Sunday 1 September 2019

Invest in EPF-Approved Unit Trusts with eUnittrust.com.my

Information taken from eUnittrust:
Invest EPF Approved Unit Trusts via eUnittrust
Great news! With the recent announcement by the Employees Provident Fund (EPF) on 19th August 2019, eligible EPF members can now make informed investment of unit trust funds offered by EPF-approved Fund Management Institutions (FMIs) through the self-service i-Invest online platform within the i-Akaun (Member) portal. 
  • Effective 19th August 2019, EPF has announced that members can invest, switch or redeem their unit trusts through their online transaction portal (i-Invest), within the i-Akaun (member) portal securely and effortlessly. Through i-Invest (i-Akaun), EPF members can also view their unit trust holdings and select which unit trust funds to invest in from the various fund house or funds distributors.
  • To commemorate EPF’s announcement, we at eUnittrust.com.my as one of the distributors on i-Akaun are offering EPF members 0% sales charge for over 100 EPF-Approved unit trust funds when EPF members invest using their i-Akaun during this introductory period. Basically, this means that your excess investible amount in your EPF basic savings account 1 will be fully invested into your preferred EPF-Approved unit trusts of your choice.
  • Gone are the days where EPF members are required to submit physical paper forms, ensuring both their left and right thumbprints are clear on their submitted forms. EPF’s latest initiative has eliminated all the time consuming paperwork submission and time waiting period for approval to ensure Malaysians can invest in a more efficient way.
  • eUnittrust.com.my is the online unit trust distribution platform for Phillip Mutual Berhad where managing your entire range of investment unit trusts portfolio has never been more easy and secure.

Register and Start Now!
*For seamless investment transaction process through i-Akaun, users are encouraged to open an eUnittrust.com.my account.If you are already an existing eUnittrust.com.my then proceed to the next step.

How to Invest Video:

EPF i-Invest FAQs

261 Funds at 0% Sales Charge Promotion by eUnittrust (29 Aug - 30 Sept 2019)


In conjunction with the nation's 62nd Hari Kemerdekaan, eUnittrust is having another 0% Sales Charge Promotion for 261 funds!

0% Sales Charge - 261 Unit Trust Funds!

Participating Fund Houses:
Aberdeen Islamic Asset Management Sdn Bhd
Affin Hwang Asset Management Berhad
AmanahRaya Investment Management Sdn Bhd
AmFunds Management Berhad
Apex Investment Services Berhad
BIMB Investment Management Berhad
Principal Asset Management Berhad (CIMB)
Eastspring Investments Berhad
Franklin Templeton Asset Management Sdn Bhd
Inter-Pacific Asset Management Sdn Bhd
KAF Investment Funds Berhad
Kenanga Investors Berhad
Libra Invest Berhad
Manulife Asset Management Service Berhad
Maybank Asset Management Sdn Bhd
MIDF Amanah Asset Management Berhad
Nikko Asset Management Asia Limited
Opus Asset Management Sdn Bhd
Pacific Mutual Fund Berhad
Pheim Unit Trusts Berhad
Phillip Mutual Berhad
PMB Investment Berhad
RHB Islamic International Asset
RHB Asset Management Sdn Bhd
TA Investment Management BErhad
UOB Asset Management Berhad

Terms and Conditions:


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Why we recommend eUnittrust?
eUnittrust is the only online unit trust platform in Malaysia that is able to 0% sales charge to its members for cash investment. This has always been the unique differentiation factor for eUnittrust as compared to any other platform. 

Other benefits of investing via eUnittrust?
Click HERE

Register a FREE eUnittrust Account now:
Register HERE

Wednesday 21 August 2019

EPF i-Invest Online Platform (FAQ - Buying, Selling and Switching)

How do I invest in approved unit trust funds through the i-Akaun (member)
  • Step 1: Log into your i-Akaun @ www.kwsp.gov.my
  • Step 2: Click on the INVESTMENT tab.
Option 1: You have a particular fund in mind
  • Step 3: Mouse over the TRANSACTIONS tab and click on the BUY tab. This page will also provide details of the Eligible Investment Amount and Available Investment Amount. Ensure that you have an Available Investment Amount of at least RM1,000.
  • Step 4: Select the FMI and FUND NAME to invest and key in the investment amount. (Study the Fund Documents carefully to understand a fund’s risk and return profile. Click on the VIEW FUND INFO tab, then click on the FUND NAME to view the FUND DOCUMENTS.)
  • Step 5: If you desire to invest in multiple unit trust funds, select another FUND NAME under the same FMI. You can only buy funds offered by the same FMI in a single transaction. Separate transactions must be executed if you want to invest in unit trust funds offered by different FMIs.
  • Step 6: For each fund, enter an investment AMOUNT that is above the Minimum Investment Amount (or Minimum Subsequent Investment Amount). The Total Investment Amount for the fund(s) must be at least RM1,000.
  • Step 7: Click on the PROCEED TO CHECKOUT button.
  • Step 8: Click on the BUY button under the FMI or IUTA offering the selected unit trust fund(s).
  • Step 9: After understanding and checking the disclaimer, click on the OK button. You will be redirected to the FMI/IUTA platform to complete the transaction.
Option 2: You want to analyse different funds before investing
  • Step 3: Mouse over the FUND TOOLS tab and click on the FUND SELECTOR tab.
  • Step 4: Filter the unit trust funds according to various criteria provided. Then, click on the GENERATE TABLE button.
  • Step 5: Analyse the unit trust funds under different tabs. (Study the Fund Documents carefully under the FUND INFO TABLE tab to understand a fund’s risk and return profile.)
  • Step 6: Select desired unit trust funds. You can only select funds offered by the same FMI in a single transaction.
  • Step 7: Click on the BUY button at the bottom of the page.
  • Step 8: For each fund, enter an investment AMOUNT that is above the Minimum Investment Amount (or Minimum Subsequent Investment Amount). The Total Investment Amount for the fund(s) must be at least RM1,000.
  • Step 9: Click on the PROCEED TO CHECKOUT button.
  • Step 10: Click on the BUY button under the FMI or IUTA offering the selected unit trust fund(s).
  • Step 11: After understanding and checking the disclaimer, click on the OK button. You will be redirected to the FMI/IUTA platform to complete the transaction.

How do I sell or switch approved unit trust funds through i-Akaun (Member)?

  • Step 1: Log into your i-Akaun @ www.kwsp.gov.my
  • Step 2: Click on the INVESTMENT tab.
  • Step 3: Mouse over the TRANSACTIONS tab and click on the REDEEM/SWITCH tab.
  • Step 4: Select the unit trust fund(s) to redeem or switch. Members can only redeem/switch fund(s) offered by the same FMI or IUTA in a single transaction.
  • Step 5: Click on the PROCEED TO REDEEM button or PROCEED TO SWITCH button.
  • Step 6: After understanding and checking the disclaimer, click on the OK button. You will be redirected to the FMI/IUTA platform to complete the transaction.

Can I select multiple approved unit trust funds to buy/sell/switch through i-Akaun (Member) in a single transaction?

Buy: Yes. You can select multiple unit trust funds offered by the same FMI when transacting through the i-Akaun (Member), before being redirected to the FMI/IUTA platform to complete the transaction.

Sell: Yes. You can select multiple unit trust funds offered by the same FMI or IUTA when transacting through the i-Akaun (Member), before being redirected to the FMI/IUTA platform to complete the transaction.

Switch: Yes. You can select multiple unit trust funds offered by the same FMI or IUTA when transacting through the i-Akaun (Member), before being redirected to the FMI/IUTA platform to complete the transaction.

Additional requirements and/or fees/charges may apply when members are completing the transaction on the FMI/IUTA platform.

Can I switch between approved unit trust funds offered by different FMIs?
No. Switching is only allowed between funds offered by the same FMI, subject to a switching fee (if any).

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REGISTER an IUTA account (eUnittrust) now for FREE
How to register an eUnittrust account?

Analysis of newly launched United Global Healthcare Fund by UOB Malaysia

United Global Healthcare Fund
UOB Asset Management (Malaysia) Bhd has recently launched the United Global Healthcare Fund to provide Malaysian investors with opportunities for long-term capital growth through investments in global medical healthcare stocks. 

Fund Focus Area
Based on the Product Highlight Sheet, the fund aims to achieve the following:
United Global Healthcare Fund Investment Strategy

Fund Background
Despite being newly made available in Malaysia, the United Global Healthcare Fund is in fact an fund that was launched in 2000 and managed by UOB Asset Management Limited, Singapore. 

To understand the potential that this fund new fund is able to offer Malaysian investors, let's take a look at the historical performance of the same fund via data from Singapore.

Fund Performance
1) Total Return of Fund since Inception (August 2000)
Initial Investment Amount: RM 10,000.00 
Period of Investment: 19 years
Current Investment Value: RM 68,762.28 (15th August 2019)
Annualized (%) Return: ~10.6% per annum

United Global Healthcare Fund Performance Sg since August 2000
2) Total Return of Fund (10 Yr)
Initial Investment Amount: RM 10,000.00 (21 August 2009)
Period of Investment: 10 years
Current Investment Value: RM 37,842.10 (15 August 2019)
Annualized (%) Return: ~14.2% per annum

United Global Healthcare Fund Sg Performance (10 Years)
3) Total Return of Fund (5 Yr)
Initial Investment Amount: RM 10,000.00 (15 August 2014)
Period of Investment: 5 years
Current Investment Value: RM 18,707.01 (15 August 2019)
Annualized (%) Return: ~13.3% per annum

United Global Healthcare Fund Sg Performance (5 Years)
4) Total Return of Fund (3 Yr)
Initial Investment Amount: RM 10,000.00 (19 August 2016)
Period of Investment: 3 years
Current Investment Value: RM 12,171.77 (15 August 2019)
Annualized (%) Return: ~6.77% per annum

United Global Healthcare Fund Sg Performance (3 Years)

All in all, the double digit Annualized (%) Return for 19 years, 10 years and 5 years for this fund are pretty impressive. Next up is for us to get a holistic comparison in terms of investing into this fund versus investing into our own Malaysia Mid/Small Cap Equity funds.

Fund Comparison 
(United Global Healthcare Fund Sg vs Equity-Malaysia Mid/Small Cap funds)
The reasons Malaysia Equity Mid/Small cap category was chosen for comparison are due to the following:
  • Funds in this category have been the best performing as compared to other categories
  • Funds in this category are popular among Malaysians investors 
1) 10 Year Annualized (%) Return Comparison
Ranked by Annualized Return:
  1. Eastspring Inv Small Cap Fund: 14.22% 
  2. United Global Healthcare Fund (Sg): 14.2% 
  3. Kenanga Growth Fund: 13.90%
  4. Areca EquityTRUST: 13.37%
  5. Manulife Investment Progress: 10.53%
  6. Public Small Cap: 10.05%
  7. Funds ranked 7 and below have only single digit annualized return (Total Funds: 23)
2) 5 Year Annualized (%) Return Comparison
Ranked by Annualized Return:
  1. United Global Healthcare Fund (Sg): 13.3% 
  2. Areca EquityTRUST: 8.87%
  3. Hong Leong Penny Stock: 8.20%
  4. Hong Leong Growth: 5.48%
  5. Funds ranked 4 and below average less than 5% in annualized return (Total Funds: 23)
3) 3 Year Annualized (%) Return Comparison
Ranked by Annualized Return:
  1. Areca EquityTRUST: 14.51%
  2. Hong Leong Penny Stock: 7.97%
  3. Hong Leong Growth: 7.96%
  4. United Global Healthcare Fund (Sg): 6.77% 
  5. Singular Value: 5.93%
  6. Kenanga Malaysian Inc: 5.78%
  7. KAF Tactical Fund: 5.64%
  8. Funds ranked 4 and below average less than 5% in annualized return (Total Funds: 23)
Summary
As shown in the Fund Performance and Fund Comparison section of this post, the United Global Healthcare Fund (Sg) as well as the upcoming Malaysia version  will certainly be a great addition to any portfolio of investors in terms bringing in better than average returns. Exposure into the healthcare sector via this fund also provides a good diversification element to an investor's portfolio.

For further in-depth analysis/discussion of this fund in terms of resiliency towards market crashes, check out our discussion topic at The Guided Investor Forum under UT Funds Discussion Category

Cheers and Happy Investing!

EPF i-Invest Online Platform (FAQ - General)

This FAQ is taken from EPF's i-Invest portal and published as a form of reference for Malaysians who has yet to register an EPF i-Akaun. 

Registered members on the other hand may log-in to their EPF i-Akaun and and access all information at the i-Invest platform via the Investment tab.

What is an EPF i-Akaun?
i-Akaun is an online services portal provided EPF

What is an EPF i-Invest Online Platform?
An online portal that enables eligible members to invest directly in unit trust (UT) funds offered by EPF-approved fund management institutions. The i-Invest platform is accessible via the Investment Tab of an i-Akaun member. Features of this platform are:
  • Information hub: You can access, analyse and compare useful information on Fund Management Institutions (FMIs) and approved unit trust funds, such as cost of investment, historical performance and statutory information.
  • Efficiency: Real-time transactions and shorter end-to-end processes by eliminating the middle men.
  • Flexibility: You can execute unlimited transactions (buy, sell or switch) at anytime from anywhere in the world on any number of approved unit trust funds offered by FMIs. If you are aged 55 and above, you can still utilise the i-Akaun (Member) to invest conveniently with FMIs. However, EPF releases control over such investments, as they are withdrawals from your Akaun 55 and/or Akaun Emas.
  • Cost optimisation: Initial service charge capped at 0.5% through the i-Akaun (Member) versus 3.0% through agents.
  • Functionality: You can view your consolidated Members Investment Scheme (MIS) investment holdings with detailed breakdowns by FMIs/IUTAs, approved unit trust funds and private mandate portfolios.

What is Members Investment Scheme (MIS)?
Members Investment Scheme (MIS) is an initiative by the EPF to provide investment options to members in enhancing their retirement savings. It allows only eligible members to voluntarily transfer a portion of their excess savings from EPF Account 1 to FMIs/IUTAs for eligible investments. The MIS was introduced in November 1996.

Am I eligible to invest through MIS?
You can invest through MIS if:
  • Your EPF Account 1 savings exceed Basic Savings;
  • You are aged below 55*; and
  • You have an investment account with any FMI/IUTA

* If you are aged 55 and above, you can still utilise the i-Akaun (Member) to invest conveniently with FMIs/IUTAs. However, EPF releases control over such investments, as they are withdrawals from your Akaun 55 and/or Akaun Emas.

If you are a non-Malaysian, you are eligible to invest through MIS only if you registered with the EPF before 1 August 1998 or are a permanent resident.

What is Basic Savings?
It is the minimum level of savings you should have in your EPF Account 1. The minimum level increases with your age. If your EPF Account 1 balance is below your Basic Savings, you cannot invest through MIS. Click here for Basic Savings table.

How can I invest through MIS?
You can now invest through MIS using: (a) agents; or (b) the i-Akaun (Member). The Investment tab on the i-Akaun (Member) is an online, self-service function that does not require agents. As such, you may be charged higher fees when investing through agents versus the i-Akaun (Member).
How much can I invest through MIS?
You can invest your entire Available Investment Amount. After clicking on the Investment tab on the i-Akaun (Member), your Available Investment Amount is shown under the BUY tab. For further information:

Members aged below 55: 
  • You can invest all your Available Investment Amount. Available investment amount = Eligible investment amount - Transferred amount.
  • The Eligible Investment Amount is equivalent to 30% of any amount exceeding your Basic Savings. The transferred amount is the amount that has already been invested through MIS. 
  • Furthermore, the minimum MIS investment amount is RM1,000. Therefore, the minimum savings in excess of Basic Savings required is RM3,333.34, such that RM3,333.34 x 30% = RM1,000.
Members aged 55-60: 
  • Your Available Investment Amount is equivalent to almost the entire Akaun 55 balance; however, you must maintain at least RM1,000 in the account.
  • Furthermore, the minimum withdrawal amount for investments with FMIs is RM1,000.
Members aged 60 and above: 
  • Your Available Investment Amount is equivalent to almost the entire combined balances in your Akaun 55 and Akaun Emas; however, you must maintain at least RM1,000 in Akaun Emas.
  • Furthermore, the minimum withdrawal amount for investments with FMIs is RM1,000.
All ages: 
  • The minimum investment amount also depends on the chosen unit trust fund and whether the investment is an initial or subsequent one.
Example 1
If you are 30 years old, the Basic Savings is RM35,000. If your EPF Account 1 savings balance is RM50,000, the Eligible Investment Amount is: (RM50,000 - RM35,000) x 30% = RM4,500. 

If you have already invested RM2,000 through MIS within the current validity period, the Available Investment Amount is RM4,500 - RM2,000 = RM2,500, which is more than the minimum MIS investment amount of RM1,000. 

If the minimum fund investment amount is RM1,200, you must invest at least RM1,200 in the unit trust fund, up to a maximum of RM2,500.

Example 2: 
If you are 30 years old, the Basic Savings is RM35,000. If your EPF Account 1 savings balance is RM37,000, the Eligible Investment Amount is: (RM37,000 - RM35,000) x 30% = RM600. 

You cannot invest through MIS since RM600 is less than the minimum MIS investment amount of RM1,000.

What is the validity period?
After clicking on the Investment tab on the i-Akaun (Member), your validity period is shown under the BUY tab. For further information:

Your eligible and Available Investment Amounts are applicable for 3 months only, beginning from any attempted MIS transactions after the end of the last validity period (if any).

For example, if you attempt a MIS transaction on 4 January 2019, the validity period will be from 4 January 2019 to 3 April 2019. You may make as many transactions as you wish within this validity period, subject to the Available Investment Amount. After 3 April 2019, if you attempt a MIS transaction on 1 May 2019, the updated validity period will be from 1 May 2019 to 31 July 2019.

What is FMI?
A FMI is a fund management institution approved by the EPF to offer eligible investments to EPF members. FMIs are typically unit trust management companies (UTMCs) or asset management companies (AMCs). FMIs are governed by the EPF’s Guidelines on EPF MIS.

What is an IUTA
An IUTA or Institutional UTS Adviser is a corporation registered with FIMM that is authorised to market and distribute various unit trust funds of FMIs. When investing through the i-Akaun (Member), approved unit trust funds of certain FMIs can only be transacted through IUTA platforms (this is because the relevant FMIs do not have their own platforms that are connected to the i-Akaun (Member)).

When does the EPF release control
The EPF releases control over investments through MIS, subject to any other conditions, under the following scenarios:
  1. You have attained the age of 55;
  2. You have passed away and a full withdrawal of your EPF savings is made by your next-of-kin, beneficiaries and/or nominees;
  3. You make a full withdrawal of your EPF savings due to physical or mental incapacitation that prevents employment;
  4. You make a full withdrawal of your EPF savings as a non-Malaysian and are about to leave Malaysia; or
  5. You make a full withdrawal of your EPF savings as a pensionable employee aged below 55 and are still employed with the Government of Malaysia, any State Government or any statutory or local authority.
What happens when EPF releases control
When the EPF releases control, you must deal directly with FMIs in relation to any investments previously made through MIS. If you redeem any investments, the proceeds cannot be deposited back into your EPF account(s), and must be deposited into your personal bank account. Kindly contact the relevant FMI for further clarification.

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REGISTER an IUTA account (eUnittrust) now for FREE
How to register an eUnittrust account?

Sunday 18 August 2019

EPF Approved Unit Trust Funds (Pdf Analysis + Excel Data Pack)

Contains:
  • 7 years of unit trust fund performance data with specific annual return (%) from 2012 to 2018
  • Analysis of fund performance for the following categories (equity-conventional funds, equity-islamic funds, mixed assets-conventional funds, mixed assets-islamic funds, bond funds and money market funds)
  • 7 years back simulation of all investment into EPF approved unit trust funds versus EPF benchmark return in order to show which unit trust fund managed to outperform EPF return.
  • Data Pack in excel format containing each individual fund data are provided for you to further analyze and back test any investment scenario.
  • Compare your existing EPF invested Unit Trust fund against competing Unit Trust funds from other providers.

BUY NOW 

BUY the analysis and data pack:
https://shanesee03.wixsite.com/theguidedinvestor/online-store/EPF-Approved-Unit-Trust-Fund-Data-Pack-p146943645

 
Screenshots of the analysis and data pack:
Data Pack Excel File (sample)

Analysis of Data by Category (Sample 1)

Analysis of Data by Category (Sample 2)

Saturday 17 August 2019

EPF Investment Portfolio vs Unit Trust Portfolio, which one is better? (Part 3)

Background
Despite a difficult year in 2018, EPF still manage to generate a respectable dividend return of 6.15% for Conventional Savings and 5.90% for Syariah Savings. When majority of stocks and unit trust funds were red with losses in 2018, our every reliant pension fund manage to churn a single digit positive return for all of us

So what is the secret sauce of consistent return by EPF? 

EPF uses a long term investment strategy called Strategic Asset Allocation (SAA). SAA is an strategy that divides the investment portfolios of EPF into different assets classes to minimise risks, such as equities, fixed income, alternatives and cash
Apart from SAA which is use as a long term investment strategy, EPF also deploys two other strategies to manage medium and short term investment. The medium term strategy is called tactical asset allocation (TAA) and while the short term strategy is called dynamic asset allocation (DAA).

EPF's SAA strategy for 2017-2019, calls for the fund to invest up to 51% of its assets in bonds, 36% in stocks, 10% in real estate, and 3% in money markets. As well, up to 32% of its assets is to be invested abroad.

EPF's SAA in action
The effectiveness of SAA strategy can seen in the EPF's portfolio performance for 2017. Referencing EPF's 2017 annual report, I have summarized the portfolio allocation and performance of each asset class in the table below:
EPF 2017 Asset Allocation and Gross Income
Based on the table above, it is certainly very impressive for EPF to be able to generate returns of 11.46% for equities that is RM334 billion in size! The 8.55% returns from the Real Estate & Infrastructure portfolio can also be considered as above average. The SAA strategy also mandates a large amount of the portfolio to be allocated into MGS, Loans and Bonds, thereby creating a safety net for our savings.

It is also important to note the SAA strategy for 2017 allows EPF to venture into overseas investment. 28% of the total portfolio in 2017 have overseas exposure, contributing 41.45% of the Total Gross Income and generating returns of 10.83%.

All in all, EPF has done extremely well in terms of managing the risk of investing such a huge portfolio as well as ensuring that riskier investment (e.g equities) are able to generate the intended double digit returns.

Can a "Unit Trust" portfolio that mirrors EPF portfolio perform better?
Step 1: Generate EPF's Local and Foreign Portfolio Allocation 
In order to construct an EPF equivalent unit trust portfolio, I would need to determine what constitute the portfolio allocation of EPF towards local and foreign investment. While there is no official declaration of EPF with regards to the exact foreign investment within the asset classes, I have managed to collate information from local news publication in order to make an assumption:


The press statement above serves as basis of breaking down the 28% of total overseas portfolio for 2017 into assets classes as shown in the "simulated" table below:
Simulated EPF Portfolio for 2017
Step 2: Matching Unit Trust Categories to Simulated EPF Portfolio
The table below show matches the simulated EPF portfolio to Unit Trust Categories under Conventional and Shariah:
Matching EPF Portfolio to Unit Trust Categories
Step 3: Compare Unit Trust Fund Portfolio Returns versus EPF Returns for 2017
The Unit Trust Portfolio for Conventional and Islamic are constructed based on the fund returns  in 2017 as shown in the tables below:
Conventional Unit Trust Portfolio equivalent of EPF for 2017
Islamic Unit Trust Portfolio equivalent of EPF for 2017
The constructed Conventional Unit Trust Portfolio was able to generate returns of +12.35% while the Islamic portfolio returned +8.72%. In comparison to EPF's 2017 dividend of 6.90% for Conventional and 6.40% for Islamic, both unit trust portfolios were able to outperformed EPF.

Step 4: How does the same unit trust portfolio fare in 2018?
As mentioned earlier in this blog post, 2018 was a year of losses for equities which significantly impacted the performance of both unit trust portfolios as shown below:
Conventional Unit Trust Portfolio equivalent of EPF for 2018
Islamic Unit Trust Portfolio equivalent of EPF for 2018
A poor performing equity market clearly highlight the weakness of equity based unit trust funds in any portfolio. Such is the case for our simulated Unit Trust Portfolio equivalent of EPF where conventional and islamic portfolios only manage 0.01% and -1.81% respectively. 

If an investor is looking for consistent positive returns for the long run, the best option might be to remain invested into EPF where for 2018, dividend of +6.15% was declared for Conventional Savings and 5.90% for Islamic Savings.
Summary
I have also summarized in the table below the compounded returns over 2 years (2017 and 2018) for both the Unit Trust Portfolios versus EPF dividend return. 

Despite selecting the top performing unit trust funds to be included into the constructed portfolio, EPF compounded returns still outperformed the compounded returns of both Unit Trust portfolios over a period of two years. The consistency of EPF in producing positive return is unparalleled and jives with many Malaysians whom prefer consistent and stable returns for our live savings.

Never the less, unit trust will always be an option for investors with higher risk appetite. An experienced and knowledgeable investor would be able to apply the right strategy in order to take advantage of the various opportunities that arise from market and fund volatility. Huge double digit returns for an investor is totally possible as illustrated in the returns for the 2017 portfolio.

I hope this article has been an enlightening one in terms of helping investors to understand both EPF as well as Unit Trust. If you like this post, please feel free to share this and do follow me at Invest Made Easy Facebook for future updates!

Cheers and Happy Investing!

Join the discussion EPF versus UT Portfolio HERE

Friday 26 July 2019

eUnittrust Tutorial Series

First Time Login

Buying Unit Trust 


Selling Unit Trust


Switching Between Funds



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Using EPF to invest into Unit Trust - Part 2 (EPF versus EPF approved Unit Trust)

For Part 2 of the "Using EPF to invest into Unit Trust" series, I will be sharing the performance statistics of EPF approved Unit Trust Funds versus that of EPF returns over a period of 7 years (2012-2018). 

EPF Approved Unit Trust Statistics
There are in total 278 funds (not inclusive of 9 funds from Amanah Saham Nasional Berhad) approved by EPF (this is based on the the fund list provided by EPF website). All 278 funds are broken down into the following:
 Breakdown of EPF Approved Unit Trust Funds

EPF Dividend Statistic (2012-2018)
Since the Islamic portion of EPF has only two years worth of dividend history, I will be using the EPF Conventional Dividends as the yardstick to compare the performance for both Conventional and Islamic Unit Trust (UT) funds.
EPF Historical Dividend (2012-2018)

Comparison 1: Average (%) Return of all UT Categories versus EPF Dividend
Annual returns for all UT Categories (equity, mixed assets, bond and money market) are summed up and compared against EPf's annual dividend. The result as shown below:
Sum of all EPF Approved UT versus EPF Dividend (Year on Year comparison)
Summary: EPF approved UT funds as a whole performed better than EPF in 4 out of the 7 years. However, EPF has shown consistency over the 7 years by generating positive dividend as compared to UT where in 2018, the average return was negative. It is important to highlight that a negative return can drastically impact many years of compounded return and this will be highlighted in Comparison 4.

Comparison 2: Average (%) Return of Equity based UT versus EPF Dividend
Average (%) Return of UT(Equity Conventional) versus EPF Dividend
Average (%) Return of UT(Equity Islamic) versus EPF Dividend
Summary: Similar trend is observed here for conventional equity UT except that the annual gain or loss are amplified. Islamic Equity UTs on the other hand are struggling with negative return seen in 2018, 2016 and 2014. 

Comparison 3: Average (%) Return of Mixed Assets based UT versus EPF Dividend
Average (%) Return of UT(Mixed Assets Conventional) versus EPF Dividend
Average (%) Return of UT(Mixed Assets Islamic) versus EPF Dividend

Comparison 4: What happens to RM1000 when invested into EPF Approved UT versus investing into EPF?
The outcome of investing RM1000 over 7 years into the Equity based UT category produced the following results:
Cumulative return of RM1000 over 7 years for EPF approved Equity UTs versus EPF
As you can see, the cumulative returns for the first 6 years (2012-2017) indicate that Equity UTs are outperforming EPF return. However a single poor performing year in 2018, resulted in the accumulated return for EPF approved Equity UTs to drop below EPF accumulated return. This is also a similar scenario for the Mixed Asset UTs as shown below:
Cumulative return of RM1000 over 7 years for EPF approved Mixed Assets UTs versus EPF
I have also taken the effort to summarized the cumulative return for all the EPF approved categories in a single table below:
Cumulative Return for all EPF Approved UT Categories
Summary: The overall statistics indicate that only the Unit Trust Funds under the Equity Category are able to "match" the cumulative return generated via EPF dividend. I would also like to highlight an important point where this comparison does not take into consideration the loss of opportunity from the compounding returns you get for having a head start from the larger savings you already have with EPF. 

Conclusion
I hope this article on "EPF approved Unit Trust Funds versus EPF" has in some way helped you in terms of awareness before deciding to withdraw your savings from EPF to invest. I have also simulated several scenarios using the data that I have accumulated. If you wish to obtain those data, feel free to email me at shanesee03@gmail.com.

Tuesday 23 July 2019

Test Case: Leveraging on Market News to Invest into Gold Unit Trust Fund

Update (5 June 2022)

Fund: RHB Gold and General Fund
Period of Investment: 26 July 2019 - 3 June 2022 (1043 days)
Return of Investment: +42.90%


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Positive Gold Miner's Earning Ahead
I came across an article from MarketRealist which talked about Gold Miners's earning season for Q2 is scheduled to start this Thursday (25 July 2019).

According to the report, Gold Mining companies including Newmont Goldcorp (NEM), Agnico Eagle Mines (AEM), and Yamana Gold (AUY) are expected to release their earnings this coming Thursday. The report also include analyst's recommendation on which mining stocks should investors buy based on the expected earnings. 


Standout Gold Mining companies that are expected to see their stock prices benefit from the earnings are AEM and NEM (please remember both names as they will surface again later)

Gold Price has been Bullish
For investors who track gold closely, you would have notice that gold price’s reversal this year has created opportunities in gold stocks. The SPDR Gold Shares ETF (GLD) had gained 11% year-to-date as of Friday. About 11.3% of those gains have come in the last one-and-a-half months. Since the end of May, the S&P 500 and the Dow Jones Industrial Average have returned 6.1% and 7.1%, respectively.

Bullish Gold Price + Positive Earnings = Opportunity!
Now this comes back to this blog post, where we are going test the theory of trying to time the entry of investment based on potential uptick of miner's stock price as well as leveraging on the current bullish trend of gold price.

How to go about this?
Step 1: Identify the right Gold fund to invest into
There are only two Gold based unit trust funds available for Malaysian to invest into (both are available on eUnittrust platform). The two funds are:

  • RHB Gold and General Fund (Conventional)
  • Precious Metals Securities Fund (Islamic)

Step 2: Check portfolio composition of these two funds
Top 5 Holdings of RHB Gold and General Fund consist of Agnico Eagle Mines Ltd (AEM) and Newmont Goldcorp (NEM) which make up 16.48% of the total portfolio. Both which are identified to be attractive BUY by gold analysts.
31st May 2019: RHB Gold and General Fund Fund Factsheet
Similarly the Top 5 Holdings of Precious Metals Securities Fund also consist of Agnico Eagle Mines Ltd (AEM) and Newmont Goldcorp (NEM) which make up 17.52% of the total portfolio.
31st May 2019: Precious Metals Securities Fund Factsheet
Considering that both unit trust funds have exposure to other mining companies apart from AEM and NEM, investors may also enjoy overall increase in these fund returns if gold prices continues to rise over the next couple of months.

Step 3: Invest now
Since this is a test case, I have invested RM1000 into RHB Gold and General Fund via eUnittrust. Coincidentally, there is an ongoing 0% sales charge promotion over at eUnittrust, thereby allowing me to save on the sales charge and allowing me to profit immediately on any uptick of the fund price.

RM1000 investment to validate if this Test Case works!
Details of Investment:
  • Fund Name: RHB Gold and General Fund
  • Amount Invested : RM1000
  • Indicative Price of Fund: RM 0.3547/unit
  • Sales Charge : 0%

Step 4: Now we wait!
Now the fun part starts as I will track the price of the Stock Mining companies that are listed in both funds. Let's see if we are able to make a small profit from this test case!

Cheers and I will be posting a follow up blog post on this somewhere next week. In the meantime, do follow me at Invest Made Easy Facebook for updates and news.

Sunday 21 July 2019

HISTORICAL EPF ANNUAL DIVIDEND RATE

EPF Dividend 2008-2018

YEAR
Conventional
% DIVIDEND
Syariah
% DIVIDEND
1952–1959
2.50

1960–1962
4.00

1963
5.00

1964
5.25

1965–1967
5.50

1968–1970
5.75

1971
5.80

1972–1973
5.85

1974–1975
6.60

1976–1978
7.00

1979
7.25

1980–1982
8.00

1983–1987
8.50

1988–1994
8.00

1995
7.50

1996
7.70

1997–1998
6.70

1999
6.84

2000
6.00

2001
5.00

2002
4.25

2003
4.50

2004
4.75

2005
5.00

2006
5.15

2007
5.80

2008
4.50

2009
5.65

2010
5.80

2011
6.00

2012
6.15

2013
6.35

2014
6.75

2015
6.40

2016
5.70

2017
6.90
6.40
2018
6.15
5.90

%
%

Highest
8.50%
6.40%
Lowest
4.25%
5.90%
Average Last 5 Years
6.38
NA