AMB Dividend Trust Fund or AMB Value Trust Fund....Decisions Decisions!

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Tomorrow is the much awaited Phillip Capital Annual Investment Fair! One of the key reason I'm heading over to the fair tomorrow is to take advantage of the 0.5% sales charge fee and increase my units on existing invested funds. Secondly, I'm also thinking about purchasing a new fund from Amanah Mutual Berhad (AMB). 

Initially I've set my mind on purchasing AMB Dividend Trust Fund (AMBDTF) who is ranked 2nd in the Equity Malaysia Category for 5 Year Performance. When I wrote the article on Lipper Award two days ago, I found out that AMB Value Trust Fund (AMBVTF) was the Lipper Award winner for Best Equity Malaysia Fund under the 5 Year category. 

So which fund should I invest in?

In this article, I intend to do a comparison between both funds and decide which fund is the best. Before that, let me share some background information about the fund house itself:

Background about Amanah Mutual Berhad (AMB)

Amanah Mutual Berhad (AMB) is a unit trust management company regulated by the Securities Commission of Malaysia (SC). AMB is a wholly-owned subsidiary of Amanah Saham Nasional Berhad (ASNB), and Permodalan Nasional Berhad (PNB) is the ultimate holding company. The corporate structure for AMB is a shown below:

It does make me wonder why people invest into Amanah Saham Nasional Berhad (ASNB) when there is a much better option to purchase from Amanah Mutual Berhad. Point to ponder especially when you consider that both ASNB and AMB have the same nature of investment.

Why choose between AMBDTF and AMBVTF?

AMBDTF is the best performing Equity Malaysia Fund for 2012 while AMBVTF is the Lipper Award Winner for Best Equity Malaysia fund under the 5 Years Category. In fact both funds are the best performing fund under AMB's Family of Funds, just see below:

General Comparison Between AMBDTF and AMBVTF

Details	AMB Dividend Trust Fund (AMBDTF)	AMB Value Trust Fund (AMBVTF)
Type of Fund	Income and Growth Fund	Capital Growth Fund
External Investment Manager	HwangDBS Investment Management Berhad	UOB-OSK Asset Management Sdn Bhd
Investment Philosophy	AMBDTF will invest in a well-diversified equity portfolio, and which will focus on high (and potentially high) dividend yielding equities in Malaysia and other eligible market. May also invest in fixed income securities as a tactical defensive measure depending on market conditions	Investment of AMBVTF will invest into securities which are trading below their intrinsic values. The Fund is structured to provide investors with capital growth in the medium to long term.
Benefits for Investors	Diversified Portfolio AMBDTF is a fund that provides investors the opportunity to invest in a well-diversified Malaysian and Asian ex-Japan equity portfolio with exposures ranging from 70% to 99.8%. Tactical Defensive Measure The portfolio is an actively managed defensive Fund that allows 30% of its NAV to be invested in fixed income securities as a tactical defensive measure depending on market conditions.	Provides investors with an alternative approach when investing in equity markets. Value Investments do not necessarily behave in a similar fashion when compared to growth oriented investments. This is generally due to the fact that value funds are normally associated with neglected or “out-of-favour stocks” while growth funds are focused on stocks with the above average growth.
Specific Benefits*	Eligible Unit Holders of AMBDTF will be given free Group Personal Accident (GPA) coverage. Unit Holders holding a minimum amount of 4,000 Units and above will automatically be covered under the GPA insurance for accidental death and Total Permanent Disability (TPD). The sum insured would be RM0.25 for every Unit held subject to a minimum investment of 4,000 Units and maximum coverage of RM200,000.	Eligible Unit Holders holding Class A-MYR Units of AMBVTF will be given free Group Personal Accident (GPA) insurance coverage. Unit Holders holding a minimum of 2,000 Units and above will automatically be covered under the GPA insurance coverage. The sum covered would be RM0.50 for every Unit held subject to a minimum investment of 2,000 Units and maximum coverage of RM200,000.
Initial investment	RM500	RM500
Subsequent investments	RM100	RM100
EPF Approved Fund	YES	YES

*Insurance protection is one of the reason why I am considering  investing long term in either one of this fund. 

*Another observation here is that AMBVTF offer better insurance coverage due to the sum covered is RM0.50 for every unit owned as compared to AMBDTF which cover RM0.25 for every unit owned. However both are subjected to a maximum coverage of RM200,000 only.

Asset Allocation for AMBDTF and AMBVTF

Nature of Asset Allocation for AMBDTF (as stated in Prospectus)

Asset Allocation for AMBDTF

Actual Asset Holdings for AMBDTF as of 31 Dec 2012

Nature of Asset Allocation for AMBVTF (as stated in Prospectus)

Asset Allocation for AMBVTF

Actual Asset Holdings for AMBVTF as of 31 Dec 2012

Blue blue blue chip sticks all the wayyyyy

Performance Comparison between AMBDTF and AMBVTF

a) Cumulative Total Returns (1 Year, 3 Years and 5 Years)

PERIOD (as of 31 Dec 2012)	AMBDTF	AMBVTF
1 Year	22.79%	14.39%
3 Years	57.15%	47.27%
5 Years	85.59%	71.00%

*source from AMB Fund Factsheet

Cumulative Total Return Better Performer : AMBDTF

b) Average Total Return Per Annum (1 Year, 3 Years and 5 Years)

PERIOD (as of 24 Jan 2013)	AMBDTF	AMBVTF
1 Year	19.23%	10.76%
3 Years	15.19%	11.71%
5 Years	13.56%	12.00%

*source from AMB

Average Total Return Per Annum Better Performer : AMBDTF

c) Year to Year % Actual Returns (from 2008 - 2012)

YEAR	AMBDTF	AMBVTF
2012	22.73%	14.28%
2011	7.52%	2.66%
2010	18.92%	25.08%
2009	38.66%	38.37%
2008	-14.86%	-16.04%

Year to Year % Actual Returns Better Performer : NONE

Summary of Performance

In terms of performance, both funds are fairly close. In my opinion, AMBDTF has a slight edge over AMBVTF for the following reasons:

• Better performance in terms of cumulative total returns and average total returns.
• Lower losses during 2008 economic recession as indicated in the year to year % actual returns table. This is vital as it indicate how well the fund manager manages the fund during a downturn.

While AMBDTF is a better performer then AMBVTF, do remember that past performance of a fund does not reflect future performance. I tend to use past results as an indicator on how well a fund manager manages a fund especially when times are bad. 

Overall Summary

Referring to the earlier part of this article, one of the reason I love both funds is because of the insurance protection offered. AMBVTF has a better coverage value per amount invested as compared to AMBDTF. However for long term investors, the maximum coverage of RM200,000 is easily achievable. 

Meanwhile in terms of fund performance, has the AMBDTF edge albeit just a little compared to AMBVTF. Both funds are capable of producing double digit returns annualized. 

Finally the question of which fund should I choose to invest in? 

That's for me to know and for you to decide for yourself (smiley face). I've already shown you the facts and  figures plus.....since I already own a few other pure equity malaysia funds in my portfolio, I might consider something different....if you know what I mean!

Cheers and happy investing!

PS : If you're confused with some of the terms used, I would suggest that you read the following:

• Saving On Sales Charge Fee When Purchasing Unit Trust Fund
• A Guide Towards Understanding Unit Trust Performance Table

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