Author Topic: Have you ever wondered how your Malaysian mutual funds performed?  (Read 15677 times)

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
If 15% is the annual target, then might as well just leave our money to the mutual funds.
Why need to be so actively involved ourselves?


What is the average annual return from the stock market over the long run?
.. and we know the majority of mutual funds will deliver less than this market return (underperform).

 :(
Please refresh and revise your CFA notes regularly.   :) :P




How are the performances of the Malaysian mutual funds?
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #1 on: December 19, 2011, 06:27:27 PM »
Performance of unit trusts in Malaysia as at Dec 13, 2011

Average YTD performance

Malaysia Equity -2.6%
Malaysia Equity - Index -1.21%
Malaysia Equity - Smallcap  -7.1%
Malaysia Flexible Asset Allocation  -2.74%
Malaysia Mixed Assets  -3.93%
Malaysia Bond  5.28%
Malaysia Money Market 2.71%
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #2 on: December 19, 2011, 06:34:18 PM »
Performance of unit trusts in Malaysia as at Dec 13, 2011

5 Year Performance
Annual Return


Malaysia Equity 8.63%
Malaysia Equity - Index 8.36%
Malaysia Equity - Smallcap  8.19%
Malaysia Flexible Asset Allocation 3.83% (underperform)
Malaysia Mixed Assets  4.25%   (underperform)
Malaysia Bond  3.92%
Malaysia Money Market   2.97%
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Offline renn_zhe

  • Companion of Honour
  • ***
  • Posts: 749
  • ...and now we play the waiting game.
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #3 on: December 19, 2011, 07:34:34 PM »
Very strange to see investors queuing like sheep to buy MF?  :)
The oxen are slow, but the earth is patient.

Offline D ' LADY

  • Viscount
  • ******
  • Posts: 9,627
  • me still BUAHHATI
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #4 on: December 19, 2011, 08:02:04 PM »
ASB ...8.8 % ....0.05 % more than last year .... :speechless:
old :
DLADY
FN
NESTLE
PADINI
CBIP
PPB

Offline ginkobiloba

  • Viscount
  • ******
  • Posts: 5,172
  • You and me, we are one happy investlah family..
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #5 on: December 19, 2011, 08:29:41 PM »
Study jgn x study.. Nanti fail lagi.. Terus broken hearted..  :D :D 8)
God gave you a brain. Use it wisely to swing trade. Kekeke

Offline KLSE LOSSER

  • Baronet
  • ****
  • Posts: 2,005
  • Wat to do tis year.
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #6 on: December 19, 2011, 08:34:30 PM »
Public regular saving fund - 5 years annualised return = 11%
Public balanced fund  -  5 years annualised return = 7%
Public bond fund - 5 years  annualised return = 6%

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #7 on: December 19, 2011, 09:24:02 PM »

Performance of unit trusts in Malaysia as at Dec 13, 2011

Average YTD performance

Malaysia Equity -2.6%  Range  +16.51% to -19.51%
Malaysia Equity - Index -1.21%  Range  -0.2% to -2.3%
Malaysia Equity - Smallcap  -7.1%   Range  +2.72% to -18.98%
Malaysia Flexible Asset Allocation  -2.74%  Range  +7.5% to - 11%
Malaysia Mixed Assets  -3.93%   Range  +6.1% to -7.03%
Malaysia Bond  5.28%   Range  +12.04% to +0.25%
Malaysia Money Market 2.71%   Range +3.1% to +1.24%
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #8 on: December 19, 2011, 09:31:06 PM »

Performance of unit trusts in Malaysia as at Dec 13, 2011

5 Year Performance
Annual Return


Malaysia Equity 8.63%   
Range  +17.99 to -1.37%

Malaysia Equity - Index 8.36%   
Range  +9.46% to +6.36%

Malaysia Equity - Smallcap  8.19% 
Range  +15.43%  to +1.27%

Malaysia Flexible Asset Allocation 3.83% 
Range  +8.62% to +1.17%

Malaysia Mixed Assets  4.25%   
Range  +11.93% to -0.92%

Malaysia Bond  3.92%   
Range +9.51% to -3.06%

Malaysia Money Market   2.97%   
Range  +4.82% to + 1.81%
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your PUBLIC BANK mutual funds performed?
« Reply #9 on: December 19, 2011, 10:04:41 PM »


Public Aggressive Growth  8.89% :thumbsup:
Public Dividend Select   11.07% :thumbsup:
Public Equity  8.14%
Public Focus Select  10.75% :thumbsup:
Public Growth  9.42% :thumbsup:
Public Industry 6.26%
Public Optimal Growth  -
Public Regular Savings 10.9% :thumbsup:
Public Savings  9.39% :thumbsup:
Public Sector Select  -
Public Select Alpha 30 -

Range  +11.07%  to  6,26%   :thumbsup:
Malaysia Equity Funds Average 8.63%


Public Index  7.94%
Malaysia Equity - Index  Average  8.36%


Public Smallcap  15.34% :thumbsup:
Malaysia Equity - Smallcap  Average  8.19%


Public Balanced  5.77% :thumbsup:
Malaysia Mixed Assets  Average  4.25%



PB Bond   -
PB Fixed Income   6.04% :thumbsup:
PB Infrastructure Bond  -
Public Bond   6,08% :thumbsup:
Public Enhanced Bond    5.1% :thumbsup:
Public Select Bond    4.51% :thumbsup:
***** Strategic Bond  -

Range  6.08%  to 4.51% :thumbsup:
Malaysia Bond  Average  3.92%



Public Money Market  2.71%
Malaysia Money Market Average   2.97%


Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your PUBLIC BANK mutual funds performed?
« Reply #10 on: December 19, 2011, 10:06:34 PM »
Performance of unit trusts in Malaysia as at Dec 13, 2011

5 Year Performance
Annual Return



Public Aggressive Growth  8.89% :thumbsup:
Public Dividend Select   11.07% :thumbsup:
Public Equity  8.14%
Public Focus Select  10.75% :thumbsup:
Public Growth  9.42% :thumbsup:
Public Industry 6.26%
Public Optimal Growth  -
Public Regular Savings 10.9% :thumbsup:
Public Savings  9.39% :thumbsup:
Public Sector Select  -
Public Select Alpha 30 -

Range  +11.07%  to  6,26%   :thumbsup:
Malaysia Equity Funds Average 8.63%


Public Index  7.94%
Malaysia Equity - Index  Average  8.36%


Public Smallcap  15.34% :thumbsup:
Malaysia Equity - Smallcap  Average  8.19%


Public Balanced  5.77% :thumbsup:
Malaysia Mixed Assets  Average  4.25%



PB Bond   -
PB Fixed Income   6.04% :thumbsup:
PB Infrastructure Bond  -
Public Bond   6,08% :thumbsup:
Public Enhanced Bond    5.1% :thumbsup:
Public Select Bond    4.51% :thumbsup:
***** Strategic Bond  -

Range  6.08%  to 4.51% :thumbsup:
Malaysia Bond  Average  3.92%



Public Money Market  2.71%
Malaysia Money Market Average   2.97%



Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #11 on: December 19, 2011, 10:39:13 PM »
For those who are investing into mutual funds ..

It looks like the Public Bank mutual funds did offer consistent above average (based on the benchmark) performances.  

For those aiming for higher returns (capital appreciation + dividends) of > 15% per year for many years, it is possible too, provided you have the ability to do your own investing or to seek out the good managers.

Generally, the mutual funds return is determined by the overall market return over the long term.  The short term return, as expected, is very volatile.  
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online king

  • King
  • ***********
  • Posts: 76,819
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #12 on: December 20, 2011, 05:41:22 AM »
WHETHER THEY PERFORM OR NOT, THE MANAGERS OF MUTUAL FUNDS HAVE THE FIRST MUTUAL FUN ON UR INVESTMENT. 

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #13 on: December 20, 2011, 06:31:26 AM »
WHETHER THEY PERFORM OR NOT, THE MANAGERS OF MUTUAL FUNDS HAVE THE FIRST MUTUAL FUN ON UR INVESTMENT. 

Yes, managing mutual funds is a lucrative business.  This delivers a significant contribution to the non-interest income of Public Bank. 
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #14 on: December 20, 2011, 06:55:01 AM »
Performance of unit trusts in Malaysia as at Dec 13, 2011

5 Year Performance
Annual Return


Malaysia Equity 8.63%
Malaysia Equity - Index 8.36%
Malaysia Equity - Smallcap  8.19%
Malaysia Flexible Asset Allocation 3.83% (underperform)
Malaysia Mixed Assets  4.25%   (underperform)
Malaysia Bond  3.92%
Malaysia Money Market   2.97%
Performance of unit trusts in Malaysia as at Dec 13, 2011

Average YTD performance

Malaysia Equity -2.6%
Malaysia Equity - Index -1.21%
Malaysia Equity - Smallcap  -7.1%
Malaysia Flexible Asset Allocation  -2.74%
Malaysia Mixed Assets  -3.93%
Malaysia Bond  5.28%
Malaysia Money Market 2.71%


Let us draw some obvious observations:

1.  Long term investment into equity funds beats bond fund and money market funds returns by a wide margin.   The mixed funds (equity + bonds + money market) performances are lower than the equity funds and are not much different from the returns offered by the bond funds.

2.  In the short term, the market can be very volatile.  The equity funds can overperform (as was in 2009) or underperform (as in 2011) the bond funds and money market funds by wide margins.



Conclusion:

To grow your wealth over the long term, seek out the equity funds.   However, you will need to be good and "lucky" to pick the right managers.

For those unwilling to tolerate the high volatility of equity funds, bond funds offer a reasonable return, especially for those seeking income.

Money market funds are for the short term.  Over a long period, the returns are unlikely to keep pace with inflation, resulting in negative real return on your capital.


In 2008, how were the funds advising their investors on where to put their money?  What did the majority or the average investors doing with their money?  Did these advice or did their action enhance or harm their portfolio returns?
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #15 on: December 20, 2011, 07:13:53 AM »
ASB ...8.8 % ....0.05 % more than last year .... :speechless:

The 1 Year Performance of ASB last year was 8.75%.  Its 5 Years Performance Annual Return has also been excellent, exceeding the average of the equity funds.


Special funds
5 Year Performance
Annual Return


Amanah Saham 1 Malaysia   -
Amanah Saham Bumiputera  8.72%
Amanah Saham Didik  6.63%
Amanah Saham Kedah  1.97%
Amanah Saham Kesihatan  6.11%
Amanah Saham Malaysia  6.7%
Amanah Saham Nasional  8.23%
Amanah Saham Nasional 2   8.85%
Amanah Saham Nasional 3    7.27%
Amanah Saham Pendidikan    7.67%
Amanah Saham Persaraan   8.18%
Amanah Saham Wawasan  6.83%
ASM KMB Dana Pertumbuhan   3.72%
ASM KMB Kes11   3.4%
ASM TNB   0.3%
PJB: Dana Johor  7.95%
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #16 on: December 20, 2011, 07:29:07 AM »

Amanah Saham Bumiputera (ASB) fund was launched on the 2nd of January 1990. This fund is only eligible to Malaysian Bumiputera. The fund objective is to generate long-term, consistent and competitive returns to the Unitholders whilst ensuring the preservation of capital at minimal risk tolerance level.

ASB is an income equity fund with a fixed price per unit at RM1.00. It is also a capital guarantee fund. The maximum investment for each adult eligible individual is limited to RM200,000. Since launched in 1990, ASB is one of the best performing fund under PNB management.

The table below is the historical dividend rate since the fund was launched in 1990.

Year   Dividend (sen)   Bonus (sen)   Total (sen)
1990   8.00   6.00   14.00
1991   8.50   4.00   12.50
1992   7.50   5.00   12.50
1993   9.00   4.50   13.50
1994   9.50   4.50   14.00
1995   10.00   3.00   13.00
1996   10.25   3.00   13.25
1997   10.25   1.25   11.50
1998   8.00   2.50   10.50
1999   8.50   1.50   10.00
2000   9.75   2.00   11.75
2001   7.00   3.00   10.00
2002   7.00   2.00   9.00
2003   7.25   2.00   9.25
2004   7.25   2.00   9.25
2005   7.25   1.75   9.00
2006   7.30   1.25   8.55
2007   8.00   1.00   9.00
2008   7.00   1.75   8.75
2009   7.30   1.25   8.55
2010   7.50   1.25   8.75
2011   7.65   1.15   8.80
      
http://~.com/dividends/amanah-saham-bumiputera/
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Offline Trade@58

  • Knight
  • **
  • Posts: 328
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #17 on: December 20, 2011, 08:43:28 AM »
I invested in Public Mutual and did make some good returns as I could switch without restrictions on my own online after analysing the trend. But since July 2011, they said can only switch after 90 days from the initial switch, otherwise they will impose a "switchng-fee" of 0.75% on the amount switched. This is DAY-LIGHT ROBBERY and CRAZY!! The reason they gave was: "protecting investors' interest" which I felt was nonsense as I could make more than their returns. I have had since stopped investing in Public Mutual.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #18 on: December 20, 2011, 11:23:36 AM »
Over the years, the size of this industry has grown.
The fastest growing segment is indeed the Malay community.
Their money flowing into mutual funds are showing the highest growth.
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #19 on: December 20, 2011, 12:47:40 PM »
Clearly, it isn't just Public Mutual fund the only one performing, have you done other mutual funds study?

Yes, there are other funds too.
Maybe you can post them here.
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #20 on: December 20, 2011, 01:12:27 PM »
http://www.publicmutual.com.my/application/fund/performancenw.aspx

You can check the performances of the various Public Mutual funds at this site.

for example:

Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #21 on: December 20, 2011, 01:16:35 PM »
Here is the home page of Public Mutual for those who are interested.
http://www.publicmutual.com.my/Home.aspx


Disclaimer: 
I neither work in nor invest in Public Mutual. 
Just exploring this industry to see how it can fit into my long term financial plans.
But I am greedy ... looking for >15% returns per year ... for long term.


Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #22 on: December 20, 2011, 01:33:10 PM »
Public Mutual
Fund Review consist of monthly and quarterly stock market report, economic review and individual fund performance for Public Series of Funds and PB Series of Funds.
http://www.publicmutual.com.my/OurProducts/MonthlyQuarterlyFundReview.aspx

Public Mutual Quarterly Fund Review
http://www.publicmutual.com.my/LinkClick.aspx?fileticket=MPU3kxX0q4Q%3d&tabid=248
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Offline Dorky

  • Earl
  • *******
  • Posts: 12,902
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #23 on: December 20, 2011, 01:39:08 PM »
A case study:

A psychopath claimed he has RM100 million (now very likely to have more after Nestle, Dlady, and a handful of haram counters rallied).
This psychopath targets to achieve 15% return every year.
Assuming he is around 45 years old and he started investing since 20 years old.
And to be conservative, assume he achieved 25% return every year compounded.
How much capital he started investing with at 20 years old?

Answer: Around RM377,800.

Who in his right birthright would amass as much as RM377,800 at just 20 years old?
A rich man's kid?
Buy, sell, up, down, gain, gain.

Online iiinvestsmart

  • Marquess
  • ********
  • Posts: 18,240
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #24 on: December 20, 2011, 01:56:49 PM »

Investing in volatile times    :thumbsup:

When stock markets are volatile, what should unit trust investors do? Should they take
on more risks and ride on the economic and market recovery? This article examines the
issues that investors should look out for.
 
At the peak of the financial crisis in 2008, the FBM KLCI fell from an all-time high of 1,516
points in January 2008 to about 800 points in October 2008. With the index having rebounded
to current levels of 1,361 points as at end July 2010, an investor would have made a handsome
return of almost 70% if he had invested when the market was at its lowest point.   

However, it is impossible to predict the bottom of the crash and therefore timing the market is
virtually impossible for normal investors. With no crystal ball in  hand, the ringgit-cost
averaging method could provide retail investors with reasonable returns as markets recovered.
This is provided that investors have a long-term perspective  and are patient enough to ride
through the marketís ups and downs. 

Ringgit-cost averaging strategy is designed to reduce volatility by investing fixed dollar
amounts at regular intervals, regardless of the marketís direction. Thus, as prices of securities
rise, fewer units are bought, and as prices fall, more units are bought.

Depending on the risk profile and objectives of their funds, professional fund managers may
capitalise on market volatility by bargain-hunting oversold stocks and divesting stocks that
have become overvalued. By doing so, they seek to take advantage of mispricing of assets
during volatile times. Given the  sophistication of these investment strategies, unit trust
investors should focus on a regular investment plan and let the fund managers deal with the
volatility of markets.   

How should unit trust investors respond to volatility?

Past performance of unit trust funds should be evaluated based on returns and volatility.
Investors should try to assess whether a fundsí volatility is caused by market conditions which
affect the performance of similar funds across the board or whether it is caused by the fund
managersí investment decisions to take on more risks.

It is quite clear that the primary reason for equity funds to be volatile in recent years is due to
market volatility in various financial assets.  As mentioned earlier, global stock markets
sustained heavy losses as the US subprime crisis spread across the world in 2008, causing
global financial institutions to write off US$1.7 trillion in debts. Subsequently, equities have
rebounded in 2009 following signs of a recovery in economic activities in response to the fiscal
and monetary stimulus measures undertaken  by governments and central banks around the
world.

The commodity bubble also burst in mid-2008, led by escalating crude oil prices which hit a
high of US$147 per barrel in July 2008 before plunging to US$33 per barrel in December 2008. 
Volatility was also seen in the foreign exchange market as the financial meltdown forced U.S.
investors to withdraw offshore funds to be repatriated back home, causing the US$ to
strengthen in 2008. Subsequently with the recovery in equity markets, the US$ weakened in
2009 as investors were willing to take on more risks.   

With volatility still in the current market, how can investors plan their investments before
putting money into unit trusts?

Volatility is often viewed as negative as it is associated with risk and uncertainty. However,
with a disciplined and consistent approach, investors can position themselves to achieve
potential long-term returns from the market. In general, investors seeking above-average
returns should be prepared to accept higher risks in their investments.

Before investing into a unit trust, investors should evaluate whether a fundís volatility
suits his or her risk appetite. They can start by reading the fund's prospectus and annual
report, and compare its year-to-year performance figures. The figures can tell investors
whether the fund earned most of its returns within a short period or whether its returns were
achieved on a more consistent basis over time. 

For example, over ten years, two funds may have gained 12% per year on average, but they
may have taken drastically different routes to get there. One might have had a few years of
spectacular performance and a few years of low or negative returns, while the performance of
the other may have been much steadier from year to year. 

Fund volatility factor

To assist investors in their fund selection, the Federation of Investment Managers Malaysia
(FIMM), formerly known as the Federation of Malaysian Unit Trust Managers (FMUTM),
introduced the fund volatility factor and fund volatility classification for funds with three years
track record, which is assigned by Lipper. 

While historical performance may not predict future returns, it can tell you how volatile
a fund has been and reflect a fund managerís track record. In using the fund volatility
factor, unit trust investors should keep in mind to compare the volatility of funds against their
annualised returns. In addition, they should evaluate the returns and volatility of funds within
the same peer fund category and not across different categories of funds.   

Apart from the fund managersí investing style, the volatility of unit trusts differs depending on
the assets that the funds are invested in. Commodities and equities are seen as more volatile
compared to bonds and fixed deposits.

For equities, industry and sector factors can cause increased market volatility. For example, in
the plantation sector, a major weather storm in an important plantation area can cause prices of
crude palm oil to jump up. As a result, the price of palm oil-related stocks will rise accordingly.
This increased volatility affects overall markets as well as individual stocks.

There are unit trusts that invest in specific countries or regions such as China, Australia,
Vietnam, and the emerging markets such as BRIC (Brazil, Russia, India and China). These
funds are prone to country risks such as political risk and financial events in the country.
Investors have to be aware of the volatility of foreign stocks and bonds. Regional and
country-specific economic factors, such as tax and interest rate policies, also contribute to the
directional change of the market and thus volatility. 

Investors of a commodity fund would normally look at demand and supply conditions to access
the outlook for the commodity market. In 2008, the rally in commodity prices was partly due to
growing demand from energy-hungry China and other emerging countries. However, a sharp
increase in speculative demand among hedge funds for selected commodities helped to drive
up these commodity prices to record levels that were out of line with their fundamentals. 

Following the financial crisis, hedge funds were scrutinised for their role in the speculation.
Meanwhile, global demand of commodities is expected to increase in line with the economic
recovery but there is no guarantee that the hedge funds will not return and create speculative
demand.   

In response to the financial crisis, central banks around the world have slashed interest rates to
record lows to spur economic growth. However, selected regional central banks had started
raising interest rates in the first half of 2010 to curb potential inflation as economic conditions
improve. 

In conclusion, unit trust investors can apply the ringgit-cost averaging method in a volatile
market environment. This strategy would effectively reduce volatility risks as it does not time
the market. Ringgit-cost averaging is most suitable for long-term investors as it requires
investors to stay invested regardless of the marketís direction. For investors with higher
risk appetite, they would need to understand specific factors that affect volatility in different
asset classes and geographical areas and select their funds accordingly.     
For more information, please contact Public Mutualís Hotline at 03-6207 5000 or visit
www.publicmutual.com.my. 

http://www.publicmutual.com.my/LinkClick.aspx?fileticket=KIgoaupKUnU%3d&tabid=86
Itís better to buy a wonderful company at fair price than a fair company at wonderful price.

1.  Understand the business
2.  Business must have DCA
3.  Management with integrity
4.  Buy at a sensible price

Big Fat Pitch.  Focus Investing.  Long term portfolio for capital appreciation and income.

Offline kok_hwa

  • Knight
  • **
  • Posts: 112
Re: Have you ever wondered how your Malaysian mutual funds performed?
« Reply #25 on: December 07, 2018, 02:41:52 PM »
 :thumbsup: :thumbsup: :clap: