Posted by VenFx > 2016-09-13 02:13 | Report Abuse

Tq For the thoroughly explanatory article .

Posted by jonatlau79 > 2016-09-13 09:15 | Report Abuse

Brother, KLCI 1,000 Climb To 1,500 You Only Earn 41% ? Am I Mention Wrong ?

Posted by soojinhou > 2016-09-13 09:29 | Report Abuse

"The average return of the unit trusts investing in Malaysia under “Equity Malaysia” as shown in Table 1 below return a total of 34.2%, or a CAGR of 6.1%, a shade below the return of the broad market." No better than buying a bunch of REITs and sleep on it.

Posted by Bruce88 > 2016-09-13 09:30 | Report Abuse

It is easier to say, to select the right fund is never easy. May be KC can shed some light on this subject..

Posted by Icon8888 > 2016-09-13 09:33 | Report Abuse

great article. I gained a lot of knowledge form it

Posted by MG9231 > 2016-09-13 09:46 | Report Abuse

Well, ICAP's AGM is around the corner, Icap shareholders must print this article and send it to TAN TENG " Bull" for explanation during the upcoming AGM why he , as a fund manager instead searching to invest in those under valued stocks. He prefer to timed the market and ended up lousy performance for past 5 years. Browsing through the latest Annual Reports of Icap, Notice he dare not and no longer boast his recent years compounding returns as he has made a wrong judgement for his decision by keep telling bear is coming.

Posted by yfchong > 2016-09-13 12:54 | Report Abuse

Unit trusts.... when you pick is good it will perform else.... it will stuck there forever.... quote example i am just lucky with a china funds launched in 2006 / 2007... since day 1 it keeps drop till have to do dollar cost averaging..... if not badly bruised....

Posted by PlsGiveBonus > 2016-09-13 12:56 | Report Abuse

Diversify in unit trust can make it safer
Buy 100 unit trust and I can guarantee it is safer
:)

Posted by kcchongnz > 2016-09-13 15:33 | Report Abuse

Posted by Hippo Buy Signal > Sep 13, 2016 12:41 PM | Report Abuse
From KC Chong....
Question:

Past records do not predict the future performance. Sometimes this fund good, sometimes that fund good.
A person with no experience in stock market, how to know which one to choose?
I don't think unit trust is the straight forward answer to those without knowledge. I have seem people made huge loss from unit trust. Then people will say about Dollar Cost Averaging, must select the the best unit trust, etc. Same question again, how do a person without knowledge know how to choose.
If you teach them, then better teach them stock market. And if we teach them, then they will know be categorized as "retail investors who have no knowledge"



Me: Well said. Can't agree more with you.

Posted by kcchongnz > 2016-09-13 15:36 | Report Abuse

Posted by Bruce88 > Sep 13, 2016 09:30 AM | Report Abuse
It is easier to say, to select the right fund is never easy. May be KC can shed some light on this subject..


Well said.

The problem is "right fund" now can be "wrong fund" next year. Few, very few fund managers are consistent. Look at the fund manager of icap. He is supposed to be the oracle of Bursa. But how well has he been performing the last few years?

Having said that i remember Eastspring and Kenanga Growth fund have been a little more consistent.

Posted by MG9231 > 2016-09-13 18:06 | Report Abuse

Mutual fund is actaually a mini Bursa, if you look at its long term unit price for any individual fund is similar to any stock in the Bursa. So, lucks play an important part. You will not be able to know what stocks are they buying and selling anytime. Who operates the fund that you are investing. They normally aggressively promote their funds during boom time hibernate during bear market. In addition, they load up high entrance fees to make sure you will not be able to leave the fund as soon as possible. Then they slaughter you with yearly management fees. Worse still ,you have no chance to pour out your grievances once you buy a wrong funds as no AGM is conducted. They Olson has a strong disclaimer " past years result should not be used to predict their future performance". With points highlighted above, it appears to me the the operators are running sure win business , you , as investors in mutual fund merely rely on God bless you.

Posted by batman11 > 2016-09-13 18:10 | Report Abuse

To prevent getting "slaughtered" by the fund house or the market, you can consider to invest in 0% front loading KLCI tracker fund. We have RHB KLCI Tracker Fund to meet your need. Buy handsomely when KLCI index moves above its SMA 200 line and sell when long term up-trend becoming reversed.

Posted by calvintaneng > 2016-09-13 18:12 | Report Abuse

Posted by MG9231 > Sep 13, 2016 06:06 PM | Report Abuse

Mutual fund is actaually a mini Bursa, if you look at its long term unit price for any individual fund is similar to any stock in the Bursa. So, lucks play an important part. You will not be able to know what stocks are they buying and selling anytime. Who operates the fund that you are investing. They normally aggressively promote their funds during boom time hibernate during bear market. In addition, they load up high entrance fees to make sure you will not be able to leave the fund as soon as possible. Then they slaughter you with yearly management fees. Worse still ,you have no chance to pour out your grievances once you buy a wrong funds as no AGM is conducted. They Olson has a strong disclaimer " past years result should not be used to predict their future performance". With points highlighted above, it appears to me the the operators are running sure win business , you , as investors in mutual fund merely rely on God bless you.

Well said,

Icap TTB is now squeezing everybody by putting Cash in FD and drawing high fees. Better vote him out and replace him with MG9231

At least MG9231 is not a wastrel. Live frugally, wear short, buy slipper from pasar malam and eat at cheap coffee shop to save money just like Warren Buffet eating burger and oreo biscuit everyday.

Change Icap Biz name to Machine Gun Fund.

Hahaha! SOOO GOOOD!!! CLEVER!!!!

Posted by kcchongnz > 2016-09-13 19:43 | Report Abuse

Posted by ks55 > Sep 13, 2016 09:50 AM | Report Abuse
If you think Unit Trusts suck, wait till you see the Insurance companies' life policies.
No more guaranteed cash value (or surrender value), but the value of the units you have at the prevailing price.
Insurance companies will not take care of your interest, but their own backside.
This is the same as Public Mutual.


Insurance life policy, those participate in the profit ones, has two components; one is life coverage and the other investment. The investment return will probably mimic that of unit trusts or managed fund. The killer is the marketing cost. Insurance agents are rewarded with a few hundred percent of the annual premium paid. With this taken straightaway from your policy, how can one get good return from the investment portion of the life policy?

It is just common sense. However, few policy holders understand it. Even licensed financial advisors, not to mention insurance agents, either they don't understand it which i am not surprised, or they deliberately don't want to know.

Sorry, I am just being very direct. Of course there are also some good and knowledgeable licensed professional financial advisors around, but they are far and few.

Posted by mamatede > 2016-09-13 19:53 | Report Abuse

I hate unit trust.. a bunch of small fees sucking my potential yield...dam

Posted by Hiu Chee Keong > 2016-09-13 20:21 | Report Abuse

Some of my friends asked me why other people make moneys investing in mutual fund but they lost. Then i asked them did they put in money every month or regularly, they said no, they only put in one lump sum once only. No wonder, the power of mutual fund is dollar averaging with regular investing. If you only put in one lump sum, then that's depend on luck, if you happen to invest when the market is low, then you win, but if you happen to invest when market is high, then ....god bless you, :D

Posted by kvmohniru > 2016-09-13 21:55 | Report Abuse

the Public bank share is a better bet,solid behind public mutual funds.

Posted by kcchongnz > 2016-09-13 22:16 | Report Abuse

Posted by Hiu Chee Keong > Sep 13, 2016 08:21 PM | Report Abuse
Some of my friends asked me why other people make moneys investing in mutual fund but they lost. Then i asked them did they put in money every month or regularly, they said no, they only put in one lump sum once only. No wonder, the power of mutual fund is dollar averaging with regular investing. If you only put in one lump sum, then that's depend on luck, if you happen to invest when the market is low, then you win, but if you happen to invest when market is high, then ....god bless you, :D


Dollar cost averaging (DCA) has been long debunked in personal finance. The long-term return of the stock market is up. you can't possibly get higher return over a long period by drip feeding your money, compared to invest in one go when you have the money.

DCA, however, is a safer strategy though, for those people who can't sleep well when the market is down.

Posted by kcchongnz > 2016-09-13 23:20 | Report Abuse

Posted by batman11 > Sep 13, 2016 06:10 PM | Report Abuse
To prevent getting "slaughtered" by the fund house or the market, you can consider to invest in 0% front loading KLCI tracker fund. We have RHB KLCI Tracker Fund to meet your need. Buy handsomely when KLCI index moves above its SMA 200 line and sell when long term up-trend becoming reversed.


The long-term return of tracker fund will mimic the return of the broad market, less the annual management expense ratio. You can actually mimic the broad market return by buying the component stocks of KLSE, without having to pay the management fees.

Then you are talking about market timing here which is not for unit trust, which should be long-term investment to get any decent return.

Posted by Hiu Chee Keong > 2016-09-14 08:52 | Report Abuse

why need to debunk DCA at the first place ? it didn't lie to anyone, and didn't miss-lead anyone, the concept is simple straight forward. If one miss-understand it and never try to understand it at the first place, then it is not DCA's fault. Since we can't time the market, we don't know when it's going to be up or down, so we put in money regularly. If market keep going down, whether DCA or one lump sum will go to hell anyway. and if market keep going up, both one lump sum and DCA also make money. yes, long term market is going up, but if you put one lump sum and happen to buy gold when it's 1800, how many year you need to just break even ?

Posted by chokra > 2016-09-14 12:18 | Report Abuse

Everyone who follows Mr kcchongnz columns will agree that kcchongnz gives out good and well thought out advices. For that, we cannot thank him enough. His opinion on mutual funds especially Public Mutual is spot on target. I once got so frustrated with Public Mutual that I wrote a 3 page letter and handed it over to their Wealth Manager and asked her to forward it to their HQ.In my letter, I asked Public Mutual why I would want to waste my time and money investing in many of their non-performing funds. I highlighted that the rates of FD returns were higher than their non-performing funds and named some of the funds I held or had sold off. From my experience,I can safely conclude that their fund managers push their agents to sell slow moving funds that does not benefit its investors in the long run. After carrying out my research, I emailed my Public Mutual agent and asked him whether he was asked to promote slow moving or non-performing funds to their clients. He did not bother to reply to my queries, so I made my own conclusions. The agent had years earlier persuaded me to switched my portfolio from some performing funds to what he claimed was " sure Winners" at no cost in switching. Sad to say, I held those non-performing Public Mutual funds for many years and finally sold it off last year with no profits. These funds were Far East Dividend and China Select fund. Another was a Sukuk fund that the bank Wealth Manager says could pay out 4% to 6% per annum. I sold it off 18 months later because upon reading the annual shareholders report, Public Sukuk was lending out our money to "Highway concessionaires, plantation groups and Power plant operators at below 4% interest. So how can they pay me 4% to 6% per annum. Better invest on your own but with your eyes wide open.Learn from lessons taught by kcchongnz even if it is just discussions in a forum. Keep it up Mr KCCHONGNZ.

Posted by kcchongnz > 2016-09-14 12:54 | Report Abuse

Posted by Hiu Chee Keong > Sep 14, 2016 08:52 AM | Report Abuse
why need to debunk DCA at the first place ? it didn't lie to anyone, and didn't miss-lead anyone, the concept is simple straight forward. If one miss-understand it and never try to understand it at the first place, then it is not DCA's fault. Since we can't time the market, we don't know when it's going to be up or down, so we put in money regularly. If market keep going down, whether DCA or one lump sum will go to hell anyway. and if market keep going up, both one lump sum and DCA also make money. yes, long term market is going up, but if you put one lump sum and happen to buy gold when it's 1800, how many year you need to just break even ?


It will be interesting to watch the video and do some exercises on DCA to see if DCA is a Holy Grail in investing, or is it just a myth

https://www.youtube.com/watch?v=spQFSjSvzwo
http://www.moneychimp.com/features/dollar_cost.htm

Posted by JN88 > 2016-09-14 13:34 | Report Abuse

Never trust in Fund Manager. Only trust warrent rule. Buy low sell high. Only 0.00001% Fund manager is good.

Posted by AyamGoreng > 2016-09-14 13:45 | Report Abuse

kikikiki! yayaya, truth is hurt! pls don't buy unit trust! fund manager want to earn your money only!

Posted by winston1 > 2016-09-14 13:56 | Report Abuse

I have invested some RM130k in Public Mutual using EPF over the past 10 years with current value at RM205k. Returns 75% for the period. It all depends on what funds you have invested.

Posted by kcchongnz > 2016-09-14 14:10 | Report Abuse

Posted by winston1 > Sep 14, 2016 01:56 PM | Report Abuse
I have invested some RM130k in Public Mutual using EPF over the past 10 years with current value at RM205k. Returns 75% for the period. It all depends on what funds you have invested.


You are one of the lucky ones investing in unit trust. However, your return in CAGR is only 4.7%, way below EPF.

So if you withdraw EPF and invest in it, then you become the unlucky one as the performance is substantially below EPF return.

Posted by smalltimer > 2016-09-14 14:24 | Report Abuse

205k-130k=75k/10yrs=7.5k a yr/130k=5.8%

Posted by Abismail > 2016-09-14 14:29 | Report Abuse

http://m.free-online-calculator-use.com/cagr-calculator.html

Use this link to calculate cagr

Posted by smalltimer > 2016-09-14 14:31 | Report Abuse

My experience with unit trust is this:
1. i use to DCA amb unit trust for 5 years; then sometime in late 1990's my units grow from 1000 to 3000 plus. However, by the time i need the money in late 90's it was consolidated to 0.30 each. So after 10 years, i get back my capital.
2. I invested in pru guaranted capital for 5 years. I get dividend for 3 yrs totaling 6% but 2 years without dividend. I finally withdraw upon maturity my capital...gain only 2%.
3. I try again with HLG. After getting div. only for 2 years...i think 5%, the principal depreciation by 20%. I sold at a loss. And the staff did tell me that the whole team was kicked out.
4. Last year i purchase eastspring...after 1 yr the div, after receiving 2 dividends, i still cannot cover my fees. I switched.
That's my sad story.

Posted by PlsGiveBonus > 2016-09-14 14:41 | Report Abuse

130k put in epf assume 6.5% return
Become 244,027.87 in 10 years
Not bad
Pub mutual only give you 205k
39k short of epf

Posted by PlsGiveBonus > 2016-09-14 14:45 | Report Abuse

:(
Pub mutual took the 39k for grant

Posted by rojakmee > 2016-09-14 14:50 | Report Abuse

EPF give better return or you can invest yourselves with good dividend paying stock, never with unit trust . They are just a bunch of liar

Posted by TeddyRiley > 2016-09-14 14:54 | Report Abuse

stocks & bonds are artificially driven by central banks & hedge fund managers. time to dump stocks & bonds for phyical gold. outlook for fed hike (also ECB & BOJ) is gloomy and the worst has yet to begin. the 555 trillion debt bubble will implode and that's the end of fiat currency.

Posted by PlsGiveBonus > 2016-09-14 17:38 | Report Abuse

Ytl give 7% dividend
Buy!

Posted by calvintaneng > 2016-09-14 17:40 | Report Abuse

Posted by PlsGiveBonus > Sep 14, 2016 05:38 PM | Report Abuse

Ytl give 7% dividend
Buy!

Yes, YTL & YTL POWER Both Good!

But the surprise will be from OPCOM! Someday, sometime opcom going to announce a surprise dividend!

Posted by PlsGiveBonus > 2016-09-14 17:41 | Report Abuse

I will only agreed with your Ytl call
The rest is but joke
:(

Posted by PlsGiveBonus > 2016-09-14 17:43 | Report Abuse

Pub mutual take your money to buy Ytl and give you 4.5% cagr.

Posted by calvintaneng > 2016-09-14 17:43 | Report Abuse

Posted by PlsGiveBonus > Sep 14, 2016 05:41 PM | Report Abuse

I will only agreed with your Ytl call
The rest is but joke
:(

Haha!

Today is 14th Sept 2016

Calvin stated Opcom will give a surprise dividend some day!

Just mark these words & SEE.

Yes or no ONLY TIME IS OUR WITNESS

Posted by PlsGiveBonus > 2016-09-14 17:46 | Report Abuse

Another penny stock that will never get up like corpse
:(

Posted by Johnnys > 2016-09-14 18:15 | Report Abuse

pb mutual is worst, PRS 3year return is 0%!!!!! PSF 3 years return is 4% only.. niasin

Posted by Johnnys > 2016-09-14 18:16 | Report Abuse

4% is total return in 3 year no cagr

Posted by smalltimer > 2016-09-15 10:23 | Report Abuse

PRS return can be as high as 18% if 3k deduction from your income tax :)

Posted by nuby > 2016-09-19 16:28 | Report Abuse

kenanga and eastpring have a few good fund..

Posted by Ezra_Investor > 2016-10-14 17:46 | Report Abuse

Hi Kc, I've never invested in any mutual funds before. I've mostly invested in the market by myself using the wisdom and knowledge from Graham and Doddsville.

But I would like to recommend mutual funds to a friend that wishes to invest but do not have the time and knowledge to do so.
Do you mind to share your experience with me how do much they charge (Registration fee, annually, commission, etc)?

Thank you in advance.

Posted by stockraider > 2016-10-14 17:53 | Report Abuse

Raider advice u to invest in unit trust only when u have a tax advantage, like the Private Retirement Funds where u can get a tax deduction of Rm 3000 per year.

At least u r already make a gain by getting using the tax deduction.

REMEMBER U R ENTITLE RM 3,000 DEDUCTION IF U INVEST INTO A PRIVATE RETIREMENT SCHEME EVERY YEAR....!!

Posted by kcchongnz > 2016-10-14 21:19 | Report Abuse

Ezra,

I talked a little bit about the costs of investing in unit trust here

http://klse.i3investor.com/blogs/kcchongnz/45121.jsp

Try going through Fundsupermart, it is much cheaper. Goggle it.

Posted by paperplane2016 > 2016-10-14 21:46 | Report Abuse

The mgt fees alone cost you how much? Got guarantee profit noy

Posted by Ezra_Investor > 2016-10-15 16:03 | Report Abuse

Thanks KC and Raider for the input.

Posted by ktsk88 > 2017-05-20 12:54 | Report Abuse

units trust are suitable for those that don't have the time and expertise to parked their funds.

i don't invest into these or other schemes, i manage my own investment in gold,
stocks and banking saving products and insurance investment plus protection products.