Monday, 31 December 2012

Unit Trust Review - Hwang Select Bond Fund

I got myself invested in Hwang Select Bond Fund a couple of days ago and that got me motivated to review this fund for the benefit of the readers.

Basically, Hwang Select Bond Fund is one of the four Fixed Income Fund offered by Hwang Investment Management Berhad. Before reviewing this fund in particular, I would like to define what Fixed Income Fund means:

Fixed Income Fundfund that invests solely in fixed income investments, such as bonds or certificates of deposit. These funds are dependable and limit the amount of risk an investor takes on, although it could mean a lesser return that would be possible in a more risky fund.

Basically, a fixed income fund has a very low risk profile. Never the less, when selecting fixed income fund, care has to be taken to read the prospectus of that fund. Some fund managers in trying to get better returns for their fund tend to invest in bonds that have low credit rating. (Read more on Bond Credit Rating HERE)

The lower the Credit Rating, the higher the return is. On the downside, the risk of the bond defaulting increases as well. The point I am trying to make is that when reading the prospectus of a Fixed Income Fund, make sure to check out the type of credit risk that a particular fixed income fund is investing in.

Ok, now back to reviewing Hwang Select Bond Fund!

Comparison of the 4 Fixed Income Fund from Hwang Investment Management Berhad

Fund Info (Click to Enlarge):

Summary of Fund Info: 
1. Being the most popular fund, the Hwang Select Bond Fund has the biggest fund size among the four funds. A clear indication that this fund is by far the most popular Fixed Income Fund offered by Hwang. 
2. The risk rating of 2 indicates that the fund does not take unnecessary risk on their investment. 
3. The fund's Annual Expense Ratio of 1.11% is considerably lower then other funds. Furthermore 1.11% is also lower then the average fund expense ratio of 1.5-1.8%. (Want to know more about Annual Expense Ratio? Click HERE)

Fund Performance (Click to Enlarge):

Summary of Fund Performance:
1. Its pretty clear that Hwang Select Bond Fund is by far the best performing fund among the four. 
2. The 6.78% per annum return by Hwang Select Bond Fund over a 5 year period is by far outperforming our 3% Fixed Deposit rate offered by local banks.
2. In fact A 6.78% annual return outshines even some of the higher risk funds.

Hwang Select Bond Fund Performance Against Benchmark (Click to Enlarge):

1. Against the Fixed Deposit Rate benchmark, Hwang Select Bond Fund has been outperforming the benchmark for the past 5 years.
2. Need I say more?

Hwang Select Bond Fund - Investment Nature:
Now that the fund's general requirement has been explained, we next take a look at the nature of investment of this fund.

A quick check into the fund's prospectus indicate that the fund invest only in Bonds with credit rating ranging from AAA to BBB. (Investors should be on a lookout if a Fixed Income Fund are invested into Bonds that have lower then BBB rating. There's a high possibility of low rating bond getting defaulted or failing to meet the agreed returns.)

Shown below are the credit risk list invested by Hwang Select Bond Fund as of 30 June 2012:

In line with the theme of this blog, investing should be made easy. Therefore what's important when selecting a Unit Trust Fund is to understand the charges, the fund's performance and lastly the nature of investment of the fund. With these three basic factors covered in the review above, I believe Hwang Select Bond Fund is indeed a great Fixed Income Fund to invest in.

Cheers and Happy 2013 everyone!

MY Investor


  1. AmDynamic Bond used to be better. But I think it's now closed due to fund size exceeding limit.

  2. David, it's true that the AmDynamic Bond is the best performing Fixed Income Fund but alas it is no more available.

    Although AM has released a new fund that is supposed to be the successor for AmDynamic Bond, the performance of that fund is still unproven. Apart from that, the Annual Expense Ratio for this new fund is also much higher as compared to the AmDynamic Bond. That would surely reduce the returns of this new fund.

    Well my options are open and shall continue to monitor the new fund performance for the coming year.

    Cheers and Happy 2013!