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):

Summary:
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:

Conclusion:
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

Sunday, 30 December 2012

The General Election 13 Factor

I read with interest of an article published by theStar today. Speaking to six fund managers on what's in store for us in 2013, I have decided to summarized the key points of the article for readers. Never the less, if you would like to read the full story, click HERE.



Danny Wong, Areca Capital (CEO)

If the global economic outlook continues to improve and the regional markets sustain or keep the bullish tr end, I believe that Malaysian equities will become “the star”, provided there is no major surprises from the GE.

China's focus may be shifted to economic policy action and stimulus to ensure its GDP for the next decade doubles (or grows at a yearly rate higher than 7% over the next 10 years).


My major concerns for 2013 are an unfavourable GE outcome (such as a smaller majority government), a full-blown EU crisis and high inflationary pressures caused by governments' “spending” or excessive quantitative easing.


I prefer large-cap defensive high-yield stocks until the GE is over and I will allocate some money for cash/short-term fixed income for opportunity.


I would pick up index-linked stocks whose prices slump during this period. When the certainty of the GE becomes clearer, I would switch to high-growth stocks, in particular higher beta names.


In general, my top three sectors are banking, plantation and telcos and mid-smallcaps names like Can-One BhdKumpulan Fima Bhd and Hartalega Holdings Bhd.

Thomas Yong, Fotress Capital Asset Management (M) Sdn. Bhd., (CEO)

Main uncertainty in the near term is the timing and concerns over the outcome of the GE


Observations from recent releases of economic data from the US and China indicate an improving external environment.


Barring any unforeseen circumstances, the Asian economies and equity markets are likely to fare better in 2013


We have maintained minimum exposure to the Malaysia market, and this posture will be kept until after the GE


we prefer stocks that will benefit from an improving external environment and avoid stocks exposed to government policy changes risk, such as subsidies, etc. In the early part of the year, our client portfolios will continue to posture towards the positive re-rating in Chinese and Hong Kong equities.


Tan Teng Boo, Capital Dynamic Asset Management Sdn. Bhd., (Managing Director)

Globally, in contrast to the consensus view, Capital Dynamics is optimistic. Locally, in contrast to the popularly held view, it is timid.

Geoffrey Ng, Hong Leong Asset Management Berhad, (CEO)

The Malaysian market faces a large political- risk-driven event during the early part of 2013 with the impending GE. Investor sentiment will remain guarded during this time.


Our strategy going into 2013 is to remain defensive and with a fairly high cash allocation.


We, however, will hold conservative exposure to cyclical growth sectors such as oil & gas and construction, two primary beneficiaries of the continued ETP-led pump-priming programmes by the Government.

Chan Ken Yew, Kenanga Investment Bank Bhd (Research Head)

The long-awaited 13th GE has somewhat overshadowed market sentiment. This can be seen from the declining FBM Small Cap Index. The small-cap index has been trending down to 11,425.02 from its two-year high of 13,356.97 on Dec 13, 2012.


The weaknesses of the global economy could spill over into the first half of 2013 as the resolution for the Eurozone debt crisis remains uncertain. However, with a high probability that the US fiscal cliff would be resolved, and further signs of improvement in the US economy as reflected mainly in the housing and manufacturing sectors, we believe the global economy will have a fair chance to stabilise.


Furthermore, China's main economic indicators also showed steady improvement during the second half of 2012, which confirms that it is nearing the end of its two-year down cycle. 


We prefer to adopt a trading stance - Buying-on-Weakness' below 1,610 and Selling-on-Strength' above 1,710 in a rangebound market environment. 


We also reckon that consistent performer, defensive and high-yield stocks will still be the mainstream investment choices. 


As for sector selection, we are generally bullish on Banking, Non-Bank Financials, Oil & Gas and Power Utilities.


We are also optimistic on Consumer F&B as we believe that value has emerged following the recent price corrections here.

Mark Mobius, Templeton Emerging Markets Group, (Executive Chairman)

Two particular investment themes stand out to us: consumers and commodities.
The consumer theme arises from consumers in many emerging markets becoming increasingly wealthy while macroeconomic policy has increasingly been aimed at moving from export-based models toward ones fueled by domestic demand

The commodity theme reflects our expectation for strong growth in demand for hard and soft commodities as many emerging markets industrialise, likely grow wealthier and increase spending on infrastructure, which tends to tilt the balance between supply and demand for such products in favor of producers.

Overall View
It seems that all six of the Fund Management Companies above are concern about the upcoming GE. For me, the outcome of the election seems to be pretty bleak for the current ruling party as hinted by many of the fund managers above.

I'll probably be looking for Unit Trust that invest in China as the economy there is slowly recovering. Also I intend to sell some of my non performing shares in preparation for GE13. Gold is also another investment avenue which I am considering to increase my investment in. The price of Gold has dropped recently and I believe it is a good time to buy now.

Cheers and we look forward to 2013

Happy Investing everyone

MY Investor

Friday, 28 December 2012

Money Making Options In Malaysia

When I first started my working life, I was totally oblivious about long term investment. During that period, the salary I earned as an Engineer was considered meager while my parents ask me to save whatever I have in Fixed Deposit(FD) accounts.

Till now, the advice from my parents remain the same that is to save all I can in Fixed Deposit accounts. No doubt the fixed deposit account is the safest investment available with almost zero risk and promise of a fix annual return.With FD rates ranging from 3.0 ~ 3.5% per annum, every RM10,000 saved via FD promises a return of between RM300 ~ RM350 per year, guaranteed!

I remember fondly about a year into working life, I dabbled into the share market using a speculative method called contra. Never the less, it was a short lived experience as I find myself looking more often at share prices then concentrating on my work. It was ridiculous, time wasting, created unnecessary stress and was a constant distraction to me. Thankfully it was a short lived experience and I broke even on the profit and losses.

There were also some hiccups along the years where I was foolishly convinced into investing in a pyramid scheme that promises good returns. As always, the one's which normally lost money from pyramid schemes are the one's like me who entered during the end stages of the scheme.Never the less, I consider the money lost from it an education fee for me towards becomming a smart investor. 

Pyramid schemes or ponzi schemes, whatever you might call it still exist in Malaysia, always resurfacing in various forms and offering sub-standard products. Yet many Malaysians, blinded by greed as well as smooth talking agents continue to invest their hard earned money into it. The people who are actually making money are the one's who created these schemes and the people who sit at the top of the pyramid. Money made from foolish Malaysian who continue to pile up at the bottom of the pyramid.

As the saying goes, as we grow older, we become wiser. I don't claim myself as a wise investor as there is still so much more to learn and master. In truth I see myself as somewhat of an amateur investor, a little wiser then some who have zero knowledge on investment but stupid in comparison to season and experience investors. 

Now that aside, do allow this somewhat amateur investor share some knowledge on the available investment options in Malaysia.

1) Fixed Deposit (FD)
Like what I have stated earlier in this post, FD is the safest and most well known investment option available for Malaysian. With a promised return of 3.0 ~ 3.5% per annum, investors are guaranteed their returns annually. Apart from being the oldest form of investment in Malaysia, FD is pratically risk free!

2) Unit Trust (UT)
Unit Trust is defined as an organization which takes money from small investors and invests it in stocks and shares for them under a trust deed, the investment being in the form of shares (or units) in the trust. 

Simply said, unit trust is an avenue that provides small investors a chance to invest into shares, stocks or bonds. Like many of us who command a day to day job and a family to go back too, we might not have the luxury of spending time studying investment methods or analyzing the right shares to invest in, yet we would love our money to grow more then what can be offered by FD. 

Hence the existence of Unit Trust which provides investors with an opportunity to grow their money. By entrusting our money with Fund Managers (some experienced and some not), we allow the Fund Managers to decide what stocks and/or what investment vehicle that would bring us the highest possible returns.

With hundreds of Unit Trust Funds available, small investors are spoilt with choices of investment. Therefore before investing into Unit Trust, a few factors have to be considered such as:
1. The investment nature of a particular fund (Equity? Asia Market? Fixed Income? etc).
2. The risk factor for a particular fund. Higher risk funds tend to give higher returns and also higher losses.
3. The Fees and Charges incurred.
4. Historical performance of a fund.

In short, investing in Unit Trust is to entrust your money to a a team professional/full time investor and allowing them to decide the best possible investment with the highest return.

3) Shares 
The riskiest of all investment listed here apart from Item 5 if you consider that as a form of investment. Trading of shares are done over the Kuala Lumpur Stock Exchange. Each unit of shares signifies a small percentage of a company. By investing into shares of a particular company, you are then called a shareholder of that company. A profitable company would be reflected via increase in the share price of that company.

Investors make their profits from selling the shares they own to another who is interested in purchasing them at an agreed price. The entire buy-sell are done over various avenues from the old schooled phone call to the remisier or the latest personal online share trading platform.

The objective of share investment are normally to make a profit from the difference between the purchasing price and the selling price (Selling price > Purchasing price =  Profit). On the other hand, some investors purchase shares to enjoy the dividend given out by the company. Do take note that investing in shares are categorized as high risk due to its volatility. Factors such as Global Economic meltdown, Recessions, Elections, Terrorist attack, general shareholder sentiments, stock manipulation,  and many more factors could lead to a either a quick rise or a sharp drop in share prices.

4) REITS
The concept of REITS is almost similar to Unit Trust. REITS are actually shares which we can purchase over KLSE. Each shares denominates a small part of a property depending on what kind of REITS you purchase. If you purchase Pavillion REITS, that means you are have become owner of Pavillion, albeit a small small part of Pavillion. All profits obtained from Pavillion such as rental or rental increase is then distributed back to you depending on the number of Pavillion shares you own.

In short, purchasing in REITS is similar to investing in properties. We do not own the property directly, but we become a share holder of that property. Many investors are looking at REITS as it promises regular high returns on dividens. Furthermore investing in property is one of the preferred option of investment especially during slow/bad economy periods.

4) Gold & Silver
Another alternative investment that is available for investors is Gold & Silver. Categorized as precious metals, investors are purchasing and selling these commodities in order to make profit from the difference in price between purchase and sales. For example, the price for of Gold has appreciated a whopping 101.53% if you've purchased gold five years ago. That's an average of +20% return annually over the money you've invested.

There a many ways of purchasing these precious metal from buying the actual physical metal to trading paper gold/silver. Paper gold/silver is the latest trend among investors as you can purchase gold/silver from banks such as Maybank, CIMB and Public Bank without the hassle of actually having the actual gold in hand. By investing in paper gold/silver, there's no worry about losing your physical gold/silver due to theft/natural disaster/robbery/misplace as everything is recorded and tracked via a simple passbook.

5) 4D, Toto, Da Ma Cai, Lottery Tickets
I'm not advocating that you should invest your money into this. Its certainly not an investment option but do not be surprised to hear that many Malaysians consider this as an investment. Millions are spent by Malaysian into gambling with actual winners making up a very very very small percentage. Yet, in a game of chance, many Malaysians especially Chinese loves to make an occasional punt or two, hoping that luck might shine upon them.

Regardless of the many forms of investment, the decision to invest depends on the risk appetite of the investor. If you're not the risk taker type, FD would be the best option for you. For younger investors with higher risk threshold, many investment options are available for your picking. The above are just a general overview of the available options in Malaysia. Personally, I have investments in the first four  options with the bulk of my investment placed into the FD for security. Stability is currently my primary concern as there is bound to be instability due to the coming election and the uncertainty of the Global Economy.

In addition, I do intend to allocate additional funds into purchasing paper gold and paper silver as these are limited precious metals. Prices are bound to rise for gold and paper of the long run.

Heading into 2013, there's more challenges ahead and for the wise investors, the key point is to be cautious and prudent in investing your hard earned money.

Happy 2013 to all readers and Happy Investing

Cheers

MY Investor

Tuesday, 25 December 2012

FAQ on Private Retirement Scheme (PRS)


FREQUENTLY ASKED QUESTIONS ON PRIVATE RETIREMENT SCHEME (PRS)
1.
What is a private retirement scheme?

  • A private retirement scheme (PRS) is a voluntary long-term investment scheme designed to help individuals accumulate savings for retirement. It complements the mandatory contributions made to EPF.
  • Each PRS will include a range of retirement funds that individuals may choose to invest in based on their own retirement needs, goals and risk appetite. The fund options under a PRS must be consistent with the objective of building savings for retirement and ensure that there is a prudent spread of risk.
2.
What is the scope of private pension reforms undertaken by the Securities Commission Malaysia?

  • The introduction of the private retirement scheme framework resulted from recommendations made by the Securities Commission Malaysia (SC) to the Government to accelerate development of the private pension industry in Malaysia.
  • Private retirement schemes form an integral feature of the private pension industry with the objective of improving living standards for Malaysians at retirement through additional savings of funds.
  • The PRS industry forms the third pillar in a multi-pillar pension framework and will complement Malaysia's mandatory retirement savings schemes.
3.
What is the regulatory framework governing PRS?

  • The Capital Markets and Services Act 2007 (CMSA), the Capital Markets and Services (Private Retirement Scheme Industry) Regulations 2012 (the PRS Regulations) and the Guidelines on Private Retirement Schemes (PRS Guidelines) form the regulatory framework for the PRS industry in Malaysia.
  • The 2011 amendments to the CMSA setting out the regulatory and supervisory framework for the private retirement scheme (PRS) industry came into force on 3 October 2011. Under the new Part IIIA of the CMSA, the SC regulates the following key participants in the PRS industry:
    (a)
    Private Retirement Scheme Administrator;
    (b)
    Private Retirement Scheme Providers (PRS Provider);
    (c)
    Private Retirement Schemes (PRS Scheme);
    (d)
    Trustee to Private Retirement Schemes (Scheme Trustee); and
    (e)
    Trustee to Employer-Sponsored Retirement Schemes (Employer Trustee).
  • The PRS Regulations establish the duties and responsibilities of a PRS Provider and Scheme Trustee, as well as requirements on approval of the PRS Scheme, the registration and lodgement of the trust deed and the disclosure document as well as other provisions on the register of members and meeting of members.
  • The PRS Guidelines are aimed at providing a regulatory environment that would safeguard the interests of contributors to PRS.
4.
What are the key components of the PRS framework?

  • The PRS framework comprises approved PRS Providers, each offering a range of fund options under a PRS, where the assets are segregated and held by independent Scheme Trustees under a trust.
  • The law also caters for the establishment of a Private Pension Administrator which would be responsible for the operationalisation of an efficient administrative system for the PRS industry.
  • Underpinning the framework is a strong regulatory and supervisory structure based on the SC's regulatory objectives of ensuring robust regulation and supervision of the PRS industry, promoting trust and confidence in the PRS Schemes and protecting interest of members.
5.
What are the features of the framework to ensure a strong regulatory and supervisory structure?

  • All relevant intermediaries in the PRS industry, namely the PRS Provider, Private Pension Administrator, Scheme Trustee and PRS distributors require approval of the SC to operate and will be subject to on-going regulatory requirements and supervision.
  • The PRS will operate as a trust structure with the Scheme Trustee ensuring the assets of the funds are segregated from the PRS Provider. The funds under the PRS will be professionally managed by the PRS Providers with the purpose of meeting the retirement objective of members. Further, provisions on vesting of contributions and rights to accrued benefits set out in the CMSA will ensure that accrued benefits will be delivered to members to meet retirement needs. (Accrued benefits in the CMSA mean the amount of a member's beneficial interest in a private retirement scheme).
  • A strong regulatory and supervisory framework will ensure that interests of members are safeguarded and protected, integrity of the PRS industry is upheld, risks are appropriately monitored and stability of the system is maintained.
  • In addition to the SC's supervision, investigation and enforcement powers, the SC also has the power to issue directions over the intermediaries in the PRS industry. The SC's powers to issue directions include the ability to direct the intermediary to comply with the law, guidelines, conditions or restrictions, or take remedial action.
6.
What is the role of the Private Pension Administrator (PPA)?

  • The PPA refers to a private retirement scheme administrator as defined under section 139A of the CMSA. The duties and responsibilities of the PPA under the law (Section 139H of CMSA) include taking into account public interest considerations in acting in the best interests of members and having regard to the need to protect members.
  • The PPA would promote efficiency and convenience to members through:
    - Facilitating and maintaining all PRS-related transactions made by members;
    - Facilitating portability between PRS providers; and
    - Undertaking promotion and general education/awareness on PRS.
7.
What are the tax incentives for contributions to PRS?

As announced in Budget 2012:
  • Tax relief up to RM3,000 per annum will be given for an individual's contribution to the PRS; and
  • Employers will also be given tax deduction on contributions to PRS made on behalf of their employees of up to 19% of the employees' remuneration.
FAQ taken from Securities Commission Malaysia

Monday, 24 December 2012

Amanah Saham Nasional Berhad - Part 3 (Amanah Saham Nasional 3 Imbang Fund)

The Amanah Saham Nasional 3 Imbang (ASN3) Fund was launched on the 16th of October 2001. The fund is categorized as Balanced Fund, investing into equity and other capital market instruments.

This fund is available for both Bumiputera and Non-Bumiputera Malaysian depending on the availability of units of the Fund.

Now, let's take a look at some important information of ASN3 abstracted from the Annual Financial Report as of 31 Nov 2011*

(As of posting date, the ASN3's Annual Financial Report for 31 Nov 2012 has yet to be released) 

Asset Allocation as of 31 Nov 2011
Equity Market - 55.51%
Fixed Income Security - 6.85%
Other Instrument Market Models and Assets - 37.64%

Average Annual Returns as of 31 Nov 2011
The average annual returns for the ASN3 over a period of 1, 3 and 5 years are shown in the table below:




For Malaysians who do not understand Bahasa Melayu, the translation as follows:

"Jumlah Purata Pulangan (%)" is defined as "Total Average Returns". 
"Penanda Aras (%)" is defined as "Benchmark Value"

Fund Annual Performance On Year to Year Basis
The fund's actual performance on a year to year basis from 2007 - 2011 are shown in the table below:

"Jumlah Pulangan (%)" is defined as "Total Returns"
"Penanda Aras (%)" is defined as "Benchmark Value"

Top 3 Kuala Lumpur Stock Exchange (KLSE) Indices Invested by ASN3 as of 30th Nov 2012

Top 3 KLSE Indices Invested by ASN3
1. Services Indice (21.20% of NAV - RM 26,254,762)
2. Financial Indice (15.84% of NAV - RM 18,651,755)
3. Plantation Indice (1.73% of NAV - RM 4,868,496)

From the top 3 indices invested by ASN3, we have listed out the top three Equities for each of the indice as shown below:

Top 3 Equities Invested in Services Indice:
1. Axiata Group Berhad
2. Sime Darby Berhad
3. Tenaga Nasional Berhad

Top 3 Equities Invested in Financial Indice:
1. Malayan Banking Berhad
2. CIMB Group Holdings Berhad
3. Public Bank Berhad

Top 3 Equities Invested in Plantation Indice:
1. IOI Corporation Berhad
2. Kuala Lumpur Kepong Berhad
3. Kulim (M) Berhad

Annual Expense Ratio for ASN3 as of 30 Nov 2011
Management Fee : 1% Per Year Over NAV
Trustee Fee : 0.08% Per Year Over NAV

Transaction Information
Summary
Returns of 3.17% for this Fund for  Financial Year 2011 has certainly discourage me from buying this fund. Although it has outperformed the benchmark of 2.00%, the 3.17% return is almost similar to the placing your money in a Fixed Deposit Account. Considering the fact that the fund has more then 50% of its NAV invested into KLSE, I would have expect the returns to be much higher then 3.17%. 

There's much to be questioned on the ability of the fund managers incharge of ASN3 fund if you compare year 2011 returns from ASN3 (3.17%) with the Amanah Saham Gemilang's fund returns of 15.04% (ASG-Pendidikan), 16.33% (ASG-Kesihatan) and 14.44% (ASG-Persaraan).

I'm looking forward for the Annual Financial Report for ASN3 for Financial Year End 30th Nov 2012. From that report, I believe I can make further judgement on the performance of this fund. 

With that I end my 3-part ASNB fund introduction and review. It is my great hope that you find the reviews beneficial and helpful towards deciding the best fund to invest in.

Cheers and Happy Investing

MY Investor

Related Articles / Post:

Saturday, 22 December 2012

Amanah Saham Nasional Berhad - Part 2 (Amanah Saham Gemilang Fund)


The Amanah Saham Gemilang (ASG) Fund acts as an umbrella fund for 3 funds which consist of:

1. ASG - Pendidikan (Education)
2. ASG - Kesihatan (Health)
3. ASG - Persaraan (Retirement)

Although the three funds are given different names, the objectives of these funds, like any other mutual funds are the same, which is to generate long term growth and returns.

We next look at the important information for each of the funds.

Asset Allocation: 

ASG - Pendidikan (Education)
51.59% of this fund is allocated into equity
48.41% is invested into investment instruments and asset

ASG - Kesihatan (Health)
59.44% of this fund is allocated into equity
40.56% is invested into investment instruments and asset

ASG - Persaraan (Retirement)
62.79% of this fund is allocated into equity
37.21% is invested into investment instruments and asset

Albeit the fact that ASG - Persaraan is meant for retirement, this fund allocates the highest percentage of their assets into the equity market. Perhaps this could just be a strategy of the fund manager to ride on the current equity market which is performing above expectations. 

Average Annual Returns:

The average annual returns for the 3 funds over a period of 1, 3 and 5 years are shown in the table below. This statistics are obtained from the Annual Report but one thing I am still unsure off is whether the figures are after the deduction of the Annual Management Fees or not?? Most mutual funds annual report display figures of average annual returns after deduction of the Management Fees. I believe the same applies for ASG as well.

 





For Malaysians who do not understand Bahasa Melayu, the translation as follows:

"Jumlah Purata Pulangan (%)" is defined as "Total Average Returns". 

"Penanda Aras (%)" is "Benchmark Value"

From the table, ASG-Persaraan is the best performing fund amongst the three for period of 1, 3 and 5 Years. Long term investor who target a five year investment should be satisfied with ASG-Persaraan's annual average return of 9.42%.
*Note : Fixed Deposit Rate is currently at 3 ~ 3.5%, Inflation Rate is about 4 ~ 5 %.

Top 3 Kuala Lumpur Stock Exchange (KLSE) Indices Invested by ASG as of 30th Sept 2012

ASG - Pendidikan (Education)
1. Services - (RM 11,211,115)
2. Finance - (RM 7,385,559)
3. Agriculture - (RM 2,105,196)

ASG - Kesihatan (Health)
1. Services - (RM 16,618,705)
2. Finance - (RM 13,824,473)
3. Agriculture - (RM 2,767,592)

ASG - Persaraan (Retirement)
1. Services - (RM 4,473,923)
2. Finance - (RM 2,775,323)
3. REITS - (RM 1,689,641)

With services indice taking up the largest chuck of the investment, Sime Darby and Bumi Armada are the two dominant equity purchased by all three funds. For the Finance indice, we see Maybank and Public Bank shares taking up the majority of the fund invested.

Charges for Purchasing This Fund as of 30 Sept 2012

Management Fee : 1% Per Year Over NAV
Trustee Fee : 0.07% Per Year Over NAV

Transaction Information

Sunday, 16 December 2012

Amanah Saham Nasional Berhad - Part 1 (Introduction)

As of posting, I have yet to invest into any of the funds from Amanah Saham Nasional Berhad. Never the less, I would be treating every post of the ASNB series as a learning stage for myself and for interested readers wanting to know more about ASNB.



Introduction of ASNB

List of Funds
There are in total 9 funds offered by ASNB which consist of :

1. Sekim Amanah Saham Nasional
2. Amanah Saham Nasional 2
3. Amanah Saham Nasional 3 Imbang
4. Amanah Saham Gemilang
5. Skim Amanah Saham Bumiputera
6. Amanah Saham Wawasan 2020
7. Amanah Saham Malaysia 
8. Amanah Saham Didik
9. Amanah Saham 1Malaysia (Latest)

Fund Availability
A check on Maybank2u.come indicate the availability of the funds as shown below:


Among the 9 funds, 3 are fully subscribed and the latest AS 1M quota for Non-Bumi has been fully subscribed. That leaves us with only ASN, ASB, ASN2, ASN3 and ASG to choose from.

Eligibility To Invest (Malaysian Bumiputera and/or Non-Bumiputera)

Fund
Bumiputera
Non Bumiputera
Amanah Saham Nasional (ASN)
Eligible
Not - eligible
Amanah Saham Bumiputera (ASB)
Eligible
Not - eligible
Amanah Saham Nasional 2 (ASN2)
Eligible
Not - eligible
Amanah Saham Nasional 3 Imbang (ASN3)
Eligible
Eligible
Amanah Saham Gemilang (Amanah Saham Pendidikan, Amanah Saham Kesihatan, Amanah Saham Persaraan) (ASG)
Eligible
Eligible

Summary
For Part 2, I would be looking at the background of each of the funds (the one's which are available) as well as well as the performance of the funds.

Till then, happy investing!

Cheers

Wednesday, 5 December 2012

Charges For Purchasing Unit Trust / Mutual Funds

One of the key decision to make before investing your money in Unit Trust / Mutual Funds is the  charges that comes with it.

Charges for investing into Unit Trust / Mutual Funds are normally in the form of percentage (%) and consist of two types:

1. Initial Sales Charge - once for every time you invest an amount into Unit Trust
2. Annual Expense ratio - incurred annually by deducting certain % of the Net Asset Value of the fund. Deduction is calculated on a pro-rated daily basis and will be deducted from the NAV of the fund at the end of each day before the price of the fund is published. In other words, the Annual Expense ratio is considered already embedded into the pricing of the unit trust fund. For further clarification, I recommend that you read this post on 4 Myths about Unit Trust Investing.

In order to make this post easier to understand, lets make a case comparison of incurred charges between Unit Trust / Mutual Funds and the typical Fixed Deposit offered by the bank.

Type of Charges
Fixed Deposit
Unit Trust / Mutual Fund
Initial Sales Charge
None
0% - 7% (once for every invested amount depending on type of fund)

Annual Management Fee
None
1% - 1.5% annually (depending on type of fund)
Trustee Fee
None
0.06% - 0.08% of NAV (subject to a minimum of RM18,000 per annum)

Annual Expense ratio*
None
1.5% - 2.5% annually


*Annual Expense ratio is the various expenses that a unit trust incurs to keep it running, expressed as a percentage of the unit trust’s net asset value (NAV) per annum and is deducted from a unit trust’s asset on a daily basis before the price of the fund is published. Expense ratio includes annual management fee, trustee fee, administration fee, accounting and valuation fee, audit fee, custodian fee, legal fee, registrar fee, printing and distribution costs and other expenses. Expense ratios for equity funds typically range from 1.5% to 2.5%, and for fixed income funds, the expense ratios typically range from 1% to 1.5%.

From the table above, we can summarized that on the average we are charged with the following:

1. One time "Initial Sales Charge" for each investment made : ranging from 0% - 7%
2. Annual Expense ratio : ranging from 1.5% - 2.5%

While we need not know about the details of the charges, it is important that you make a comparison of charges among funds of the same investment nature. Here's a sample comparison of a few funds of the same investment nature:


Fund Name 
Initial Sales
Charge
Annual Management Charge
Trustee Fee
Annual Expense Ratio
Eastspring Invesment Asia Pacific Equity My Fund
5%
1.5%
0.07%

1.89%
Hwang Asia Pacific (ex Japan) Infrastructure Fund
5%
1.8%
0.08%

2.26%

Pheim Asia Ex -Japan
5%
1.5%
0.07%

1.68%

The obvious option is to select Pheim Asia Ex-Japan fund as your fund of choice. However, do note that selecting a fund based on the charges is just one of the many criteria of selecting a fund. There are also other considerations such as:

1. Fund historical performance
2. Fund area of investment
3. Fund risk rating

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Cheers and happy investing

MY Investor