Seminar : Share Investment - Is the 10% Return Sustainable?

Good news for fellow investors! 

A not to be missed investment seminar organized by Phillip Capital Sdn Bhd is set to be held on the 9th of November 2013 at Johor Bahru!

- What this Seminar has got to offer? -

- Speakers -

- Time and Location - 

- Ticket Price -

RM50.00

For Invest Made Easy readers, you can purchase tickets at a SPECIAL OFFER PRICE of RM30.00 per ticket if you mention:

"Invest Made Easy" 

when purchasing your tickets!

- Where To Get Your Tickets? -

Visit Phillip Capital Branches to get your tickets!

Phillip Capital, Taman Molek

No 15, 15-01 & 15-02, Jalan Molek 1/29, 

Taman Molek, 81100 Johor Bahru,

Johor Darul Takzim

Contact No : 07-3525 999

Phillip Capital

No. 9A, Jalan Sutera Tanjung 8/2, 

Taman Sutera Utama, 81300 Skudai Johor

Contact No : 07-5589233

GST Unraveled! Find Out How GST Really Works!

Since Budget 2014 was announced on Friday, There's been a slew of new articles being printed/posted/shared/circulated, explaining how GST works. As a financial planning blog, I too feel the obligation to post an article about GST based on my understanding and research so far.

What is GST?

• Stands for Goods and Service Tax
• Also known as Value Added Tax (VAT) in other countries
• Levied on the supply of goods and services at each stage of the supply chain from the supplier up to the retail stage of the distribution
• Is a broad based consumption tax covering all sectors of the economy i.e all goods and services made in Malaysia including imports.
• Will effectively replace two existing taxes (Sales Tax and Service Tax) by 1st April 2015

How GST replaces Existing Sales Tax?

Definition of Existing Sales Tax

Basically Sales Tax is an indirect tax imposed upon certain imported and locally manufactured goods. It is levied only once (single stage). Simply put goods which are manufactured for local use and goods that are imported for local consumption are subjected to Sales Tax.

Sales Tax Range

Generally, the rate is 10% under Sales Tax (Rates of Tax No.1) Order 2008) except for the following:

• Goods under Schedule 1 Sales Tax (Rates of Tax No.2) Order 2008 – subject to rate of 5%
• Goods under Schedule 2 Sales Tax (Rates of Tax No.2) Order 2008 – subject to rate of 20%
• Goods under Schedule 3 (Sales Tax (Rates of Tax No.2) Order 2008 – specific rate applicable

Sample Illustration on How Existing Sales Tax apply

Supply Chain with existing Sales Tax

E.g : By buying an imported Coach handbag you are already paying Sales Tax except that it does not appear on your receipt. The cost of the Sales Tax is already embedded into the selling price of the handbag.

E.g. 2 : By purchasing a locally made BATA sports shoe, you are already indirectly subjected to Sales Tax which have been embedded into the selling price of the shoe.

In other words, as Consumers, we do not really feel the effects of existing Sales Tax as we have been paying the embedded sales tax all along.

How GST replaces Sales Tax?

Remember the previous illustration for existing Sales Tax? You can see that a one time Sales Tax (10%) was levied at the Manufacturer's Level only.

When GST comes in, this is how the system would look like:

Supply Chain with GST

Notice the existence of a "Claim Back GST" box for each level of except for Consumer? This is a give and take system whereby each level of the supply chain (except the Consumer) has a so called "Input Tax" and "Output Tax".

****************

Sample Calculation of GST's Input Tax and Output Tax:

Wholesaler is taking a locally manufacturer product by the name of Brand A from the Manufacturer and the cost of manufacturing Product A is RM50.00

The Manufacturer has to pay the Government 6% GST for Brand A : 

6% x RM50.00 = RM3.00

Wholesaler then sells Brand A to Retailer at a price of RM80.00. 

For the Wholesaler, the RM3.00 worth of GST paid by the Manufacturer is called Input Tax. The Output Tax for the Wholesaler is calculated as:

6% x RM80.00 = RM4.80

Amount of GST payable by the Wholesaler would be:

= Output Tax - Input Tax

= RM4.80 - RM3.00

= RM1.80

*In the event that the Input Tax is Higher then the Output Tax, the Wholesaler can claim the difference back from the Government. 

***************

To further illustrate the entire Input and Output Tax for GST, see table below:

Click to Enlarge

Will we be paying MORE when GST replaces Sales Tax?

I believe this is the question that has been on everyone's mind even before GST was officially announced. In order to determined whether we are paying more or paying less, let's make some sample calculation.

Key assumptions for the calculation

1. We assume that the profit margin for each level of the supply chain remains the same. This is only logical considering that manufacturers, wholesalers and retailers would want their profit margin to remain the same.

2. We assume that manufacturers, wholesalers and retailers would take into account the input and output tax before selling the items to the next in line. If the manufacturers, wholesalers and retailers do not take into account of the input tax for their calculation of total sales price, the price of goods when they reach the consumer stage would be very much higher!

Calculated Table of Comparison between Sales Tax and GST:

Level of Supply	Sales Price (Service Tax - 10%)	Sales Price (GST - 6%)	Remarks
Manufacturer	Sales Price = RM100.00 Service Tax (10%) = RM10.00 Total Sales Price = RM110.00	Sales Price = RM100.00 GST  (6%) = RM6.00 Total Sales Price = RM106.00	Profit Margin for both scenarios at RM100.00
Wholesaler	Sales Price = RM130.00 No Service Tax Total Sales Price = RM130.00	Sales Price = RM125.00 GST  (6%) = RM7.50 Deduct Input Tax = (RM6.00) Total Sales Price = RM126.50	Profit Margin for both scenarios at RM19.00
Retailer	Sales Price = RM153.5 No Service Tax Total Sales Price = RM153.50	Sales Price = RM150.00 GST  (6%) = RM9.00 Deduct Input Tax = (RM7.50) Total Sales Price = RM151.50	Profit Margin for both scenarios at RM23.50
Consumer	Sales Price = RM153.5 No Service Tax Need to Pay = RM153.50	Sales Price = RM151.50 GST (6%) = RM9.09 Need to Pay = RM160.59

Based on the calculation above, the introduction of GST will likely lead to a rise in prices of goods.  Consumers would definitely have to PAY MORE if the calculations I made are accurate. However, since the calculations are made based on my own understanding of how GST is calculated, I would like to subject this for further debate if you feel that I am wrong.

How GST replaces Existing Service Tax?

Now that we have Sales Tax out of the way, we proceed next to explain how GST will replace Service Tax.

Definition of Existing Service Tax

Service Tax in Malaysia is a form of indirect tax imposed on specified services called “taxable services”. Service tax cannot be levied on any service which is not included in the list of taxable service.

A service tax applies to certain prescribed goods and services in Malaysia including foods, drinks and tobacco. The tax also applies to professional and consultancy services provided by the professional firms or persons such as accountants, lawyers, engineers, architect, insurance companies, etc.

Generally, the imposition of service tax is subject to a specific threshold based on an annual turnover ranging from RM150,000 to RM3,000,000.

How Much is existing Service Tax

Service Tax is fixed at 6% all across the board since January 2011. Previously it was 5%.

For example if you dine in a restaurant that has an annual sales turnover of RM3,000,000, the price you pay for your meal would be subjected to Service Tax of 6%. 

Shown below is an example of a receipt with Service Tax:

Click to Enlarge

Some receipts tend to print only the word "GST" which actually stands for "Government Service Tax". Therefore, do not confuse the current "Government Service Tax" (GST) printed on these receipts with the yet to be implement "Goods and Service Tax" (also GST).

You might also notice the term "Service Charge (10%)" appearing on some of your receipts. This Service Charge has got nothing to do with Service Tax or Sales Tax. A Service Charge is similar to a tip. In foreign countries, you decide whether to tip or not as well as the tip amount. In Malaysia, the 10% of the total bill tip is forced upon us by certain restaurants regardless of the quality of service rendered. 

Sample Illustration on How Existing Service Tax apply

How GST replaces Service Tax?

When it comes to replacing service tax, the implementation and calculation is exactly the same as existing Service Tax. Since GST is also at 6%, Consumers would only notice the changes in terms of naming.

The difference that we might notice in the future is the range or so called threshold annual turnover for those required to implement GST. For example the threshold annual turnover of GST might be lowered for restaurants from RM3,000,000 to RM1,000,000. 

If the Government decides to lower the threshold amount and widen the number of businesses and service providers required to implement GST, the cost of GST woud then be passed down to the Consumer, and that's us! Bad news indeed!

Summary

In my honest opinion, implementing Goods and Service Tax (GST) does not favor us as consumers. Looking at the larger picture, some might see GST as good for the economy. To me, the implementation of GST is just going to add on to the cost of living for Malaysians in general. Don't forget we will also be facing price increase once the sugar subsidy removal kicks in next year!

Cheers and Happy Investing!

P.s : Would like to correct me if I have misinterpreted the explanation and calculation for GST? Do leave your comment below.

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You can also contact me at shanesee03@gmail.com to find out how financial planning can help you face inflation.

Budget 2014 : What To Expect Now?

Dressed in a bright orange color baju Melayu, our Prime Minister delivered Budget 2014 with the theme "Strengthening Economic Resilience" at Parliament yesterday (25 Oct 2013). The key points many Malaysian expect from the budget include:

1. When would GST be implemented?
2. What other subsidy cuts to be expected?
3. Implementation of new tax rules which covers property tax gains, income tax and related tax matters.

The gist of Budget 2014 should have appeared in today's papers and I believe most would have read the list by today. For those whom have yet to see the list,  you can read the full list HERE. 

Key benefits of Budget 2014 that directly impact us financially include:

1. Monthly Tax Deduction (MTD) as Final Tax, effective from 2014 assessment year. 

PM : "Currently, tax payers with employment income and subject to monthly tax deduction (MTD) are required to submit tax returns before or on 30 April of each year. The requirement to submit tax returns has confused tax payers from whom MTD has already been made and yet they are still required to submit the tax returns to the Inland Revenue Board."

PM : "To facilitate tax payers with employment income whose MTD have been made, it is proposed that these tax payers are not required to submit tax returns if satisfied their MTD is a final tax. This proposal is effective from year assessment 2014"

2. Chargeable income subject to maximum rate to be increased from exceeding RM100,000 to exceeding RM400,000. *Current maximum tax rate at 26 per cent to be reduced to 24 per cent, 24.5 per cent and 25 per cent. Effective from year 2015 assessment.

3. Individual income tax rates be reduced by 1 to 3 percentage points for all tax payers to increase their disposable income. With this measure, 300,000 persons who currently pay income tax will no longer pay tax. Generally, families with monthly income of RM4,000 will no longer have tax liability. Effective from year 2015 assessment.

Whether GST will be implemented or not? The answer is YES and the details as listed below:

1. Sales tax and service tax be abolished. These two taxes will be replaced by a single tax known as the Goods and Services Tax (GST).

PM : "Currently, the inflation rate is low at 2%. The Government believes that this is the best time to implement GST as the inflation rate is low and contained."

PM : "With the implementation of GST, the Government will be able to address the weaknesses in the current taxation system. As an example, if we were to buy a carbonated drink in a restaurant today, we would not notice that we are paying double taxes which are sales tax and service tax."

2. The GST rate is fixed at 6% and to be effective from 1 April 2015.

3. GST will not be imposed on basic food items such as rice, sugar, salt, flour, cooking oil, lentils, herbs and spices, salted fish, cencalok, budu and belacan

4. GST will not be imposed on piped water supply, and the first 200 units of electricity per month for domestic consumers;

5. GST will not be imposed on services provided by the Government such as the issuance of passports, licences, health services and school education;

6. Transportation services such as bus, train, LRT, taxi, ferry, boat, highway toll as well as education and health services are exempted from GST; and

7. Sale, purchase and rental of residential properties as well as selected financial services are exempted from GST.

What about Subsidy Cut?

In his speech, the Prime Minister mentioned that now is the best time for GST to be implemented as the inflation rate is low and contained. However, his statement contradicts the common fact that reducing subsidy will definitely cause to rise. 

After experiencing an overall price increase in consumer goods and services when the petrol subsidy was reduced by RM0.20/litre, we now faced with the prospect of further rise in prices when Sugar Subsidy is removed in 2014 (as announced by the Prime Minister). 

The current sugar subsidy enjoyed by Malaysian is RM0.34/kg. Once this subsidy is removed, the new price of sugar will be RM2.84/kg as compared to RM2.50/kg previously as shown in the red box below:

Considering that sugar is a must have ingredient in restaurants and food courts, many middle income families with both husband and wife working will have to face the prospect of spending more on food. 

The scenario that many Malaysian will faced when eating in a restaurant:

 = GST of 6% + indirect price increase caused by sugar subsidy removal

On a positive note, the removal of sugar subsidy might encourage Malaysian to

1. Reduce eating outside.

2. Cook their own meals at home, thereby reducing expenditure and saving up more.

3. Stop drinking sugary drinks.

The sugar subsidy removal is indeed a wise choice by the Government considering that other subsidized items listed in the previous table are extremely vital that Malaysian cannot do without. 

How much is the Government saving from removing sugar subsidy? 

Based on the table below, for 2013, our Government is subsidizing approximately RM350.2 million for sugar. 

In all honesty, savings of RM350.2 million through the removal of sugar subsidy has minimal impact in terms of reducing our country's deficit that has already exceeded RM500+ billion. On the other hand, the "rakyat" would be bearing the brunt of this move for surely the cost of eating out and purchasing goods that have sugar contents will increase exponentially.

Conclusion

All in all, the Budget 2014 has a mixture of good and "not" so good initiatives. While we welcome  the move to increase the maximum tax range from RM100,000 to RM400,000, we are also faced with the prospect of higher inflation. Sigh..this budget reminds me very much of this proverb "Never look a gift horse in the mouth."

Cheers and Happy Eating At Home!

Read more about inflation:

1. Part 1 : Do You Really Know What Inflation Is???
2. Discovering Malaysia's Actual Inflation Rate!
3. Indonesia's Inflation Crisis...Malaysians should learn from it!

4. The Impact of Standards & Poor and Fitch Rating towards Malaysia

If you like reading this post, it would do me a great favor by:
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You can also contact me at shanesee03@gmail.com to find out how financial planning can help you face inflation.

Is Insurance Saving Plan Really Worth Investing In?

I've received quite a number of queries from friends whom already or intend to invest in an insurance saving plan as part of their investment diversification. Under most cases, my explanation to them were rather general without real figures to backup the point that it "might not" be a good option to diversify via an insurance saving plan especially if you are looking for higher returns.

In this article, I would like to illustrate the actual returns of an insurance saving plan and provide the pros and cons of investing in one.

Background

Most insurance savings plan requires an potential investor to do the following:

1. Contribute an annual premium/contribution/savings over a certain period of time. (Normally 10 years).

2. During the period of contribution, you are also protected normally for "Death & TPD". Some insurance companies do throw in additional coverage to make a plan more attractive. 

3. Once you've completed paying 10 years worth of contribution you then enjoy the following benefits for the next 10, 15 or 20 years depending on the plan you choose. The benefits that one can enjoy are:

4. Obviously there's also insurance coverage during this period of the plan until it reaches maturity.

5. Once the plan reaches maturity, you will receive a lump sum cash payment including additional bonuses (determined by the insurance company)

However, I will to not further discuss the details of the insurance coverage provided by the saving plan as I believe most investors go for the insurance savings plan mainly for the cash payout and the lump sum cash returned upon maturity.

Case study of a sample insurance plan

For the purpose of case study, shown below is a snapshot of an actual insurance plan:

As describe above, the client is a non-smoking male, aged 35. He has chosen a 30 years insurance saving plan that also provides insurance coverage for Death and TPD worth RM100,000. 

Policy Period (first 10 years)

He has to contribute RM17,737 per annum for the next 10 years.  

Next 20 years upon completion of policy payment

He will enjoy the following for the next 20 years:

1. Guaranteed cash payout of RM4,000 per annum

2. Non-guaranteed Simple Reversionary Bonus of RM3,000 per annum

When plan matures on the 30th year

He will receive a lump sum projected value of RM380,325.

The diagram below further illustrates how the insurance saving plan works:

How much does the client stand to gain over the entire plan?

In the above snapshot (refer to the blue box), this client can "potentially" gain RM520,325. The value of RM520,325 is derived by summing up the following:

a) Guaranteed RM4,000 per annum x 20 years = RM80,000

b) Non-guaranteed annual bonus of RM3,000 x 20 years = RM60,000

c) Projected maturity value = RM380,325

Total : RM80,000 + RM60,000 + RM380,325 = RM520,325

Does that sound like a great passive investment option especially if you are only paying a total of RM177,370 in total for the first 10 years in return for RM520,325 plus insurance coverage?

Before you go about deciding to take up this insurance saving plan, let's take a deeper look into the plan and see what we can find out!

What's Guaranteed and What's Not?

In this plan, there are certain figures which are guaranteed and some figures which are only projected values. 

Guaranteed annual cash payment over next 20 years:

Guaranteed RM4,000 per annum x 20 years = RM80,000

Guaranteed amount upon maturity:

Firstly, the projected maturity value of RM380,325 consist of the following components:

a) Sum assured = RM100,000 (guaranteed)

b) Terminal bonus = RM195,508 (guaranteed)

c) Simple Revisionary bonus = RM84,817 (non-guaranteed)

Guaranteed amount upon maturity : RM100,000 + RM195,508 = RM295,508

Total guaranteed value:

Consist of the sum of annual cash payment and guaranteed maturity amount:

= RM 80,000 + RM 295,508

= RM 375,508

Total non-guaranteed value:

= RM 520,325 - RM375,508

= RM 144,817

Despite knowing the guaranteed amount and the projected amount, we are still unclear if investing in this insurance saving plan is worthwhile or not? An investment worthiness is normally determined through its annul returns in %. Knowing the actual annual returns of an investment is vital especially if you are deciding if the investment returns ensuring that your money is growing faster then the depreciation rate (in other words, inflation).

What is the Actual Annual Returns (%) for this Insurance Saving Plan?

Considering that this saving plan is not a straightforward investment that require you to invest a large amount at one go and then enjoy fixed % return yearly over the next 30 years, we will need to calculate the annual returns using what we call an Internal Rate of Return (IRR) calculation.

IRR Calculation (Inclusive of Guaranteed and Non Guaranteed Amount)

In order to perform the IRR calculation, I am using an online IRR calculator from vindeep.com

IRR Calculation (Guaranteed Amount Only)

Summary of IRR Calculation

Based on the IRR calculation, if this insurance saving plan is able to generate a projected total return of RM520,325 at the end of 30 years based on your total contribution of RM177,370 for the first 10 years, the annual percentage return is 5.17% per annum

If the IRR calculation is done entirely on the guaranteed value of RM375,508 only, the annual percentage return of this insurance saving plan is a meager 3.44% per annum. 

Summary

Based on the IRR calculation, you can see that the guaranteed value provided by this insurance saving plan is about 3.44% per annum. This figure is slightly higher then the Fixed Deposit rate offered by the bank. 

As for the projected total return of 5.17% per annum, do remember that this is just a projected figure that might or might not be achievable. We can only be assured of the 3.44% returns per annum as guaranteed by this plan. 

Investment returns aside, investing into an insurance saving plan provides you with a form of protection in the event of a Death or TPD. Further more, since there is an element of insurance from subscribing to this plan, you can use it for tax rebate purpose.

Cheers and Happy Investing!

P.s : The calculation of IRR is up for debate. If you feel that I've made a mistake in calculating the IRR or misinterpreted this insurance saving plan, feel free to post a comment here.

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Top 10 Best Performing Unit Trust Funds As of 9th October 2013

If this is your first time reading this review, I would highly recommend that you read "A Guide Towards Understanding Unit Trust Performance Table"before proceeding.

Review

Fund Category : Equity Malaysia
Top 10 Best Performing Fund for Category Equity Malaysia (click Image to Enlarge):

4 Weeks Gain/Loss Ranking Table for Category Equity Malaysia Funds:

`Fund Name	YTD as of 13th Sept 2013	YTD as of 9th Oct 2013	4 Weeks Gain / Loss (%)	4 Weeks Gain/ Loss Rankings	Previous 4 Weeks Gain/Loss Rankings
Phillip Master Equity Growth Fund	24.97	27.64	2.67	1	5
Kenanga Growth Fund	14.88	16.21	1.33	7	4
MAAKL-HDBS Flexi Fund	11.41	13.27	1.86	4	3
CIMB-Principal Equity Fund	14.19	16.25	2.06	2	7
CIMB-Principal Wholesale Equity Fund	14.52	16.05	1.53	5	9
Kenanga Syariah Growth Fund	14.65	15.99	1.34	6	2
Hwang AIIMAN Growth	15.7	17.63	1.93	3	8
CIMB-Principal Equity Fund 2	Newcomer	10.26	N/A	N/A	N/A
AMB Dividend Trust Fund	8.03	9.26	1.23	8	1
MAAKL Regular Savings Fund	Newcomer	8.5	N/A	N/A	N/A
AVERAGE 4 WEEKS GAIN/LOSS (%)			1.74

Top Performing Fund over 4 weeks period: 

Phillip Master Equity Growth Fund (+2.67%)

Worst Performing Fund 4 weeks period:

AMB Dividend Trust Fund (+1.23%)

Newcomers:

CIMB-Principal Equity Fund 2

MAAKL Regular Savings Fund

Performance Comparison with the KLSE Index between 13 Sept 2013 to 9 Oct 2013

KLSE Index (%) Gain/Loss : -0.09%

Average Top 10 Unit Trust Equity (%) Gain.Loss : +1.74% (Out performed the KLSE Index)

Summary

Gains made by the KLSE index during the first 8 days beginning 13th September were wiped out by spillover effects of the Dow Jones as indicated by the two red lines in the picture above. However news of the US Government threatening to shut down caused the Dow Jones to suffer further losses during the first week of October 2013. 

As for the local scene, the impact of the US Government shutdown towards our KLSE index was rather minimal. According to analyst, despite the temporary shutdown, the effects towards the global economy outlook is minimal. Analyst are also confident that a mutual agreement between the US Democrats and Republican to extend the US debt ceiling will be reached in order to avoid a catastrophic collapse of the world largest economy caused by default in government bond interest payment.*

*Read more about the shutdown and default problem HERE 

That aside, a bigger worry for Malaysian equity investors is the impending Budget 2014 set to be announced during the 3rd week of October 2013. With many expecting the budget to have a downside impact on the stock market, most top performing funds in this category have started hoarding cash in anticipation of purchasing stock when the KLSE dips indicated in this post. For general recommendation on how to approach your investment, click HERE.

Review

Fund Category : Asia excluding Japan
Top 10 Best Performing Fund for Category Asia Exc Japan (click Image to Enlarge):

4 Weeks Gain/Loss Ranking Table for Category Asia Excluding Japan Funds:

Fund Name	YTD as of 13th Sept 2013	YTD as of 9th Oct 2013	4 Weeks Gain / Loss (%)	4 Weeks Gain/ Loss Rankings	Previous 4 Weeks Gain/Loss Rankings
Public Islamic Asia Dividend Fund	3.73	3.15	-0.58	3	7
Pheim Asia Ex-Japan Islamic	12.85	13.47	0.62	1	3
Public Asia Ittikal Fund	2.7	1.88	-0.82	5	8
PB Islamic Asia Equity Fund	2.26	1.46	-0.8	4	6
Eastspring Investments Asia Pacific Shariah Equity Fund	0.95	-0.25	-1.2	6	9
Public Regional Sector Fund	16.65	15.26	-1.39	7	2
MAAKL Pacific Fund	4.71	4.21	-0.5	2	5
CIMB Islamic Asia Pacific Equity Fund	5.36	3.15	-2.21	8	1
Pheim Asia Ex-Japan	Newcomer	2.67	N/A	N/A	N/A
Public Far-East Select Fund	Newcomer	9.36	N/A	N/A	N/A
AVERAGE 4 WEEKS GAIN/LOSS (%)			-0.86

Top Performing Fund over 4 weeks period: 

Pheim Asia Ex-Japan Islamic (+0.62%)

Worst Performing Fund over 4 weeks period:

CIMB Islamic Asia Pacific Equity Fund (-2.21%)

Newcomers:

Pheim Asia Ex-Japan

Public Far-East Select Fund

Performance Comparison with the MSCI Asia Excluding Japan Index between 

13 Sept 2013 to 9 Oct 2013

MSCI Asia Exc Japan Index (%) Gain/Loss : +2.40%

Average Top 10 Unit Trust Equity (%) Gain.Loss : -0.86% (Under performed the MSCI Index)

Summary

The Asia Exc Japan Index was also largely impacted by the spillover of Dow Jones decline beginning from 21st September right up till end of September. A quick reversal occurred at the start of October month as investors expect that the impact of the US government shutdown to be minimal towards the global economy. 

The broader concern is for the the US Senate to reach an agreement to further extend the US debt ceiling as stated by below:

In terms of whether to invest into fund of this category, I still stand by my recommendation for investors to consider investing into Asia excluding Japan as part of a diversification option. My opinion of the Asia Pacific market remains the same as my previous review as shown below:

Snippet taken from previous review

Review

Fund Category : Greater China
Top 10 Best Performing Fund for Category Greater China (click Image to Enlarge):

4 Weeks Gain/Loss Ranking Table for Category Greater China Funds:

Fund Name	YTD as of 13th Sept 2013	YTD as of 9th Oct 2013	4 Weeks Gain / Loss (%)	4 Weeks Gain/ Loss Rankings	Previous 4 Weeks Gain/Loss Rankings
CIMB-Principal Greater China Equity Fund	7.98	7.73	-0.25	2	1
CIMB-Principal Greater China Equity Fund	7.98	7.73	-0.25	2	1
PB China Pacific Equity Fund	11	9.3	-1.7	6	2
Public China Ittikal Fund	7.57	6.57	-1	5	7
PB China Titans Fund	6.28	4.53	-1.75	8	4
Public China Select Fund	11.03	10.08	-0.95	4	6
AmIslamic Greater China	-2.16	-2.67	-0.51	3	9
Eastspring Investments Dinasti Equity Fund	7.86	5.69	-2.17	9	5
Hwang China Select Fund	16.87	17.91	1.04	1	8
MAAKL Greater China Fund	4.27	2.54	-1.73	7	3
AVERAGE 4 WEEKS GAIN/LOSS (%)			-0.93

Top Performing Fund over 4 weeks period: 

Hwang China Select Fund (+1.04%)

Worst Performing Fund over 4 weeks period:

Eastspring Investments Dinasti Equity Fund (-2.17%)

Newcomers: None

Performance Comparison with the Shanghai Stock Exchange (SSE) Index between 

13 Sept 2013 to 9 Oct 2013

SSE Index (%) Gain/Loss : -1.09%

Average Top 10 Unit Trust Equity (%) Gain.Loss : -0.93% (Slightly Under performed the SSE Index)

Summary

Poor China export data coupled with news of US Government shutdown caused a dip in the SSE Index starting from 23rd September. However the index rebounded from 26th September onward as many investors felt that the impact of the US Government shutdown was minimal. Further gains were made by the SSE Index after the Mid Autumn Festival break as investors strongly believe that an agreement will be reached to raise the US debt ceiling.

Despite the ups and downs of the SSE Index over the 4 week period of this review, the positive long term prospect for investing into China funds are still good. Efforts by the China government to lay a strong foundation for economic growth is starting to bear fruits.

Fund worth considering if investors would like to diversify their investment into China are Hwang China Select Fund. This fund in particular have outperformed its peers in terms of YTD, gaining 17.91% since 1st January 2013. 

That's all for this month's review!

Cheers and Happy Investing!

P/s : If you like to invest into the best unit trust funds be it Malaysia, Asia Pacific or China, feel free to drop me an email at shanesee03@gmail.com

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