A useful info on investing in Unit Trust!

[starlemon]

Hello, every Recomers members that are interest in this business investment world, Here is a sharing thread that can help u out when u plan to invest in Unit Trust.
Feel free to ask questions about investment in Unit Trust on this thread..

Public Mutual is one of the most successful unit trust companies in Asia. It won the Most Oustanding Islamic Fund Manager at the KL Islamic Finance Forum 2007 late last year. So there is no questions as to why I choose Public Mutual as my unit trust company. :

The first thing you would want to do when you want to open a unit trust investment account is to set a goal for the investment. The goal of investment will determine which type of investment you should choose either low risk, medium risk or high risk/aggressive. The duration of the investment also affects the choice of investment type.



As a Malaysian, i believe in marriage and one day whould like to have a family. But any married man will tell you building a family is not easy....and surely not cheap.



But starting to save up early would help A LOT in one's future plans. And what better way to save up money than to invest in unit trust. It's saving and multiplying money at the same time.

Public mutual has a wide range of Islamic and commercial funds such as Public Savings Fund, Public Ittikal Fund, Public Growth fund and so on. But how do you know which fund is suitable for you?



First we have to make sure what our goals are for the investment, in my case as a preparation to build a family particularly when I get children.



Since I know that I won't be having any children in the near future, at least not in the next 4/5 years or so,


I know that Im looking for a long term fund. I also take into account the level of risk I am willing to take. I consider myself a risk taker and I am willing to take a little more risk to gain more profit.



Once I have my parameters, it is time to look for the suitable fund. The best thing about Public Mutual is their website has a full list of offered funds and their details and probobly what sets it aside from other unit trust companies is that it has a Fund Performance Chart where you can check the value of you fund or the performance history of the fund you are interested to invest in. It is from this chart you can know how much growth the fund has undergone up till now.

[syamil_1]

i wonder whats the best kind of no-load funds offerend in malaysia?

[Destiny_Child]

is investing in public mutual fund considered risky?....isnt saving in amanah saham or fd more safe?

[Al-Bert]

For me, investing in unit trust is like entrusting your hard earned money to those professional to manage your fund and investment. It's not really an investment.

If his plan works, both side would be happy since both would gain profit from it...

If his plan turns out to be failure, you would be the only one who experiences depression, he won't feel really down since what he have lost is just OPM ( other people's money ).

So, learn to invest yourself!

[vseehua]

Is it me, or does this thread sound like an advertisement for Public Mutual?

[Xon]

Is it me, or does this thread sound like an advertisement for Public Mutual?

dont think its you. :confused:

hmmmm.redundant thread? any coming up discussion?

[seeweijie]

Hello, every Recomers members that are interest in this business investment world, Here is a sharing thread that can help u out when u plan to invest in Unit Trust.
Feel free to ask questions about investment in Unit Trust on this thread..

Public Mutual is one of the most successful unit trust companies in Asia. It won the Most Oustanding Islamic Fund Manager at the KL Islamic Finance Forum 2007 late last year. So there is no questions as to why I choose Public Mutual as my unit trust company. :

The first thing you would want to do when you want to open a unit trust investment account is to set a goal for the investment. The goal of investment will determine which type of investment you should choose either low risk, medium risk or high risk/aggressive. The duration of the investment also affects the choice of investment type.




As a Malaysian, i believe in marriage and one day whould like to have a family. But any married man will tell you building a family is not easy....and surely not cheap.



But starting to save up early would help A LOT in one's future plans. And what better way to save up money than to invest in unit trust. It's saving and multiplying money at the same time.

Public mutual has a wide range of Islamic and commercial funds such as Public Savings Fund, Public Ittikal Fund, Public Growth fund and so on. But how do you know which fund is suitable for you?



First we have to make sure what our goals are for the investment, in my case as a preparation to build a family particularly when I get children.



Since I know that I won't be having any children in the near future, at least not in the next 4/5 years or so,


I know that Im looking for a long term fund. I also take into account the level of risk I am willing to take. I consider myself a risk taker and I am willing to take a little more risk to gain more profit.



Once I have my parameters, it is time to look for the suitable fund. The best thing about Public Mutual is their website has a full list of offered funds and their details and probobly what sets it aside from other unit trust companies is that it has a Fund Performance Chart where you can check the value of you fund or the performance history of the fund you are interested to invest in. It is from this chart you can know how much growth the fund has undergone up till now.

I am interested in investing. Do you have the Public Mutual website?

Do you have other unit trust company's information?

How to start the investment?

[lwk88]

go http://www.fmutm.com.my/ , http://www.asnb.com.my/english/index.htm (no tax) ,
www.publicmutual.com.my

[nadia.g]

Ive been thinking of investing in unit trust. Im investing my hard earn money after 6 months of working.


Is it a wise choice? or i shud jus put it in asb?

[nhling]

Ive been thinking of investing in unit trust. Im investing my hard earn money after 6 months of working.


Is it a wise choice? or i shud jus put it in asb?

ASB is so good already what more can you ask for?

There are millions of non Bumi out there who want to put money into ASB but couldn't because of the quota. You have got to understand the good you have.

[nadia.g]

ASB tat gud issit? I stil dun get how ASB works. sob sob

[nhling]

ASB tat gud issit? I stil dun get how ASB works. sob sob

Try to ask around or do your own research on the interest rate given by ASB and other financial institutions. Then compare them (see which one is reliable/riskier) and make calculation which will benefit you in the long run.

[nadia.g]

Yup thanks nways. I jus checked the net, i never knew there was ASB i tot there r only ASN..etc.

Im going to ASNB agent to get further imformation n will compare with other unit trust funds. I really hope ill be slightly loaded after investing in unit trust. hehe lol

[teiya_drumzaddict]

Yup thanks nways. I jus checked the net, i never knew there was ASB i tot there r only ASN..etc.

Im going to ASNB agent to get further imformation n will compare with other unit trust funds. I really hope ill be slightly loaded after investing in unit trust. hehe lol


lol. Yeah u shud. all the best in investing. but ur money will grow after some time which kinda take a while. depends on the yearly revenues. so dun expect to invest say 500 and have 3500 at the end of the year. in the beginning it will increase in pretty small amounts but as you invest more and more in your ASB accounts u'll notice the long term benefits. The more you invest u can see a larger increase. lol. I recommend you to go to CIMB for more infos. :wink

[Leen]

:leen I want to have a say here!

The thing about ASN and other stuff, they give you about 6% dividend annually. For unit trust, you can get any amount of dividend depending on the market and how well the unit trust is going. So in good years, you might even get like 8% and more. So for some people who like risk, they will go for mutual fund hoping to get that 8%.

Also, no matter which one that you choose, to really utilize your money, you should just let it there and let it compound. Compounding is a strong tool if you have not known about that.

One more thing, if you do decide to invest in unit trust, you might be confused with some of the words.

Index Fund means the person will just buy everything within a certain constraint. An example will be going to a supermarket and buy 2 of every brands available and hope that the price of those brands go up.

Aggressive Fund should mean (I suppose) that the investors pick carefully which to buy and which not to buy. And the investors do it OFTEN. It's like going to supermarket and look through all the brands and pick 5 that you think will be the best and stick to them. Tomorrow, you come back and choose another 9 that you think will rise in value the next day. And so on.

Bond works slightly differently from normal unit trust. You can even see that from the price of it. Usually, the fund has price like 0.23425 or 0.435953, but bond always have 1.32945 or 1.0324. It is priced differently and it is the less risky thing to invest in. I can't remember the exact meaning of bond (it's something like the government's debt).

Oh well, I'm not an expert so I really can't offer too much information here. Sorry.

[Smilehoe]

Leen is generally accurate since I aren't too sure about those to make any statement. There certainly are many types of funds, each exposed to different types of risks. Market risks, currency risks and credit risks just to name a few. I can't recall all, but do get a prospectus and go through before deciding which portfolio you intend to invest in. Besides, get some idea about the basics on the transaction rules before approaching your agent so that you wouldn't be in the dark about what he/she says.

Btw, bonds are debts issued by government or corporations as a method to raise fund besides stocks. Bond issuers are the borrowers and bond holders are lenders.

[nhling]

:leen I want to have a say here!
Index Fund means the person will just buy everything within a certain constraint. An example will be going to a supermarket and buy 2 of every brands available and hope that the price of those brands go up.


Do you know any reliable index fund unit in Msia?

[Al-Bert]

For Bond fund, it has lower initial entry fee, lower risk and lower growth potential. It does not directly affected by stock market, but still would be influenced by other factors like bank interest.

For Stock/Equity (aggressive) fund, it has high entry fee, high risk but higher growth potential as well. Like Index tracker fund, stock fund is very likely to be affected by stock market's performance. FYI, several studies have shown that stock fund could usually outperform index fund in term of their growth potential.

To invest in an appropriate trust fund needs skill. One of the skill would be your switching "ability". Switch stock fund to bond fund when market is unstable and full of uncertainties (like now, due to poilitical uncertainty), and switch back from bond fund to equity fund after stock market becomes stable and back to the right track again. ( switching cost isn't much if i'm not mistaken )

[Leen]

Do you know any reliable index fund unit in Msia?

I don't know about that. Probably the Public Mutual ones? :laugh

A lot of economics seem to agree that it doesn't make much difference whether you buy everything or you pick and choose carefully. My econ prof once quoted someone, "I invest not to beat the market, I invest to beat the inflation." haha. Probably you can learn something from that. Very few actually pick and choose correctly. That's why if you don't know what to buy (say stock markets), just throw some darts and buy those that you shot at. Chances are, you are not going to get too far from someone who tries hard to pick and choose carefully. :laugh

[nhling]

For Stock/Equity (aggressive) fund, it has high entry fee, high risk but higher growth potential as well. Like Index tracker fund, stock fund is very likely to be affected by stock market's performance. FYI, several studies have shown that stock fund could usually outperform index fund in term of their growth potential.


I'm not sure if you have ever come across this book called 'The little book of Common Sense Investing'. This book shows a lot of proof that index fund fetch higher profit in long run compared to other fund ie. mutual fund etc.

The author of the book, John C. Bogle is a founder and former CEO of the Vanguard Mutual Fund Group.

[Al-Bert]

I'm not sure if you have ever come across this book called 'The little book of Common Sense Investing'. This book shows a lot of proof that index fund fetch higher profit in long run compared to other fund ie. mutual fund etc.

The author of the book, John C. Bogle is a founder and former CEO of the Vanguard Mutual Fund Group.

I'm speaking the truth that there were several studies showing that equity funds have actually outperformed index in past time. ( one of the studies: Diversified funds better than index funds? Myth or reality (http://www.rediff.com/getahead/2008/jun/13def.htm) )

However, those studies might not be accurate and true due to the influence of survivorship bias.

Index fund has advantages of its low fee and tax-efficiency characteristics. And it involves lesser complicated process than any other active funds. It is also a kind of passive-managed fund which requires less effort on it. I believe these are the basic reasons why professionals think it could fetch higher profit in long run.

Mind you, index funds only do best during bull market, collapse during bear market! Contrary to index fund, active fund has the flexibility to hold capital, control risk in portfolio and avoid over evaluated stocks in bearish market.

My conclusion: Index fund is generally better than active fund in long run. But a right active fund with great fund manager would certainly earn you even more profit.

[nhling]

I'm speaking the truth that there were several studies showing that equity funds have actually outperformed index in past time. ( one of the studies: Diversified funds better than index funds? Myth or reality (http://www.rediff.com/getahead/2008/jun/13def.htm) )

However, those studies might not be accurate and true due to the influence of survivorship bias.

Index fund has advantages of its low fee and tax-efficiency characteristics. And it involves lesser complicated process than any other active funds. It is also a kind of passive-managed fund which requires less effort on it. I believe these are the basic reasons why professionals think it could fetch higher profit in long run.

Mind you, index funds only do best during bull market, collapse during bear market! Contrary to index fund, active fund has the flexibility to hold capital, control risk in portfolio and avoid over evaluated stocks in bearish market.

My conclusion: Index fund is generally better than active fund in long run. But a right active fund with great fund manager would certainly earn you even more profit.

I get your point. But first you will need a great fund manager to earn you big bucks. Secondly, it will be time and energy consuming as you need to spend a lot of time on constant watch out of the market trend. In order to make profit through active fund, I'm afraid you will need to do your best to beat the market.

There are active funds which do better than index fund indeed but there are also many active funds which went bankrupt.

[Smilehoe]

There are mutual funds which are classified by the fund types that includes both active and index funds. So if you can't afford to monitor your portfolio, leave it to your fund manager. Besides, for most mutual funds, your maximum risk is often your total investment. As long as you don't invest on borrowed money, you shouldn't end up in a debt.

An interesting quote is read somewhere, 'Risk no more than you can afford to lose, and also risk enough so that a win is meaningful. If there is no such amount, don't play', by Ed Seykota

[chenchow]

I would personally suggest that you don't put everything in a basket.

Some of the suggestions of sequence of investment could be:-
1. Index fund first. This would allow you to go up and down together with the general main stocks in the stock market. You would in fact do a little poorer than the average market, due to the management fee and the low front load.

2. Then, once you have more. You can put into more equity fund (I'm assuming you are young and able to take some risk). For equity fund, you can put into some dividend fund (blue chips or major companies that often pay dividend), growth fund (small market capitalization or certain sector fund), fund from other countries (ASEAN, Asia, Global, Europe, BRIC (Brazil Russia India China) etc).

3. Then you can do asset allocation to other types of fund. Bond fund, real estate fund, commodity fund etc.

4. And for each type, you can invest based on location etc, as mentioned in no. 2.

[Al-Bert]

Chenchow is absolutely correct! Diversification is important. You know, sometimes bad thing happens!

I get your point. But first you will need a great fund manager to earn you big bucks. Secondly, it will be time and energy consuming as you need to spend a lot of time on constant watch out of the market trend. In order to make profit through active fund, I'm afraid you will need to do your best to beat the market.

Ya, like what Smilehoe have mentioned, you leave it to fund manager in managing your active fund like watching market trend (It's their duty). You just have to spend time in dealing with taxes and fees.

That's why if you don't know what to buy (say stock markets), just throw some darts and buy those that you shot at. Chances are you are not going to get too far from someone who tries hard to pick and choose carefully.

Are you sure? You made the investment in stock market sounds like a kind of gambling (last time I lost hell lots virtual money in Bursa Pursuit because I used this kind of random stock pick?s technique). I think that if you really want to make real profit out of stock market, you would need to do some homework. It would be advisable to carry out fundamental analysis (study of true value of stock) or/and technical analysis (study of past stock data, trend and volume) before entering stock market.

[vseehua]

Funny...

People talk about diversification here in this thread but in the end everything is to be trown into the stock market.

[Al-Bert]

Well, people talked about unit trust here... and since global stock market could somehow bring some impacts to the performance of the funds of unit trust, so i guess a little or some discussions involving stock market would be inevitable in this thread!

[mybizforum]

hi..
people who invest in unit trust must understand that its a long term investment...cannot get heart attack each time market crash a bit..

if already crash a bit..get scared..then better dont invest in unit trust.

also..when it comes to investing..u must also see whether ur agent is just desperate to close sale or really trying to ensure u get the best of ur investment..

just some tips for u guys.

:wink

http://investpublicmutual.blogspot.com

[thesoothsayer]

One thing I've noticed is that most unit trusts tend to trend according to the stock market, regardless of what type of stocks they say are investing in.

So, one pertinent question to ask yourself is this: "How long am I willing/able to hold versus the current investment climate?"

If I feel that the bear will be around for a few years and this is just the start of the downtrend, I ask myself this: "If I buy now and invest monthly, how long will I need to actually break even (wait for the market to go on an uptrend again) and if I will need to use the money between then and now?" If I need to sell before my investment can break even, then investing now would just be like giving my money away.

I would suggest prospective investors learn more about the stock market before investing in unit trusts unless they have tonnes of spare dough lying around that won't be missed for a few years. ;)

Timing your buy and sells can be critical, even for unit trusts. Of course, no one can time the market to perfection (buy low, sell high) but it would be useful for any prospective investor to learn as much as possible before investing.

[Caprio]

There are many better investment vehicles. Unit trust is not a wise choice if you are an investor in Malaysia. There are many hidden charges involved. It is good for you to consult your broker regarding this issue.:)

[Leen]

^

6 percent charges for all kinds of thing.

It is kind of ridiculous but Public Mutual just came up with this new fund that is capital protected and is going to be investing in gas, oil, and gold. I believe people should know by now that crude oil price is going down. Those who get trapped by the ads and purchase the fund will find themselves either a) sell the units before 3 years and realize their losses or b)wait for 3 years and gain back their original investment minus the 6% charge and 3.3% interest for 3 years from putting it in FD or c)wait and wait and wait until the price goes up.

Of course, c doesn't look too possible at this moment from my point of view (which might be wrong).