, Olympics impact is/was already there as needs for infrastructure and capital input already in the economy system way before Olympics starts, about 2-3 years ahead.

Not means to recommend buy or sell or comment on the fund. Just don't invest because there is an Olympics games in near future. Economy is boosted way before the start of the game. Better look the China economy prospect to justify whether need or appropriate to invest in China related listing company.

Just my 2 cents.

Nobody get it exactly right one, if feel toppish why not profit take bit by bit, don't need to do all in once mah.
Just my suggestion, I might be wrong, don't blame me on the wrong move. Just joking.

I think you get the wrong number, prior before financial crisis, KLSE was trading above 20x or around 20x - 25x.
Only on super bull run 1993-1994, KLSE managed to trade at 30x plus.

PE at 20x is already somehow a little expensive if growth room upside not much, it only implied a potential 5% return rate which is not that attactive already. It is all about risk and reward. You don't take the high risk to get the return which is comparable to other safer investment tools

PE is a comparable and relative number a 15x in certain time is not the same 'expensive or cheap' level at 15x at other time.
It is depends on interest rate environment, future growth prospect, regional and global condition, liquidity condition etc. If the shares like Coca-cola is trading at 11x while ABC stock in KLSE is trading at 18x, if both growth potential is the same for both stocks for a global fund manager, which one they will choose or buy?

or if the interest rate is 2%, while PE is at 20x (5% return rate), in this case stocks seems attractive, but if interest rate is 5%, then 20x is bloody is expensive already *if consider there is not much future growth for stocks or economy is not growing. On the other hand, if company earning is expected to grow significantly like 30% or more, then even at current PE of 20x seems cheap enough as future earning will drag down its PE, that generally called PE expansion. So whether KLSE has room more upside is largely depends how well the company financial result will be. If company results don't improve as same pace with the rise of the share price/market then it is not sustainble, on other hand, if they do report good result overall then it has room for more upside.

So one can't take the PE number of 17 or 20 to say stock is cheap straight away, PE is not a magical number, it only will be a powerful figure or useful figure for one to make comparison and justification. PE number alone can't tell the whole story, need to look at broader picture to justify it as it is all about risk and reward ratio.

Just my 2 cents

This post has been edited by cherroy: Jan 12 2008, 04:36 PM

Nvm my 'air view' as each person has individual opinion and view which someone can disagree upon.
I can accept disagree view with open minded, only then my knowledge and information can be improved.

Just, I had followed the market fundamental since 1993 which I posted based on my experience but I don't make up something I don't know about, If I can't beat Tiger Wood then I don't say I beat him. But If I beat my friend xyz, then I said I did beat him/her, on the other hand, if I lose to abc then I said I lose to abc, simple as that.
I don't need to make up the number as I gain nothing.
If someone don't believe, then let it be, no harm done at all.

KLCI was less than 300 points only at one time during the financial crisis, is mainly because of severe recession due to financial crisis, it didn't crash because of high PE (although high PE is one of the reason but not the entire reasons), it has to do with the unsustainable high current account deficit which is the main reason was being hit hard on the currencies part. Malaysia did register -8% of GDP if not mistaken soon after the financial crisis.

But what I said on the PE as relative number has sound footing, don't look purely on PE figure alone to justify.

Cheers.

---

Added on January 12, 2008, 5:48 pmAs said it is up to individual choice. One may want to invest in UT, the other want to do it by himself/herself by selecting individual stock, it is personal preference, there is not right or wrong. You can't call the other foolish by investing on their own. They can have better record and control than the fund managers or can have poorer record. It is the individual choice, and get the reward or pay the price for taking the choice.

Just recent years, equities are having a significant good time overall, If the UT is performing at 15% return rate pa. for this 2-3 years considered poor already. But may be you haven't seen the bad day or years, doesn't mean it won't have one, there are times UT are struggling to make a return at all. Look at some regional and global properties funds recently, hit hard more than 20-30% drop.
Sometimes, invest in UT needs to have timing and know to exist at high points, don't need exactly but roughtly is good enough already. Equities and economy won't go straight line up, in between, there is hiccup somewhere.

Learning into it, doesn't mean one needs to invest on their own, it only let one to have clearer picture and understanding. Just like you trust your fund managers to do investment for you, fine, no problem, quite correct, but it doesn't mean you need not to know what are they doing? It is not challenging them, it is to know what are they doing on your money.

This post has been edited by cherroy: Jan 12 2008, 05:51 PM

Fund managers are not god, they are human like us, they just are the person more familiar and doing business in this industry, they can have the same knowledge as you and me if one really learned. (Not that difficult to learn also actually).
Invest in stock market doesn't need much times, only simple fundamental analysis already can justify on it especially some good stocks. You don't look at 1000 counters to look upon.

As said if you believe so, don't need to learn and know about it then it is individual preferences which I had nothing to say nor I can disagree
Another points almost every fund in the market are making hefty return in these 2-3 years or 5 years like you said, nothing to shout about. One should look and salute on those consistently beat the market average return.
Equities market in most countries had risen more than 100-200% in this period of time.

Good luck.

This post has been edited by cherroy: Jan 12 2008, 06:08 PM