Posted by tptan45 > 2013-04-23 09:18 | Report Abuse

Unit trust is one of the best thing that has happened to me. After a deeper understanding of how they mess around with our money, I withdraw everything and did much much better than the professionals.

Posted by lotsofmoney > 2013-04-23 09:22 | Report Abuse

If you can directly invest in shares, why bother about Unit Trust and pay the manager fat salary to invest for you unless you are just incompetent or stupid.

Posted by benhctan > 2013-04-23 11:16 | Report Abuse

Unit Trusts are also very non transparent product.The bottom line is sales target and managers coffers.Launching more new funds to cover up underperforming funds to loot more from incompetent investors.

Posted by kcchongnz > 2013-04-23 12:51 | Report Abuse

Lets face it, few people who dabble in the stock market are competent nor has the time to invest in the right way. One can't say they are stupid. It is just that finance and investing is not their profession and they have no time to up-skill themselves or just simply don't want to. For these people who still want to obtain a better return through the equity market, they need help and unit trusts is one of the options. Yes, fees, upfront and annual management expense can eat into their return in a big way. But I believe, with the lower return after fees, hopefully they can still get about 6% a year ex all fees and expense which generally should be able to achieve, it is still ok lah (There are passive ways of investing which cost less). This kind of return is still good compared with fixed income. I would say it is much better than the majority of the stock market speculators and gamblers. Do you know how many people lose tons of money gambling in stocks like KNM, Pasukgb, Ivory, MKLand, Patimas, Asupreme, Compugates, etc etc.

There are many individual investors who claim that they have been making tons of money in the market. The majority of these people probably have forgotten, or refuse to remember that they have lost a sum more than what they have made some time ago. It is a jungle out there in the stock market. Many investors get pulled in by the greater fool theory and buy stocks at all-time highs only to panic later during a pullback. Below is the summary of a research:

In their 2009 paper on “option trading and individual investor performance” , Rob Bauer, Mathijs Casemans and Piet Eichholtz examine the performance and persistence of individual investors trading at a Dutch online broker. Using a database consisting of more than 68,000 accounts and eight million trades in stocks during January 2000 to March 2006, they find that: During 2000-2006, the average investor has negative alphas, meaning the return is below the market return. Not even the top tenth of performance manages to beat the market consistently. Those in the bottom tenth of performance lose more than 90% of value.

Posted by CFattLoong > 2013-04-23 13:02 | Report Abuse

U forgot to mention many ppl also lose money gambling in KHSB after listening to half past six "sifu".

Posted by kcchongnz > 2013-04-23 13:36 | Report Abuse

Do I forget anything? [Many people also lose money gambling in KHSB after listening to half past six "sifu"?]

Lets examine each and everyone of your baseless accusation.

If people lose money in gambling in KHSB,or any other stocks, whose fault is it? Who forced you to gamble? Why gamble?

Why must you listen to others? If you do, whose fault is it? Why must you listen to this "sifu"? Did this "sifu" misled you with some deceiving information, cheat your money, rob you, or these people lost money because of their own fault in gambling?

Lets just look at the long-term and short-term return of KHSB for the last 5 years to see if it is really that bad as projected by you:

KHSB 0.610 23/04/2013
Period 2-week 6-month 1 year 2-year 3 year 4 year 5 year
Price 0.625 0.420 0.515 0.370 0.470 0.350 0.680
Return of stock -2.4% 45.2% 18.4% 64.9% 29.8% 74.3% -10.3%
CAR -47% 110.9% 18.4% 28.4% 9.1% 14.9% -2.1%

For example, if one invest (not gamble) in KHSB 2 years ago which traded at 37 sen and keep until now, he makes 65%, of a compounded annual return of 28.4% a year, more than twice the return of the market. If bought 4 years ago at 35 sen, return is 74.3% or a CAR of 14.9% a year, still much higher than the market return. Even 1 year ago at 51.5 sen, still make 18.4%, damn good. But if one bought it at 68 sen 5 years ago, at the time of the peak of the market then, he loses 10.3%, of just 2.1% a year.

So is investing (not gambling) in KHSB bad? Are you making a wild accusation against an individual? What do you have to contribute?

Posted by lotsofmoney > 2013-04-23 13:37 | Report Abuse

The problem with Unit Trust is that all the "Agents" are super eager to push you to buy as much as possible to maximise their commission. One actually tell me that he does not care even his client "go to hell". I had many bitter experience with unit trust and had lost a lot of money. I had invested in the famous CIMB Mena Trust and lost 75% of my investment. I bought one million Greater China Trust just before the Beijing Olympic and the price increased from 32cts to 45cts and foolishly I listen to THE MANAGER to wait. At the end sold at 12cts!

The point I am trying to make is that all these Unit Trust people are only interested in their commission and as far as they are concerned, the client can go to hell.

Posted by kcchongnz > 2013-04-23 13:50 | Report Abuse

My own experience is also the same. I think I didn't lose money, but the return was so meager that it is way below even the prevailing interest rate then, taking into consideration that there is higher risk involve.

I kind of agree with lotsofmoney of his statement "all these Unit Trust people are only interested in their commission and as far as they are concerned, the client can go to hell."

Not only unit trust agents, even the high sounding licensed financial advisers with CMSRL and CUTA. The industry is in a shamble. But I don't agree that we pull out the machine gun and shoot everybody.

Posted by benhctan > 2013-04-23 16:03 | Report Abuse

If you bet on a horse, that's gambling. If you bet you can make three spades, that's entertainment. If you bet cotton will go up three points, that's business. See the difference.

So to the man in the street,speculating,investing and betting in the stock market is like doing business.

Investors here know their own risk profile and they know how to manage their own investment.So why must they LISTEN to sales intermediaries!

Even the best government fund like Temasek Hldgs lost heavily investing in Citigroup and AIG during the subprime mortgage crisis.

Posted by Shane My > 2013-05-02 15:07 | Report Abuse

the key to unit trust investing is long term and consistent investment. when you speculate into unit trust and purchase newly launched funds based on hype,thats gonna cost u. as was the case of china funds. investing blindly is akin to gambling. my 2cents.

Posted by kcchongnz > 2013-05-02 15:16 | Report Abuse

Shane My, I guess you must be in the industry. Could you furnish us some information of unit trust in Malaysia? Could you let us know stuff like these:

1) How many funds are there in Malaysia? for simplicity sake, just limit it to pure equity fund.
2) what is the average or median return of this funds, 1 year, 3-year, 5-year, 10 year?
3) What is the return of each quartile of the funds; say the top 10%, the lowest 10% etc in the respective year returns?
4) How are they compared to the benchmark, be it be KLCI index, or whatever is appropriate?

Thank you first.

Posted by Shane My > 2013-05-02 15:34 | Report Abuse

hi kcchongnz, you can find most of the information on my blog. i studied the industry and basically it is designed for long term and not short term speculation. the top 10 malaysia equity funds for 5 years range from 10-15% per annuam annualized. the best performing are non public mutual funds. i just posted an article today on top 10 bestperforming fund. just take a look at the equit malaysia category.

Posted by Shane My > 2013-05-02 15:37 | Report Abuse

as for the number of pure equity funds, i am not to sure. i know the total number of unit trust funds is 600+ and counting. as for benchmarking with klci, the top 10 outperforms the index, just pick any of the top 10 and look at the factsheet. :-)

Posted by datuk > 2013-05-02 15:40 | Report Abuse

The best is to invest in index fund due to its low admin cost....and if inevsting in index fund with the dollar cost averaging......kayalah kita.....the return is very much better than other type of unit trust funds.

Posted by Shane My > 2013-05-02 15:43 | Report Abuse

datuk, not necessary. however both unit trust or index fund have the same concep of dollar cost averaging for long term investor.

Posted by datuk > 2013-05-02 15:48 | Report Abuse

ShaneMy.......if you take performance of index fund with every 3 years as interval period for measurement since 1990.....i don't see any other type of funds performed better than the index fund. The period can be back tracked to 1970....

Posted by Shane My > 2013-05-02 15:51 | Report Abuse

Datuk..share me a sample of index fund available for Malaysian. Would like to take a look. :)

Posted by Shane My > 2013-05-02 15:56 | Report Abuse

Answering to lotsofmoney

"The problem with Unit Trust is that all the "Agents" are super eager to push you to buy as much as possible to maximise their commission. One actually tell me that he does not care even his client "go to hell"."

This is exactly what is happening...unit trust was designed in the first place to allow the public a chance to invest without the need to worry about the fundamentals and technicality of stocks. Then when more and more agents promote UT, it becomes competitive and you start getting unscrupulous agents trying to make sales purely for the commission.

If you intend to invest in unit trust, make sure you engage a unit trust consultant that is knowledgeable. By asking a few questions and asking how a unit trust works can tell you loads about the level of knowledge and confidence of an agent.

Here's an article that I wrote about why Unit Trust is negatively perceived.

http://invest-made-easy.blogspot.com/2013/04/4-reasons-why-unit-trust-investing-is.html

Posted by kcchongnz > 2013-05-02 16:12 | Report Abuse

Shane, thanks for your prompt reply.

"the top 10 malaysia equity funds for 5 years range from 10-15% per annuam annualized."

Don't you think 10% and 15% is hell of a difference for a 5-year annual return? Which is which, 10% or 15%?

By the way, I would very much appreciate if you could provide information as requested above and re-appended below, or something like that.

2) what is the average or median return of this funds, 1 year, 3-year, 5-year, 10 year?
3) What is the return of each quartile of the funds; say the top 10%, the lowest 10% etc in the respective year returns?
4) How are they compared to the benchmark, be it be KLCI index, or whatever is appropriate?

Thank you.

Posted by houseofordos > 2013-05-02 16:17 | Report Abuse

unit trusts tend to over-diversify... seldom you will find a unit trust that does focus investing, hence their returns will either track the index or slightly better...

for me I invest a small portion in unti trusts only for overseas exposure at a low rate through fund supermart (<2%). For malaysian stocks, i would rather buy the stocks myself...

Posted by Shane My > 2013-05-02 16:25 | Report Abuse

kcchongnz, It's difficult to give you the details here, typing in simple font. You can find every information you have from my blog. In this post, you can find out what are the best performing unit trust over 10 year period. No need for 3 or 5 years.

http://invest-made-easy.blogspot.com/2013/04/4-reasons-why-unit-trust-investing-is.html

For benchmarking, you can take a look at the factsheet Kenanga Growth:

http://www.fundsupermart.com.my/main/admin/buy/factsheet/factsheetMYKNGGF.pdf

Posted by Shane My > 2013-05-02 16:26 | Report Abuse

Houseofordos...some funds are performing better then the index. Refer to link above for Kenanga Growth. :)

Posted by Shane My > 2013-05-02 16:30 | Report Abuse

Lastly, I need to repeat this phrase
"unit trust was designed in the first place to allow the public a chance to invest without the need to worry about the fundamentals and technicality of stocks"

If you're an experienced stock investor, then it's obvious that you can decide on how you want to invest and grow your money. The decision making is yours and you can exercise more control. However, not everyone has the luxury of time and the emotional control to be successful in stock investing. Hence other options such as unit trust or ASB are available for the public. :)

Posted by houseofordos > 2013-05-02 16:49 | Report Abuse

Shane.. i definitely agree with you.. in fact I used to be unit trust agent before with a very famous fund house (large fund house but seriously over-rated- i think you know which one i m talking about)....the performance of the funds leaves much to be desired... especially the China funds.... lost big time there

Now I still invest in unit trusts but really do proper research before going in... basically fund investing also need to do research ,... on macro outlook , theme play etc... cannot just keep topping up

Posted by ryan78 > 2013-05-02 17:13 | Report Abuse

Funds manager would cheat you like fengshui masters for 18 years!

If they were so good why would they need to help others invest? Why not loan and they can and dump everything into investments?

Fund managers, insurance agents, brokers and fengshui masters most are only trying to make a living off their clients.

Posted by kcchongnz > 2013-05-02 17:16 | Report Abuse

I think unit trust has a place in the investing environment in Malaysia.

Posted by kcchongnz > Apr 23, 2013 12:51 PM | Report Abuse X

Lets face it, few people who dabble in the stock market are competent nor has the time to invest in the right way. One can't say they are stupid. It is just that finance and investing is not their profession and they have no time to up-skill themselves or just simply don't want to. For these people who still want to obtain a better return through the equity market, they need help and unit trusts is one of the options. Yes, fees, upfront and annual management expense can eat into their return in a big way. But I believe, with the lower return after fees, hopefully they can still get about 6% a year ex all fees and expense which generally should be able to achieve, it is still ok lah (There are passive ways of investing which cost less). This kind of return is still good compared with fixed income. I would say it is much better than the majority of the stock market speculators and gamblers. Do you know how many people lose tons of money gambling in stocks like KNM, Pasukgb, Ivory, MKLand, Patimas, Asupreme, Compugates, etc etc.

There are many individual investors who claim that they have been making tons of money in the market. The majority of these people probably have forgotten, or refuse to remember that they have lost a sum more than what they have made some time ago. It is a jungle out there in the stock market. Many investors get pulled in by the greater fool theory and buy stocks at all-time highs only to panic later during a pullback. Below is the summary of a research:

In their 2009 paper on “option trading and individual investor performance” , Rob Bauer, Mathijs Casemans and Piet Eichholtz examine the performance and persistence of individual investors trading at a Dutch online broker. Using a database consisting of more than 68,000 accounts and eight million trades in stocks during January 2000 to March 2006, they find that: During 2000-2006, the average investor has negative alphas, meaning the return is below the market return. Not even the top tenth of performance manages to beat the market consistently. Those in the bottom tenth of performance lose more than 90% of value.

Posted by Shane My > 2013-05-02 18:50 | Report Abuse

well said! :-)

Posted by ryan78 > 2013-05-02 19:00 | Report Abuse

If the bomoh or witchdoctor knows what number to buy why would he sell it to you and not bet his entire life savings on it?

Same also to the fund managers.

Posted by kcchongnz > 2013-05-02 19:26 | Report Abuse

come on ryan, don't equate fund managers with bomoh or witchdoctor. Fund managers are qualified investment professionals please.

Posted by ryan78 > 2013-05-02 19:32 | Report Abuse

Qualified in what sense? Having insider contacts with crony directors and industry players about when to buy/sell and huat together with the tea party members?

But then did you ask yourself where are the investors and his clients in the picture? Answer is: Their MONEY!

Everything has a reason.

So as I said it earlier, if the witchdoctors knew what numbers to strike everyday, they should have throw in their life savings without telling a word to people or try to sell their predictions.

The catch is if you are the one who knew every result or the next move(the organizer or gaming company or future options or the company itself, etc.), where are you going to get the money? Someone has to fork out thre money for you to gain right?

Posted by benhctan > 2013-05-02 22:27 | Report Abuse

Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.

Posted by ryan78 > 2013-05-02 23:54 | Report Abuse

Even the rich needs advise on how to grow their money?

Posted by benhctan > 2013-05-03 09:44 | Report Abuse

Myth 1:Unit trust is "I help you you help me"

Don't query where I invest your money be it in my own company (like this big glamorous fund company with lots of paid winning awards,former CEO now in Adventa Bhd) and also if needed I'll do national service by buying the junk debts of Danarharta Bhd (year 2000 case)

Just wait for me declaring units as dividend and not cash payment as I want to lock you under my control.
My small little annual prospectus will show you I always perform better than KLCI.
Have trust in me and my "Janji is always Capati"

Posted by kcchongnz > 2013-05-03 11:26 | Report Abuse

Fund managers are trained in finance and investment. Many of them are professionals having the qualification of a CFA, or chartered financial analysts. They have undergone rigorous academic studies and with some on job experience. Fund management is a profession, a professional provides services to the public and earn an income for a living. They are not just a remisier or a broker. So you statement below is out of context.

"So as I said it earlier, if the witchdoctors knew what numbers to strike everyday, they should have throw in their life savings without telling a word to people or try to sell their predictions."

"Even the rich needs advise on how to grow their money?"

Yes i would agree with the above statement because a lot of rich people earn their wealth through mostly business. Business people got no time to study the market, nor they have the knowledge about investing. But they still need to grow or at least preserve their wealth against inflation and for retirement. Many rich people punt in the market and lost their wealth, because they have no knowledge of investment.

I am not involve in the fund management industry. Neither am I a unit trust agent. I also do not invest in unit trust now, before yes and not happy with the results. But I think I need to say a few fair words against wild allegations.

Posted by Jonathan Keung > 2013-05-03 11:34 | Report Abuse

i have nothing against unit trust investment but we need to be careful in choosing the right type of funds to invest. avoid investing in the same category of funds.

the only complaint against unit trust is the high sales charges loaded on the funds compared to other countries. why must we invest thru agrents can't we go direct invest directly thru the funds companies.

this is something the agents always tend to avoid or refused to answer. not all UTC is experienced in the market. this is my personal view point.

Posted by ialatif > 2015-06-04 15:33 | Report Abuse

i have invested in unit trust since i started working in the 20's. I do make about 8% for ASB. I have also invested in OSK-UOB,Public Mutual, Pheim, Prudential and RHB. I have also have a Private Manage Fund by Phillips Capital 3 years return about 12-13%. Lost money in Mena Fund luckly not much & also in All Stars Funds by UOB. i have also invested in US and China funds bought them when they are down return about 10% a year. So unit trust is quite a good investment compared to fixed deposits but buy them when the market is low.