Kenanga Growth Fund drops -6.03% of NAV Price

Its surprising indeed to see the drop of Kenanga Growth Fund's NAV price from 0.8097 on 31 December 2012 to 0.7608 on 2 January 2013. A drop of -6.03%, thereby wiping out the growth of this fund for the last 3 months.

Fund drops -6.03% between 31 Dec 2012 and 2 Jan 2013

As an investor who is also invested into Kenanga Growth Fund, I have my concerns especially when the drop is only for this fund while the price for competitor funds like AMB Balanced Trust Fund and Hwang AIIMAN Growth remain stable.

Although I understand the risk involved, I still would like to find out what has caused such as sharp decrease in Kenanga's NAV Price. In fact the most of the funds in the Kenanga's family of funds have also fell in terms of NAV Price.

I just wrote an email to Kenanga at kenanga@kenanga.com.my and hopefully they would provide some form of response to the concerned raised. Will update further once I get the response from them.

Cheers and happy investing!

Top 10 Best Performing Unit Trust Funds As of 1st Jan 2013

Let's start the brand new year with a peak into the performance of Unit Trust Funds as of 1st January 2013.

Funds are divided into 4 Categories of Investment each ranked according to their 5 Year Annualized Returns.

Category : Equity Malaysia (Click to Enlarge)

Overview:
1. MAAKL-HDBS Flexi Fund leads the pack for their 5 Years Annualized Returns of 13.85%
2. For 1 Year Performance, AMB Dividend Trust Fund packs a whopping 23.71% returns.
3. The top 5 funds in the Category of Equity Malaysia each provides more then 10% in returns and reflects the high risk nature of investing in Equity.

Category : Asia excluding Japan (Click to Enlarge)

Overview:
1. Due to the volatility of the economy among Asian countries especially in China, we see the funds in this categories struggling to perform. Only 3 Funds managed to post positive returns in its 5 Year Annualized Returns while the remaining 7 are in the negative zones.
2. As the economy picks up, you can see that the 1 year Returns for most of the funds are in the double digit zones.
3. Based on the news I've read, growth in China is expected to improve for 2013 and thereby lies the opportunity for investors to make a short term investment of 1-2 years only.
4. I would advise against having a long term investment in funds from this Category due to its volatility. In fact I believe many investors become frustrated with Unit Trust Investment due to their first purchases are from funds in this Category. Remember always to read the prospectus before investing. Never blindly invest just from listening to agents.

Category : Greater China (Click to Enlarge)

Overview:
1. The funds in this Category invest purely in China. Once again, the 5 Years Annualized Returns from these funds are all in the negative zone.
2. One year returns are in the double digits indicating a recovery in economy of China. For 2013, we expect the recovery in China to continue and I believe these funds would also post profitable returns for 2013.
3. Invest as part of your portfolio diversification and if you have extra funds.

Category : Fixed Income - Malaysia (Click to Enlarge)

Overview:
1. The safest as always is to invest with Fixed Income funds. The funds above are mainly invested in Bonds offered in Malaysia only.
2. Sitting at Rank 1 is AmDynamic Bond with a 5 year return of 8.66% Annualized. Unfortunately this fund has reached its fund size limit thereby stopping all additional investment from investors. Cry not as AmInvestment has launched a similar fund called AmTactical Bond which supposedly would be managed by the same Fund Managers that are currently managing AmDynamic Bond.

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 Fund - A fund 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