Yup.

DDI works better than lump sum if the fund performance like
Start
1.00
0.90
0.80
then 1.00
and finally 1.20.

That's why I said DDI only works well in certain circumstance. If only works well in circumstances which depended how situation unfold and not a foolproof to eliminate the risk. In real term, more risk being taken due to more money being committed into the same fund.

I know every agent will push hard on DDI, I won't discourage or encourage on this.
But investors deserved to know the flaw and potential risk of DDI that can make greater loss in the future.
The statement of DDI works well doesn't necessary true.

Check everyday newspaper got publish, banks website also have, and the fund house website also got.

The NAV of the fund is changing everyday based on their worth of investment which is based on market price of their underlying portfolio (or shares/bond they bought).

The NAV increment/decrement is the ultimate barometer how the fund is performing.

This post has been edited by cherroy: Jan 12 2012, 02:10 PM

Should be

Down down down means DDI triple down.

It is considered poor. (at least until to date now, doesn't mean future is better or worst)
Why?
Because with this kind of performance, one is better off with FD.
4 years in FD at least give you around 12% already without such risk exposure.

Bond fund is not foolproof or must 100% safeguard your money.
You need to know the bond fund risk appetite, different bond fund invested in different type of bond.
Some more into higher quality bond, with less return,
some more into lower quality one, but can get better yield.

And low quality bonds are subjected to high risk of default.
Once defaulted, bond fund can lose money as well.

Because previously many anticipated BNM to cut rate, but it didn't materialise.

Bond is sensitive to interest rate situation and interest rate expectation.

If one forsee inflation threat, with economy situation turn better, equities may perform better than bond.

Also watch the distribution, any distribution will cause the fund NAV to drop as well.

This post has been edited by cherroy: Mar 16 2012, 01:57 PM

First, there are funds out there that outperform the index, while there are funds also underperform.

So when you draft a prospectus for a new fund, do you choose a fund that loss 50% as example in the prospectus to show how well an equity fund can be?
or you choose a fund that beat the index as in the prospectus to show how well historical an equity fund can perform?

Bare in mind the what stated inside that prospectus is not an indicator nor guarantee how well a new launching fund will be performing.
It may just show how a fund performed for the last 3 years, 5 years or 10 years.

Nobody insist no SC.
But to a more fairer system or more competitive rate.
Stock broker can survive and earn profit with earning less than 1% commission, while UT industry need >5% SC + 1~1.5 annual management fee?

Mind that stock broker won't earn a single cent when there is no transaction done aka no buying (no buy will lead to no sell, as here short is prohibited), while UT industry still earn decent 1~1.5% annual management fee even there is no new investor invested in the UT.

I believe investors do not mind to pay high SC fee for an UT that can outperform the benchmark and give a double digit return.
But the problem is, we had seen even a fund the make the investors loss 30-50%, the fund still charging the same amount of SC and annual management fee. No different with an outperform fund.

The distribution did not help you to make money in the fund.
The improvement of the fund NAV is because its underlying appreciate in value.
Nothing to do with the distribution or not.

Distribution or not, make no different one for UT. This is an ultimate fact.

More unit at lower NAV = higher NAV in less unit.

Just the number game difference only. (if opt for cash distribution then different story a bit, as opt cash distribution = selling a portion of unit before distribution).

There is little benefit from distribution, more unit /= benefit.

If said personal preference then, it is deem personal issue, which is different story.

The fund pricing mechanism needs to be standardised.

Some fund start at RM1.00, some fund at RM0.50, some at Rm0.25.

All have no difference, but the fund start at Rm0.25 sometimes can give wrong impression to newbie investors think it is cheaper than Rm1.00 one.
In reality, it is not and totally unrelated.

I would like to see SC come out a guideline so that all fund start at Rm1.00 across. I don't see any real benefit for investors the start off pricing at Rm0.25 or RM0.50.