Thanks David83, nice job.

Actually a lot of people being lure to captial guaranteed fund because of the word 'capital guaranteed'. For those who afraid to lose money in investment, it is a perfect choice or 'bait' for them. I use the word of 'bait' because some of investors of the fund don't actually know how capital guaranteed work, they just know it is guaranteed not losing money. Often, we heard from agents, hey this product is good, it won't let you to lose money one, while potentially to earn more than FD return, then normally without much thinking deeper, mostly will interested one, right?

In Malaysia, there are a lot of people still not that investment savy, so headline can make a lot of difference like the word capital guaranteed. No offence, please don't get me wrong here. It is also one type of different risk investment product out there which might suit to a particular individual risk preference. Just nothing to shout about the word of capital guaranteed.

As I mentioned long time ago, as leekk8 posted. Actually around 10% of the fund being put into work only.

Mostly they work in this way, initial fund being split to 10% : 90%.

So those 90% will invest in money market or bonds which is highly secured with triple A rating etc, even one keep in FD (3.7%), after three year it becomes 100.36% already. Then capital guaranteed purpose is achieved! How simple is that (capital guaranteed), still give a guaranteed return of 0.36% after 3 years.

Then the other 10% money use to buy those high risk stuff to maximise the return like options, futures etc, (equities or stocks might be out of question or scope because it can't generate as much as compared to options if the bet is right or favorauble as according to market condition)

If those 10% money win big then it generate good return to investors. But even 10% money gain 100% in this 3 years time, for overall fund, it only generate 10% return of the total fund only. So final 3 years return is 0.36% + 10% = 10.36%.
So those 10% money has its limitation, that's why most go for options market which is the place its can maximise its return (1 buck can gain 2-3 buck in option market, just like CW stuff we are familar with, you buy 1 cents CW, then next few month, being pushed up to 3 cents, you gain 200% already!) but if market condition not favourable, then lose all togethet but still total fund money will stay at 100.36% at least or higher than that if put into gov bonds, money market etc lah, just illustration only.

Normally after 3 years, mostly people when received the 10.36% return (as above eg.) (for the last few year, it is almost impossibe to make negative return if invest time horizon is from 2004-2007 as worldwide equities is on bull run) then mostly will say, ok, still gain some money (10.++)% for me. But he/she might forget, if put in FD 3 years, one also get 11.1%. <--- this is where most people forget about the opportunity loss. It is considered 'loss' in investment scope or standard of comparison already.

Actually a lot of us are working on capital guaranteed structure on ourself, just without notice. A person has 50K of FD, he/she takes out 5-10K to invest in stock market or whatever, while 40K being put in 3.7% FD, then after 5 years, his/her capital guaranteed target is achieved as after 5 years, as he/she surely got at least 50K even when the shares go burst.

Don't get me wrong, I don't say capital guaranteed fund is not good. It might good or suit to someone risk appetide. Just try to see the capital guaranteed issue from different perspective, then one will know capital guaranteed is not something rocket science nor because of fund managers superiority which can make the fund become capital guaranteed. Again no offence and get me wrong on this, I fully respect fund managers proffesion.

Cheers.

This post has been edited by cherroy: Jun 17 2008, 09:39 PM

Yes, it is true, bonds can be default as well one, even gov bonds.

Yes you are perfectly right, that's why I said, anyone can make 'capital guaranteed fund' themselves as pointed out my earlier post, if they are knowing what they are doing or more investment savy.

Set aside you own portion of fund (that you wish to invest a capital guaranteed fund), then keep 90% in FD then the rest is investing in high risk stuff to maximise the return then you are actually investing yoourself in your own tailored made capital guaranteed fund already.

Having said that, those capital guaranteed funds out there are cater for different type of investors out there. As individual might have no access or not enough knowledge to venture into high risk stuff, so need the service of fund manager to tailor made for them. There is not right or wrong in investment world.

What I see is just a normal insurance saving plan only + investment link (a lot of investment link is using your money to buy UT only), nothing to shout about. Almost all insurance companies carry more and less the same structure.

Remember, there is no such thing as promise or not in insurance policy. Either it is guaranteed or not only in the policy. If it is not guaranteed, then it is not, whatever figure (projected) list out is useless.

Also the 25% return is pa or after 10 years? Also it might also a projected number based on historical data which doesn't promise nor guarantee you anything.

Don't get me wrong, it is no harm to find out more about, just must make sure clear everhthing about it before you bought, don't want to see people bought then after find out not as same as promise then regretted. (A handful of people bought insurance has this kind of situation). If it is indeed suit to your need then fine.

Just my 2 cents.

insaint,
It is for sure not a scam, no one said it is a scam either, just it is an insurance plan and this insurance plan is not something hu-ha or something very good until irresistable.

Basically, leekk8 has explained it quite detail, (the 25% return is return back your capital, not a pure return) the 10 years insurance plan return is comparable to FD while you get some extra protection for insurance part. That's all.

Don't get me wrong, we don't say it is not good, it might suit to someone who need it, but it is just a normal insurance plan with some extra benefits. That's all.

But on the word "the best way for you guys is to call any agent from HLA to meet them and ask them to explain such a plan, as i guess any HLA agent would be more happier to entertain you" sounds ambigious and people will think you are the HLA agent. As if you already bought the insurance or familiar with it, you can explain like leekk8 gives one, but not to tell people to call HLA agent, right?

No offence, we always welcome people to share information and give opinion, it is perfectly nothing wrong if you think it is a good plan.

This post has been edited by cherroy: Jul 15 2008, 04:58 PM

Islamic fund just means they are investing in those syariah compliant stocks only. It doesn't mean they must give more or constant return rate compared to conventional fund. It doesn't relate at all whether they are more steady or better. It depends on the performance of portfolio stocks they are investing.

It just happens previously those syariah compliant stocks are performing well. For eg. just like islamic fund can't buy Genting share, but Genting share did plunge recent few months, so those conventional fund buying Genting shares are having poor record than Islamic fund.

Yes, it is possible. But it is plain stupid to do so or in such way.
But if the fund manager is doing as you suggested, it is called insider trading, which is an offence to do so in all major bourses around the world. Stock Exhange around the world (especially developed one) is very keen to crack down those manipulation or insider trading to safeguard the integrity of the stock exchange, otherwise the exchange will be manipulated by interested party while others always at losing end of the game which eventually, people and investors no longer want to invest in it either eventually this stock exhange will be left out by investors.

I don't think many dare to put their job on the line which can be easily being exposed.
You risk your whole lucrative career on the risk just to gain some from the market? It doesn't make sense for most people.

Even leak out the news to others also can lead to insider trading charge.

This post has been edited by cherroy: Aug 10 2008, 09:19 PM

There are some restricition if one works as fund manager or this particular field, if not mistaken, just like remisers can't open own or his spouse account with the investment bank they are working with etc.
Husband and wife is treated same entity most of the time, depended on the rules and regulation set respectively.

Relevant authority is not stupid either, they will investigate the timing of it. Even if one escape with the breach of the law with black and white (just like you mentioned, use relatives account to trade) but the company surely raise the suspectibilty on it which won't be good for your career. Fund managers already can gain extra from the profit (in term of performance bonuses) they made in the stock market through fund investment, then still greedy want to make more personally?

Again, just like said before, you don't risk your whole career just to gain some out of it (which also no guarantee as explained as below). Trust is important is this aspect, same with doing business, once one loses the creditability of the trust, then your whole career in this field (even in businesses) basically spoilt. No matter how good you are, nobody will dare to hire you nor doing business with you (in term of businesses).

Creditability of trust built over time, but can be spoilt overnight.

Also, just to point out, even if you are the fund manager and your fund has decided to buy a particular stock, there is no guarantee the stock will go up either. A single fund manager can't push up the stock alone even for like of EPF, even they buy aggressive in the market, but if market sentiment and market force is against it, they are powerless to drive up the stock price alone. A few tick may be, but sustainability of the share price depends on general market force, not a single or 2 investors (even though they are huge).

I only opt for unit trust (I did before quite significant also) in order to access the global equities market much easier. Locally, can easily mimic the portfolio of local fund by our own if wish to, so won't go for local fund. Just personally preference, nothing right or wrong.

I was very keen on global properties fund previously, make some decent gain also, sold off all in the early 2007, until now not yet entering back. Now start to considering back. But it would be a long road recovery for those properties stock and reits stocks as well.

This statement is poorly described. Investors don't now what they will invest in either. Sound very 'cheap' with the word 'hottest trend'. No offence.

For equities or stock market, it is not a zero sum game, when stock rise, everyone is a winner/gainer, there is no losser, but when stock drop, everyone is a loser except those short-sell one.

For futures market, like index futures, oil futures, yes, it is a zero sum game. A gain come from other people loss.

No fund will able to guarantee you any consistently return rate except FD.

Equities market has cycle just like economy, there are some period with magnificient performance, there are some period with poor performance. Just over the long term (talking of really long like 5 to 10 years), some good funds or good stocks able to give one average return rate of xx%, but surely it is not consistent.

If one bought at peak of the cycle then it would be a long painful process. But if one bought at bottom then it would be an enjoyable process.

Always do your own research and due diligence to decide.

For sure it won't drop to 0.

The problem of China related fund is that those fund when launching were at the peak of China market.
Even though economy is cyclical so does stock market, but buying at peak might mean when other already making money when stock market goes back up time, you still nursing the losses and look for breakeven point.

Just for simple chart to look at. Most people bought China fund during second half of 2007, so mostly are buying at their peak.

Chart qouted from Yahoo Finance.

This post has been edited by cherroy: Aug 19 2008, 02:40 PM


Attached thumbnail(s)

There is no such thing of reasonable or cheap price to enter, the price of UT is depended on their underlying worth of the stocks they are investing. Up or down of the UT price is depended up or down of the equities stocks.

No offence. Most people invest in UT never think of this when they bought the fund. A lot of people are lured into it because agents or investment houses told them past previous year, this kind of fund has made 20% or 30% in the past. So they bought also and thinking in the future will be the same.

No offence to any agents out there, some do explain properly to the customers, just highlight the real situation out there and experience of it on a lot of UT investors out there.


For irenechong85 question,
Keep or sell or shift is much depended on individual view the future of Asean economy and its equities performance. If one thinks Asean bourses and economy will be robust and good, then keep it, if one thinks Asean economy will be in lot of trouble ahead then sell it.
So it much depends on individual view on the outlook of the particular fund investment target (as we have like Asean, China, European fund which invested in respective region). As it is individual hard-earned money in stake, it is individual decision to decide what to do with the money.

We can't tell people to sell or buy (it is an irresponsible act to do so), the most we can help is post the information regarding it, then let individual to judge on it. One thing is that don't expect quick money from UT, it won't work well. Don't expect, last few month buy, then will make profit after several months. It is a long term investment target, but having said that, it doesn't necessary making money even on long term, it depends on how economy situation play out and the entry point of yours, if one bought at market peak time, then it is much difficult to make money out of it or return rate won't be good even very long term or worst scenerio making losses even after years.

In general, good funds are posting quite good aveage (remember it is average, not consistent as every single year performance can be differ quite largely) return rate of teen number over the long term for the past 2 decade. But not all, and not necessary will. Equities performance is tight to the economy performance.
Also, individual entry point is another ultimate deciding factor that whether one will make money or make less money or loss.

A reminder, this is a fund (lUT, mutual fund) investment discussion thread, if keep on spamming and try to advertise your blog and investment scheme, it will lead to wa rning and suspension.

This post has been edited by cherroy: Aug 28 2008, 04:33 PM

Most of Public and PM equities funds always consist Pbbank as their top 5 holdings.

My opinion,
The main reason of why most funds tend to hold Pbbank is that, there are not much choice for big cap blue chips in Malaysia if excluding the GLCs (which performance wise most always lack behind KLCI benchmark).

I disagree on split as it is meaningless, instead without split, we can easily pin point out their performance over the time. Like some fund has increase from 1.00 to 2.00 or 3.00 over the time, then we straight away know, this fund has performed. But with constant split, then the price always stay around 1.00, which we need to dig out the history of split before can evaluating its performance.

But fund house wants to split so that it looks cheaper to lure more investors, which kind of 'cheating' as well (I know it is not cheat)
Somemore, nowadays, a lot of fund house want to start the unit price at 0.25 and 0.50 instead of traditionally 1.00, which I think purposely want to be seen as "cheap".

This post has been edited by cherroy: Nov 18 2008, 02:19 PM