I started investing in leading unit trust -public mutual 1.5 years back with minimum RM1500 and today it is making about extra RM500 as of today’s date.. not bad. If i have put in FD i would have been getting Xtra $94.25 , so my decision was good. I just want to let it be there and grew…
This Year i wanted to something worthful in my life, somethin which i dare not think about..FINANCIAL ..yes, So I decided to be Insurance Agent. After giving thought, weighting the pros and cons.. I felt Malaysia had been mushroomed enough of Insurance Agent . So I started to decide.. TING..gotcha, I decided to be a Unit Trust Consultant.
Emm it is not easy..I need fork out RM247 +Rm15 to be one + a tough Exam + a CUTE class + revise thick book + Calculation… pheewwww…
U know how i studied, one day before the exam.. i went through the Mock exam and i FAILED miserably..tension giler.. I sat and study again.
The next day was exam + Valentine day. My bf was very well known for his kind heart so he dropped me at the Center in PJ, informatics SS2. Damn looking for the Center is very challenging. We spend 1 hour looking for the place and it is just right infront of us. We missed it because it doesn;t have any signage.. Can You believe that Informatics center without signage/board.
Sat for the exam in Prometric stlye..Single click and your result is there !! Yes I passed the exam successfully however i was waiting for results from FMUTM ( Federation of Unit Trust Malaysia).
In my upcoming blogs i will be including alot of information on Investment and how do we maximise our wealth in better ways.
Saturday, July 14, 2007
What to watch out when Investing in Unit Trust
Some Basic guidelines when you have decided to Invest.
Im a investor and also Unit Trust Consultant so my advise would be following :-
1. Which company we’re investing ?2. Which fund you will be selecting, look at the service charge.3. What is NAV and buying price for each unit.4. Is there any Dividen declared after financial year?5. Is the Fund Manager’s conservative ?6. What are the services provided by the Unit trust consultant?7. What are the ways to mitigate risk involved ?
8. How is the other fund performance ? Look at the quaterly fund review. Compare the returns with FD/Inflation rate & KWSP.
Important : Assess your risk profile & identify them accordingly.
Secondly what is your objective for investment , why you need to invest ? Is it for old age, for children education, to buy house or etc. One need to identify the risk profile accordingly. When there is some profit making , decide what need to do ? You might want to lock the profits to secure the investment.
Im a investor and also Unit Trust Consultant so my advise would be following :-
1. Which company we’re investing ?2. Which fund you will be selecting, look at the service charge.3. What is NAV and buying price for each unit.4. Is there any Dividen declared after financial year?5. Is the Fund Manager’s conservative ?6. What are the services provided by the Unit trust consultant?7. What are the ways to mitigate risk involved ?
8. How is the other fund performance ? Look at the quaterly fund review. Compare the returns with FD/Inflation rate & KWSP.
Important : Assess your risk profile & identify them accordingly.
Secondly what is your objective for investment , why you need to invest ? Is it for old age, for children education, to buy house or etc. One need to identify the risk profile accordingly. When there is some profit making , decide what need to do ? You might want to lock the profits to secure the investment.
Why must you invest in Unit trust ?
Why Must you invest in Unit Trust ?
1. Diversification - Diversify the way you manage your $.
2. Dollar Cost Averaging - buy the units at average price to make more profit.
3. Liquidity
4. Capital Appreciation/growth - E.g During buying Each unit cost 0.05 cents 3 years later the same unit cost 0.10 cents , so the price per unit appreciated by 0.05 cents.
If you bought 4000 units for RM1000 (selling price @ 0.25cents) , capital appreciation of 0.05 cents will result selling price to 0.30cents.
4000units x 0.30 cents = $ 1,200 .
Conclusion : You made profit RM200
1. Diversification - Diversify the way you manage your $.
2. Dollar Cost Averaging - buy the units at average price to make more profit.
3. Liquidity
4. Capital Appreciation/growth - E.g During buying Each unit cost 0.05 cents 3 years later the same unit cost 0.10 cents , so the price per unit appreciated by 0.05 cents.
If you bought 4000 units for RM1000 (selling price @ 0.25cents) , capital appreciation of 0.05 cents will result selling price to 0.30cents.
4000units x 0.30 cents = $ 1,200 .
Conclusion : You made profit RM200
Good sign…Will it sustain ?
Ringgit hits nine-year high against dollar
March 22 2007
THE ringgit rose to its highest level in nine years against the US dollar yesterday, with dealers saying comments made by Prime Minister Datuk Seri Abdullah Ahmad Badawi helped push the currency to close at RM3.4730/3760 against the greenback.In an interview with Reuters and CNBC, Abdullah said the Government prefers a stronger currency.Dealers said Abdullah’s comment was an indication that the Government would not resort to intervention in the foreign exchange (forex) market just to keep exports competitive.Across Asia yesterday, currencies appreciated against the dollar, which dealers said also declined following reports that the Bank of China would stop amassing forex reserves.Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz told reporters yesterday that as the economy continues with its present growth trend, appreciation of the currency is expected.
Taken from Btimes.com.my
March 22 2007
THE ringgit rose to its highest level in nine years against the US dollar yesterday, with dealers saying comments made by Prime Minister Datuk Seri Abdullah Ahmad Badawi helped push the currency to close at RM3.4730/3760 against the greenback.In an interview with Reuters and CNBC, Abdullah said the Government prefers a stronger currency.Dealers said Abdullah’s comment was an indication that the Government would not resort to intervention in the foreign exchange (forex) market just to keep exports competitive.Across Asia yesterday, currencies appreciated against the dollar, which dealers said also declined following reports that the Bank of China would stop amassing forex reserves.Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz told reporters yesterday that as the economy continues with its present growth trend, appreciation of the currency is expected.
Taken from Btimes.com.my
Friday, May 11, 2007
EPF Investment
In EPF we have 2 accounts, Account1 & 2. The contribution goes in like this 70% to account 1 and 30% to account 2. Account1 is always for retirement and invesment whilst account2 for House, medical, computer..etc..etc.
Approach someone who is in the age range of 34-35 might have a fat EPF. Now what is lewithdrawal amount for their investment ?
E.g if they have 100K both in account 1 & 2, which means 70K in Acct1 and 30K in acct2.
They can't touch 50K in account1, but they can withdraw remaining 20% from 20K. You don;t get it. See the calculation below :-
70K-50K =20K
20K x 20% = $4K.
So they can invest 4K for a start. The calculation goes on.
Explain on Dollar Cost averaging and they can top-up every 3 months.
Now how much they can top-up after 3 months ?
20K -4K = 16K
Take 20% from 16K for next top up.
Calculation goes like this
16K x 20% = $3200.
So the next top up will be $3,200. But remember in the 3 months their EPF contribution continues !! So the amount might be slightly higher.
Approach someone who is in the age range of 34-35 might have a fat EPF. Now what is lewithdrawal amount for their investment ?
E.g if they have 100K both in account 1 & 2, which means 70K in Acct1 and 30K in acct2.
They can't touch 50K in account1, but they can withdraw remaining 20% from 20K. You don;t get it. See the calculation below :-
70K-50K =20K
20K x 20% = $4K.
So they can invest 4K for a start. The calculation goes on.
Explain on Dollar Cost averaging and they can top-up every 3 months.
Now how much they can top-up after 3 months ?
20K -4K = 16K
Take 20% from 16K for next top up.
Calculation goes like this
16K x 20% = $3200.
So the next top up will be $3,200. But remember in the 3 months their EPF contribution continues !! So the amount might be slightly higher.
Thursday, March 29, 2007
Understanding Unit Trust
I saw the Q4 NAV/Units is reduced from Q3 what does this mean ?
This could mean a few things:-
i) There has been a lot of Repurchase done in Q4
ii) There has been a lot of Switching done in Q4 to Bonds due to the profit taking
Units & NAV will differ on a daily basis due to the above.
2. What is exactly KL composite Index?
KLCI or Kuala Lumpur Composite Index is a performance benchmark for the Malaysian Equity Market.
Index Components
Objectives of The KLCI
a. To provide a performance benchmark for the Malaysian equity market;
b. To reflect performance of listed companies that are representative of the major sectors as in
the Malaysian economy;
c. To reflect the growth and development in Malaysian corporate and economic sector.
KLCI Index Rules
a. Companies whose market capitalisation fall within the first two quartiles of the Main Board
companies' market capitalisation will be considered for inclusion;
b. Companies whose annual volume fall within the first three quartiles of the Main Board
companies' volume will be considered for inclusion;
c. Companies which are more than 50% owned by any KLCI constituent and which in fact are
defined as subsidiaries by Malaysian Companies Act are excluded;
d. The market capitalisation weighting of each sector within the KLCI shall not exceed 125% of
the Main Board's sectoral weight to avoid over-representation of a particular sector;
e. Affected companies pursuant to PN4, PN10, PN16 or PN17 are not eligible for inclusion. Index
constituents so designated will be excluded;
f. Index constituents with two consecutive years of losses will be excluded even though they
meet other index rules;
g. Index constituents suspended for more than 3 calendar months will be excluded and are only
eligible for inclusion after 6 calendar months from the date of suspension uplifted;
h. Newly-listed companies will only be considered for inclusion after a minimum period of three
(3) months from the date of listing. Newly listed companies in new industries may be
considered for inclusion after a minimum period of one (1) month from the date of listing;
i. In the event where the market capitalisation of companies to be included or excluded exceed
5% of the market capitalisation of the KLCI, the proposed index constituent changes will be
carried out on a staggered basis. If a single constituent's market capitalisation exceeds the 5%
rule, only that constituent will be included or excluded at any one effective date.
Kuala Lumpur Composite Index (KLCI) [as at 26 February 2007]
Base year
1977
Calculation mode
Weighted by market capitalisation
Index
Current aggregate Market Capitalisation x 100 Base Aggregate Market Capitalisation
To see the list of companies, click:-
http://www.klse.com.my/website/bm/market_information/index_components.html
3. What is projected analysis for xyz Fund? How much is it going to make in next 5 years?
In Unit Trust we do not have any projected analysis and we will not be able to predict what is the result of the future. However we use the past performance as the basis. Basically we can make benchmark using some other funds.
4. Is it compulsory a Divident is paid out to every investor.. i know that it is Incidental and it depends on the fund manager to declare dividen every end of financial year ?
It depends on the fund objective. Most of the Dividend Funds will declare dividend at the end of the financial year. When it’s said Incidental, it’s up to the Fund manager to declare. So in Unit Trust, it’s up to the Fund Objective and if incidental up to the fund manager to declare the dividend.
5. After 5 years and investor is making money, is it possible for the investor to withdraw partial of the profits they are making.
Investor can take out any amount of money at any point of time whether they’re making profits or a loss.
6. What is Distribution yields ?
Distribution Yield is actually the percentage of distributions declared. The formula is as follows:-
Distribution Sen / Average Selling Price#
#Average Selling Price = sum of all the selling prices in the financial year / no of trading days.
Distribution Yield is not a good tool for measurement due to the above formula. The prices fluctuate on a daily basis, thus it does not give the accurate picture when we use this to compare with FD or EPF Dividend Yields.
7. Some investment guarantees the capital that is invested with them, does this same approach undertaken by other Unit Trust company as well ? Is the investor's capital is guaranteed after certain years of investment..
Basically, none of our funds guarantee the Capital. Lately some of the local and International Fund Managers have come up with this sort of funds. However we have to see the fine print in order to understand the concept of capital guaranteed. These Capital Guaranteed funds will require you to invest for a minimum of 5 years, where you are not allowed to withdraw any amount during this period. There will be an exit fees charged if withdrawn prematurely (before 5 years). The exit fees, normally will be reducing in nature as the years invested are increases, e.g. 1st year – 5%, 2nd Year – 4%, 3rd Year – 3% etc.
It is all depends on marketings technic to sell their product.
This could mean a few things:-
i) There has been a lot of Repurchase done in Q4
ii) There has been a lot of Switching done in Q4 to Bonds due to the profit taking
Units & NAV will differ on a daily basis due to the above.
2. What is exactly KL composite Index?
KLCI or Kuala Lumpur Composite Index is a performance benchmark for the Malaysian Equity Market.
Index Components
Objectives of The KLCI
a. To provide a performance benchmark for the Malaysian equity market;
b. To reflect performance of listed companies that are representative of the major sectors as in
the Malaysian economy;
c. To reflect the growth and development in Malaysian corporate and economic sector.
KLCI Index Rules
a. Companies whose market capitalisation fall within the first two quartiles of the Main Board
companies' market capitalisation will be considered for inclusion;
b. Companies whose annual volume fall within the first three quartiles of the Main Board
companies' volume will be considered for inclusion;
c. Companies which are more than 50% owned by any KLCI constituent and which in fact are
defined as subsidiaries by Malaysian Companies Act are excluded;
d. The market capitalisation weighting of each sector within the KLCI shall not exceed 125% of
the Main Board's sectoral weight to avoid over-representation of a particular sector;
e. Affected companies pursuant to PN4, PN10, PN16 or PN17 are not eligible for inclusion. Index
constituents so designated will be excluded;
f. Index constituents with two consecutive years of losses will be excluded even though they
meet other index rules;
g. Index constituents suspended for more than 3 calendar months will be excluded and are only
eligible for inclusion after 6 calendar months from the date of suspension uplifted;
h. Newly-listed companies will only be considered for inclusion after a minimum period of three
(3) months from the date of listing. Newly listed companies in new industries may be
considered for inclusion after a minimum period of one (1) month from the date of listing;
i. In the event where the market capitalisation of companies to be included or excluded exceed
5% of the market capitalisation of the KLCI, the proposed index constituent changes will be
carried out on a staggered basis. If a single constituent's market capitalisation exceeds the 5%
rule, only that constituent will be included or excluded at any one effective date.
Kuala Lumpur Composite Index (KLCI) [as at 26 February 2007]
Base year
1977
Calculation mode
Weighted by market capitalisation
Index
Current aggregate Market Capitalisation x 100 Base Aggregate Market Capitalisation
To see the list of companies, click:-
http://www.klse.com.my/website/bm/market_information/index_components.html
3. What is projected analysis for xyz Fund? How much is it going to make in next 5 years?
In Unit Trust we do not have any projected analysis and we will not be able to predict what is the result of the future. However we use the past performance as the basis. Basically we can make benchmark using some other funds.
4. Is it compulsory a Divident is paid out to every investor.. i know that it is Incidental and it depends on the fund manager to declare dividen every end of financial year ?
It depends on the fund objective. Most of the Dividend Funds will declare dividend at the end of the financial year. When it’s said Incidental, it’s up to the Fund manager to declare. So in Unit Trust, it’s up to the Fund Objective and if incidental up to the fund manager to declare the dividend.
5. After 5 years and investor is making money, is it possible for the investor to withdraw partial of the profits they are making.
Investor can take out any amount of money at any point of time whether they’re making profits or a loss.
6. What is Distribution yields ?
Distribution Yield is actually the percentage of distributions declared. The formula is as follows:-
Distribution Sen / Average Selling Price#
#Average Selling Price = sum of all the selling prices in the financial year / no of trading days.
Distribution Yield is not a good tool for measurement due to the above formula. The prices fluctuate on a daily basis, thus it does not give the accurate picture when we use this to compare with FD or EPF Dividend Yields.
7. Some investment guarantees the capital that is invested with them, does this same approach undertaken by other Unit Trust company as well ? Is the investor's capital is guaranteed after certain years of investment..
Basically, none of our funds guarantee the Capital. Lately some of the local and International Fund Managers have come up with this sort of funds. However we have to see the fine print in order to understand the concept of capital guaranteed. These Capital Guaranteed funds will require you to invest for a minimum of 5 years, where you are not allowed to withdraw any amount during this period. There will be an exit fees charged if withdrawn prematurely (before 5 years). The exit fees, normally will be reducing in nature as the years invested are increases, e.g. 1st year – 5%, 2nd Year – 4%, 3rd Year – 3% etc.
It is all depends on marketings technic to sell their product.
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