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Do You Invest In Unit Trust ?

I owned some public mutual funds and the prices dropped so badly since the day I put in money. Now the loss is about 5%-8%. Anyway, now is not a good time to invest in UT. The financial professional predicted that the market would continue to go down until 2009. If you feel that it’s the best time to go in then you can make a commitment to invest consistently and wait for the market to reach the up cycle again and you can sell off all your units for a handsome profit.

You should make sure that you do not take unit trust as something to earn money but it’s for saving money. The amount that you plan to invest is not money that you plan to use anytime soon. Anyway, it’s better than you put your money into FD that may be cannot counter the inflation rate.

Unit Trust is different from insurance; you can just sell off unit trust easily and get your cash after deducted transaction fees. However, there are terms and conditions for insurance policy. If you terminate the policy, you will suffer by paying penalty and enjoying low return only unless invested for a certain number of years.

Take note: Investing does not necessarily have to be risky. You need to understand what you are investing in. Understand the rules regarding each type of investments and then make an informed decision. Then investing is not that risky.

PB China Pacific Equity Fund

Public Bank will launch its first China fund, PB China Pacific Equity Fund(PBCPEF) on today which is 23 October 2007. PBCPEF will invest mainly in China stocks and the balance in North Asian markets such as Japan, Korea and Taiwan. The fund will be managed by its wholly-owned subsidiary, Public Mutual.

PBCPEF offers investors the opportunity to tap on the solid growth prospects in China. In the past 5 years, equity markets in this region have enjoyed a sustained uptrend in global economies. China has emerged as a major growth engine for this region apart from the U.S with real Gross Domestic Product (GDP) sustained at a robust pace averaging 9.2% annually.

The China Pacific region which encompasses China, Hong Kong, Taiwan, South Korea and Japan presents significant growth opportunities. The Chinese economy is projected to grow steadily at 11.2% for 2007 and 10.6% for 2008, supported by robust domestic consumption and exports. Driven by strong domestic demand and robust tourist arrivals, Hong Kong’s GDP growth is set to expand at above 5% for 2007/2008. Meanwhile, GDP growth for South Korea and Taiwan is projected at above 4% for 2007/2008 amidst resilient investment spending and global demand for electronic products. In comparison, Japan, being a developed economy, is expected to register moderate GDP growth of about 2% in 2007/2008 on sustained consumption and investmen.

A minimum of 50% and up to a maximum of 98% of the fund’s net asset value (NAV) will be invested in China stocks listed on the China, Hong Kong, United States of America, Singapore and other approved markets. When valuations of China stocks are not compelling, the fund may invest in other North Asian markets which include Japan, Korea and Taiwan. The equity exposure of PBCPEF will generally range from 75% to 90% of its NAV.

PBCPEF is suitable for aggressive investors who can withstand extended periods of market highs and lows to achieve medium to long-term capital growth for their investments.

The issue price / NAV of PBCPEF is at RM0.25 per unit during the 21-day initial offer period of 23 October 2007 to 12 November 2007. During the offer period, a special promotional service charge of 5.45% of NAV per unit is extended to the purchase of units of PBCPEF by investors. Investors who opt for Direct Debit Instruction with PBCPEF during the offer period will also enjoy the special promotional service charge of 5.45% of NAV per unit for as long as the Direct Debit is active. Terms and conditions apply. The minimum initial investment for the fund is RM1,000 and the minimum additional investment is RM100.

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Public Mutual(Old System Vs New System)

There have been quite a few people got confused by the Public Mutual offer for the newly launched funds. Yes the calculation is slightly different now. So which calculation actually benefit the investors more ? The answer is…
*People who get used to previous system can refer to Case B.

Case A:Assume that investor would like to invest RM10k into PFEPRF during offer period excluding service charge which the NAV is RM0.25 and the service charge is 5.45%.

Service charge 5.45% = 0.0545

Total service charge = Effective Investment amount * Service charge
= RM10,000 * 0.0545
= RM545

Total payable amount = Investment amount in PFEPRF + Total service charge incurred
= RM10,000 + RM545
= RM10,545.00

Number of units = Effective Investment amount/NAV per unit
= RM10,000/RM0.25
= 40,000 units

Case B:
Investment RM10k inclusive of initial service charge(5.45%).

Effective investment amount = Total Paid Amount/(1+service charge)
= RM10,000/(1+0.0545)
= RM9483.17

Number of units = Effective investment amount/NAV per unit
= RM9483.17/RM0.25
= 37932.68 units

Effective investment amount = Total NAV
= NAV per unit * Number of units

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Public Mutual Property and Resorts Fund

Public Bank’s wholly owned subsidiary, Public Mutual will be launching two new funds on 10 July 2007, which are
Public Far-East Property & Resorts Fund (PFEPRF) and Public Islamic Select Bond Fund(PISBF).Public Mutual’s Chairman Tan Sri Dato’ Sri Dr. Teh Hong Piow said PFEPRF is an equity fund that seeks to achieve capital growth over the medium- to long-term period by investing in companies that are principally engaged in property investment and development, hotel and resorts development and investment, and real estate investment trusts (REITs) in domestic and regional markets. The fund may also invest in companies, which have at least 70% of their assets comprising property or real estate assets. “Up to 80% of the fund’s net asset value (NAV) can be invested in selected regional markets which include Japan, Australia, Hong Kong, China, Singapore, Taiwan, Philippines, Thailand, New Zealand, Indonesia, South Korea and other approved markets. The equity exposure of PFEPRF will generally range from 75% to 90% of its NAV,” he continued.

He added that other than investing in REITS, PFEPRF could invest in stocks, which are involved in property investment and development, hotel & resorts development and investment. “This feature of the fund therefore offers investors the benefit of increased diversification and a broader range of investment assets,” he explained.

Launching at a NAV of RM0.25 per unit, PFEPRF is suitable for moderate investors who can expect extended periods of market highs and lows in pursuit of capital growth. During the 21-day initial offer period from 10 July 2007 to 30 July 2007, a promotional service charge of 5.45% of NAV per unit is levied upon the purchase of units of PFEPRF by investors. The minimum initial investment for the fund is RM1, 000 and the minimum additional investment is RM100. “PFEPRF will, on a best effort basis, distribute income annually to unit holders,” he said.

PISBF, on the other hand, is an Islamic bond fund that seeks to provide annual income through investments in Islamic debt securities, which have remaining maturities of 7 years and below, and Islamic money market instruments. “The fund may invest in foreign Islamic debt securities in Singapore, Japan, Hong Kong, Australia, United Kingdom and other approved markets,” he said.

PISBF will be launched at a NAV of RM1.00 per unit during the 21-day offer period from 10 July 2007 to 30 July 2007. A service charge of up to 0.25% of NAV per unit is levied upon the purchase of units of PISBF by investors. Its minimum initial investment is RM1, 000 and minimum additional investment is RM100.

The 19,000-strong Public Mutual unit trust consultants distribute both funds. Interested investors can contact any Public Mutual unit trust consultant or call its Customer Service Hotline at 03-6279 5252 for more details of the funds.

Public Mutual is the largest private unit trust company in Malaysia and it currently manages 45 funds for more than 1,000,000 accountholders. As at 29 June 2007, the total NAV of the funds managed by the company was RM22 billion.

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