that is also on a best effort basis. no investment is ever guaranteed.

The Public Enhanced Bond Fund (PEBF) and Public Institutional Bond (PINBOND) is closed at the moment

Hello besiegetank,

I'm no expert at the subject matter but i'll do my best to answer yr questions:

1) there's 2 types of return in UT investment namely, capital growth and distribution. hence, to answer yr question UT distribution is actually a form of ROI. Sometimes, it's the fund manager playing with investor's psychology in distributing the profit from the fund because many unitholders (unfortunately) still associates a fund performance solely base on its distribution.

2) First of all, you need to ask yrself, "what's your retirement number?" once you've got it then a portfolio of UT investments can be constructed based on yr risk appetite and investment time horizon to meet that goal. Hence, the question of which fund to save in will arrive to what are your needs in the first place.

3) IMHO, all investments are focused value appreciation. The terms used above are different types of capital appreciation that would be experienced by the investors. Below are the terms explained to the best of my knowledge:

Capital growth - increase in the value of the units over time. these type of funds usually do not give distributions. eg: PCSF price per unit is at 0.25 sen on 2009 compared with 0.15 in 2008

Fixed income - usually money market and bond funds as these financial products aim to pay a certain amount of interest on the capital every year. their focus is to give distribution every financial year to the investors and not price movement i.e capital growth.

Dividend or distribution - focused on giving distribution every financial year to the investors. how is it different from fixed income u might ask. well, the answer's simple, the term dividend/distribution tells you that the source of that income is not from bond or money market but it's from stocks listed that have a good track record of paying out dividends. hence, it's even more risk to the investor compared to a fixed income fund as the dividend is not given in fixed amount every year.

I hope the above explanation helps a little.

NightCrusader

Dear besiegetank,

I'm glad the explanation above helped. It's a good habit to always ask and have some information regarding any investment instruments that you would like to invest in. However, do take care not to suffer from a syndrome known as information overload And now to answer your questions:

1) Distribution increases the number of units in the fund and is reinvested at zero charge. Fund managers encourage it to capitalize on the compounding effects over time. for
eg: Mr A has two funds, 1000 unit of Fund A and 1000 units of Fund B. Fund A's distribution is reinvested every year while Fund B is payout.
if distribution is RM1/unit for both funds
Fund A- 1000 units + 100 units from distribution=1100 units
Fund B- 1000 units + distribution payout =1000 units

2nd financial year, assuming distribution is the same and price per unit is RM0.50, we get
Fund A- 1100 units + 100 units from distribution=1200 units (RM600)
Fund B- 1000 units + payout =1000 units (RM500)

The difference in that amount may be small but over long terms like 30 years the difference is very significant due to compounding effect. However, this doesn't mean any form of ROI is better than the other. It really boils down to the investor if they feel more comfortable with distributions or capital growth as long as they meet their investment objectives.

2) A consultant has responsibility to do a retirement planning for you to help you reach the amount desired after 30 years. A half-yearly or yearly review of yr retirement blueprint is highly recommended. Normally the UT portfolio will comprise of a mix of fund types to help u achieve a certain % on yr ROI to help u reach yr financial goal.

3) The fund manager will send a statement after the distribution showing you the net payable after deducting all the relevant expenses like income tax and management fees. Alternatively, u can contact yr agent to know the ROI of yr fund.

Regards,
NightCrusader

Dear mmusang,

Could u please clarify yr statement regarding the high charges of pb bond is relative to what? As far as i know, they only charge 0.25% of yr amount invested. It's very little considering the approximate 5% to 7% p.a. return. Please correct me if i'm misinformed.

I also would like to add to the answer from mmusang on question 2 by wirelessdude. I would like to reiterate that the 1st golden rule of ANY form of investment is this: NO investment is 100% safe. there's only risk that should be understood and managed in every investment.

Regards,
NightCrusader

Actually all PM bonds are of the high grade type. they don't invest in grade B bonds and below. However, you're right on the understanding the risk before investing part. Every investor must understand the risk involved in their investments.

Dear wirelessdude,

Hmm...tough call cause up to this year the best performing bond is still Public Islamic Bond Fund with an annualized return since inception (15/08/2001) at 6.27% while the closest performance is by Public Bond Fund with 10-year annualized return at 6.88%

Source: Quarterly Fund Review (Q3, 2009)

Hope that helps

Regards,
NightCrusader

Nope, it's just that it requires more forms and stringent rules regarding how to fill them and etc. Every time invest must attached photocopy IC and thumbprints. A lot of red tapes only, halal or non-halal is up to you.

5% - 6% is the typical return of bond fund. Equity funds have around 8-10% return but with higher risk of course. worth or not is up to your risk appetite. If you would like to retire with a bigger nest egg and don't mind taking the risk, why not invest using EPF? after all, you can't touch the money for other purpose till your retirement anyway.

Yes, there's a limit according to age. If u would like to do regular investment, u can tell your agent to put some into the money market fund and switch every month. Should be enough to last you till your next withdrawal. If EPF dpn't have that much to take out then you can still invest it when it reaches the required amount.

Smallcap fund has good dividends but let's not forget capital growth as well. It's heavily invested (99.9% of NAV) in the country. Hence, the fund performance will be greatly affected by the local economic conditions. Remember, pass performance is not an indication of future performance. hence, the dividends may be good some years and average in some.

yes, you'll be charged 5.5%/ month.

yes u can as long as u have the 9-digit fund account number.

My bad. David's right. Today i just went deposit money into fund. Can't do it through the cash deposit machine. ATM definitely can.

Yes you're right. It'll be launched on the 19th January (Tuesday)