Posted by Lan Yong How > 2015-04-22 17:18 | Report Abuse

thank you very much for your invaluable advice.If I don't have so much money to cover all the 100 reits,which are the top picks you recommend?

Posted by NOBY > 2015-04-22 17:38 | Report Abuse

In order for 50% of the fund managers to outperform the index, there must be 50% others who under-perform. A manager that outperforms this year may not continue outperforming the next 5 years. What are your chances of finding a fund manager that can beat the market year in year out for a long period or the next Warren Buffet or Joel Greenblatt ?

This phenomenon is more prevalent in more efficient markets like the US. In fact in US, ETFs are becoming increasingly popular due to the vast under-performance of active fund managers. An ETF (exchange traded fund) does not attempt to outperform an index but merely to mirror its performance. It is an ideal investment tool for an investor who has a long term investment horizon since these management fees charged by active funds are the one of the main reasons of under-performance in the long run.

For me, ETFs are a quick and easy way to get exposure to a certain market. They have low upfront cost (nothing more than brokerage you pay vs exorbitant service charges if you buy through agents) and low loading costs (low management fee - normally less than 1% of fund NAV).

Posted by chyokh > 2015-04-22 22:47 | Report Abuse

If you invest in unit trust, you pay 5% service charge when you buy. After that they deduct 1.5% annually as management fees quietly without you knowing it. Wonder why your fund is losing money or under performing even though the market has gone up? They show you all the "good" past performance and nice charts of their funds but the performance has not taken into account of the fees. It is downright misleading for the ut companies and agents to market their funds using these past performance charts.

Posted by bsngpg > 2015-04-22 22:50 | Report Abuse

I asked my friends who invest in Bursa, 10% beat the broad mktg, 30% making positive return but less than the broad mktg and 60% are losing money to Bursa.
About the same %(1:3:6) was quoted by the 40 year experience sifu in Bursa, Mr Len Yan, in one of his article published in Nanyang sometime ago.

I also asked my friends who invested in Public Mutual, almost all are making 6-10% annual return from Public Mutual in reasonable timeframe.

Posted by kcchongnz > 2015-04-23 08:57 | Report Abuse

]Posted by ks55 > Apr 22, 2015 04:29 PM | Report Abuse

For the 50 sen Unit Trust unit you buy, 5 sen goes to agents (so called CFP). Another 45 sen keep with the Unit Trust Manager to invest. Sure make money? Bullshit.

Just find out how many people lost their hard earned money putting in PRS.
Just find out how unit trust that participated in PRS got removed. Unit Trust really sucks.

Don't believe you just read Public Mutual Annual Rpt to see how much it sucks. ]

Good comments. Just to let you know that you can invest in unit trust by yourself in the FundSuperMart platform without going through unit trust agent. The sale charge is lower at 2%, I think, much lower than your 10%. Which fund charges so high? May be some overseas special investments for high net worth investors. Nothing is free in this world.

Posted by kcchongnz > 2015-04-23 09:29 | Report Abuse

Posted by ks55 > Apr 22, 2015 04:43 PM | Report Abuse

Those who are not confident to invest direct in stock market, my advise is leave your money in EPF.

The above is a very sound advice, in my opinion.

Posted by repusez > 2015-04-23 09:56 | Report Abuse

the new generation of unit trust investor will invest through online unit trust resellers like fundsupermart or eunit trust, for one their sales charges are capped at 2% and during promo 1% or lower. Good thing is that you can monitor the funds online and do switching without the help of agents and commision.

for public mutual even though the offer online transaction but the charges is still at 5-6% and they don't show u the performance of your fund, u need to manually calculate yourself. can go to morningstar or lipper fund to compare performance of all the funds

most also buy PRS for the 3K tax relief, again public mutual charge 3% but online reseller offer 0% sales charge on selected fund house.

Posted by kcchongnz > 2015-04-23 10:43 | Report Abuse

Posted by NOBY > Apr 22, 2015 05:38 PM | Report Abuse

For me, ETFs are a quick and easy way to get exposure to a certain market. They have low upfront cost (nothing more than brokerage you pay vs exorbitant service charges if you buy through agents) and low loading costs (low management fee - normally less than 1% of fund NAV).

Good comments. If I were to invest in overseas market, i will do the same thing too.

Posted by kcchongnz > 2015-04-23 11:28 | Report Abuse

Posted by bsngpg > Apr 22, 2015 10:50 PM | Report Abuse

I asked my friends who invest in Bursa, 10% beat the broad mktg, 30% making positive return but less than the broad mktg and 60% are losing money to Bursa.
About the same %(1:3:6) was quoted by the 40 year experience sifu in Bursa, Mr Len Yan, in one of his article published in Nanyang sometime ago.

I also asked my friends who invested in Public Mutual, almost all are making 6-10% annual return from Public Mutual in reasonable time frame.


Unbiased and excellent comments. We will deal with the Public Mutual Fund soon, with facts.

Posted by chyokh > 2015-04-23 12:58 | Report Abuse

You should ask your friends who invested in Public Mutual overseas funds especially the China funds. Just ask them how much they have lost in 5 years. It will open your eyes.

Posted by NOBY > 2015-04-23 13:19 | Report Abuse

Frankly speaking Public Mutual used to be good, but as their market share increase, they need to keep launching new funds to keep up with the inflow. They have so many Malaysian funds which frankly invest in almost the same thing. The only fund which I see may have some value are their small cap funds, but the fund has been closed for some time.

For me, if I m looking for outperformance, I will typically go for small cap funds as the investment universe of these funds are less efficient hence the long term returns have higher chance of outperformance. If you buy a big cap fund which buys mostly the stocks on the index and charges you a 2% annual management fee, how can you hope to outperform the index ?

Posted by chyokh > 2015-04-23 13:44 | Report Abuse

Public Mutual always launched their new funds at the market peak because this is the best time to get SALES as investors are at their most optimistic. The investors who buy their new funds will always be buying stocks at their peak prices. Shortly after, the market corrects and PM and its agents will somehow manage to convince these investors to look at the long term 3-5 years, if possible, keep it there forever. 1.5% x 5 years = 7.5% management fees to PM and agents. Somehow, PM always win. Do I need to tell you who are the losers? If the market crashes, they will tell you to practise dollar cost averaging. Put more money in to support their bad investment decisions. More sales and service charges again to the winners!!
The timing of the launching of PM new funds corresponding to market peaks is so accurate, I have been using it as a signal to get out before the market crashes.

Posted by kcchongnz > 2015-04-23 13:56 | Report Abuse

[Posted by NOBY > Apr 23, 2015 01:19 PM | Report Abuse

Frankly speaking Public Mutual used to be good, but as their market share increase, they need to keep launching new funds to keep up with the inflow. They have so many Malaysian funds which frankly invest in almost the same thing. The only fund which I see may have some value are their small cap funds, but the fund has been closed for some time.

For me, if I m looking for outperformance, I will typically go for small cap funds as the investment universe of these funds are less efficient hence the long term returns have higher chance of outperformance. If you buy a big cap fund which buys mostly the stocks on the index and charges you a 2% annual management fee, how can you hope to outperform the index ? ]


Good comments above. But what do you think is think is Public Mutual and his agent’s interests, to build big funds and lots of funds to get more fees for assets under management, or to try hard to earn more return for unit holders by investing in small capitalized stocks and risk being wrong? Whose interest will they care if there is a conflict?

Posted by NOBY > 2015-04-23 15:40 | Report Abuse

Actually the only selling point for public mutual these days are that they have the largest market share. Their funds have been underperforming their peers for the past few years.

Posted by kcchongnz > 2015-04-23 16:50 | Report Abuse

Posted by ks55 > Apr 23, 2015 04:11 PM | Report Abuse

kcchongnz -- Can you please tell us why out of 19 funds removed from PRS scheme, 13 belongs to Public Mutual?

Why these funds were removed?
How bad were they underperformed?
How if these funds were to compare with REITs at the time they were launched and the day they were removed ?
If hard to get the statistic for that day, using today's value also can.

This is to prove my theory that Unit Trust can never be a better alternative to direct involvement with REITs, albeit high entry commission and annual management fees they charged.


ks55, unfortunately I am not involved in the unit trust industry now. I was a licensed financial adviser before and did know and would able to find out then, but not now. Sorry can't help.

By virtue that REITs investing is a direct investment without all those problems and fees described in this article, i do believe that Reits will perform better than UT.

Posted by chyokh > 2015-04-23 21:49 | Report Abuse

coldrisks, you can get the info from P Mutual website and they will announce in all the major newspaper about new funds launching.

Posted by skpwatcher > 2015-04-27 10:57 | Report Abuse

Bsngpg ==> i agree with ur frens feedback on unit trust returns. Mine are doing fairly well above 10%. I was in the 60% 'loser' group n decided to let the professionals do it. Well, no regrets on moving to unit trust investmt as it meets my ROI. Good decision and i am still holding onto them except one.

Chyokh ==> i also invested into a China fund for 4.25years. I was in the red or 4 years but the last 3mths, it rebounded and i made 6% compounded return YOY before i sold in Feb 15 to pay for something. If i held till now, it would have been 8% compounded YOY.

Lets put it this way, we need patience in investing in unit trust. If cannot wait n can do better with other investment instruments, by all means, take that path.