THE global economic downturn and financial turbulence has given rise to an overall climate of uncertainty. It is likely that many are having sleepless nights worrying about their hard-earned wealth vanishing into thin air or eroding or worst still, falling into the wrong hands.
One way to prevent that from happening, and it is getting more popular, is by setting up private trusts. Trusts are commonly used for family wealth preservation and estate planning.
OSK Trustees Bhd, one of the leading players in the trust business, has seen a 61% jump in revenue for private trusts last year from 2007.
A trust exists whenever a person known as the trustee, holds the legal ownership of a property, not for his own benefit, but for another person known as the beneficiary.
The trustee holds the legal title to the trust property, but the beneficiary enjoys most of the rights of an owner.
For example, where the trust property is shares of a company, it is the beneficiary who will ultimately receive and spend the dividends.
OSK Trustees chief operating officer and executive director Ong Eu Jin says many people are still not aware of the importance of having a trust.
“Some people tend to transfer one’s personal assets to family members or to “trusted persons” for safe keeping. This can be a problem if these “guardians of wealth” intend to misuse it or dispose of the assets as they wish since they are considered the legal owners, he adds.
A trust, on the other hand, does not give the beneficiaries of the trust full control as absolute control only comes with legal ownership, Ong says.
As they are not the legal owners, the beneficiaries cannot sell the assets, he adds. The trustee will manage the trust assets and distribute the income derived from the trust assets in accordance with the trust deed, which is the legal document creating the trust and containing the wishes of the creator of the trust.
As such, he notes that the beneficiaries will enjoy income from the trust assets but yet be unable to dispose of the assets.
A trust is also an important estate planning tool. Its two primary objectives in terms of estate planning are to unlock the frozen assets of one’s estate in the shortest possible time and without incurring unnecessary costs; and to ensure that the assets will be passed on to the persons of his choice, says Ong.
Ong, however, cautions that a trust is not a vehicle created with the outright purpose of putting a person’s assets out of the reach of his creditors.
After all, a trust is void if its objective is illegal, immoral or against public policy including to facilitate or encourage a breach of law or to cheat one’s creditors, he says.
According to him, an increasing number of people are now using life insurance to fund their trusts, hence providing a wider audience to enjoy the benefits of trusts.
The gloomy economic picture is also putting brakes on consumer spending as many of them are jittery and tend to keep their purses “tight”.
Great Vision Advisory Group head of tax and financial planning Chua Tia Guan says even during difficult times, people can still spend provided they have an emergency fund and a proper budget.
“Generally, from a prudent personal financial management perspective, a person should have at least three to six months’ emergency funds in case of any eventuality.
“This practice is particularly important during these uncertain times where pay cuts and retrenchments are highly possible. Those who do not have any emergency funds and proper budgets are advised to plan their spending cautiously,” he says.
He adds that it will be useful to draw up a personal budget, taking into account the expected cash inflow with possible reduction in income.
“Prioritising one’s expenses is equally important in personal budgeting so that unnecessary expenditure can be deferred or avoided totally.
“If a proper budget has been drawn up, then there is no reason for consumers not to spend even during difficult times,” Chua says.
He also advocates the dollar cost averaging method for people looking to invest in the current volatile market.
This method involves slowly picking up certain selected stocks over a period of time where the average cost of purchase is “low”.
“Having said that, do your homework first before investing. An investor should have the financial ability to hold the investment for at least two to three years before it yields result, provided you have the right pick,” he says.
Source : The Star Business, BY DALJIT DHESI, Saturday January 17, 2009
Sunday, January 18, 2009
Friday, January 9, 2009
Unit Trust Price as at 9 January 2009
Public Savings Fund**0.5117
Public Growth Fund**0.3789
Public Index Fund 0.5350
Public Industry Fund** 0.4207
Public Aggressive Growth Fund**0.5492
Public Regular Savings Fund 0.4344
Public Balanced Fund**0.6381
Public Bond Fund 0.9412
Public Ittikal Fund**0.7134
Public Smallcap Fund** 0.5880
Public Islamic Bond Fund0.9968
Public Equity Fund** 0.2217
Public Institutional Bond Fund 0.9995
Public Islamic Equity Fund 0.2502
Public Money Market Fund 1.0189
Public Focus Select Fund**0.1640
Public Enhanced Bond Fund**0.9517
Public Dividend Select Fund 0.2188
Public Islamic Opportunities Fund**0.2255
Public Islamic Balanced Fund 0.2140
Public Far-east Select Fund**0.1995
Public Select Bond Fund 1.0015
Public Islamic Dividend Fund 0.2427
Public Regional Sector Fund**0.1759
Public Asia Ittikal Fund** 0.1969
Public Global Select Fund**0.1642
Public Far-east Dividend Fund**0.1793
Public Islamic Enhanced Bond Fund**0.9568
Public Far-east Balanced Fund**0.1754
Public Global Balanced Fund**0.1820
Public Islamic Asia Dividend Fund**0.1641
Public China Select Fund**0.1326
Public Islamic Money Market Fund 1.0240
Public Far East Property & Resorts Fund**0.1259
Public Islamic Select Bond Fund 1.0221
Public Islamic Asia Balanced Fund**0.1836
Public South-east Asia Select Fund**0.1567
Public Sector Select Fund 0.1736
Public Islamic Sector Select Fund 0.1754
Public China Ittikal Fund**0.1429
Public Far-east Consumer Themes Fund**0.1962
Public Islamic Select Treasures Fund 0.2059
Public China Titans Fund**0.1838
Public Islamic Optimal Growth Fund 0.1929
Public Far-east Telco & Infrastructure Fund ** 0.2489
Public Capital Protected Select Portfolio Fund **1.0155
Public Islamic Select Enterprises Fund 0.2441
Public Islamic Income Fund 1.0089
PB Balanced Fund**0.7372PB Growth Fund**0.6404
PB Fixed Income Fund 1.0068
PB Islamic Equity Fund 0.1803
PB Islamic Bond Fund 1.0236
PB Asia Equity Fund**0.1955
PB Islamic Asia Equity Fund**0.1654
PB Cash Management Fund 1.0196
PB Cash Plus Fund 1.0008
PB Asean Dividend Fund**0.1646
PB Islamic Cash Management Fund 1.0151
PB Euro Pacific Equity Fund**0.1415
PB Islamic Asia Strategic Sector Fund**0.1389
PB China Pacific Equity Fund**0.1230
PB Asia Real Estate Income Fund**0.1691
PB Islamic Cash Plus Fund 1.0013
PB China Asean Equity Fund**0.2032
PB Capital Protected Dragon Fund**0.9766
PB Capital Protected Resources Fund**1.0022
Public Growth Fund**0.3789
Public Index Fund 0.5350
Public Industry Fund** 0.4207
Public Aggressive Growth Fund**0.5492
Public Regular Savings Fund 0.4344
Public Balanced Fund**0.6381
Public Bond Fund 0.9412
Public Ittikal Fund**0.7134
Public Smallcap Fund** 0.5880
Public Islamic Bond Fund0.9968
Public Equity Fund** 0.2217
Public Institutional Bond Fund 0.9995
Public Islamic Equity Fund 0.2502
Public Money Market Fund 1.0189
Public Focus Select Fund**0.1640
Public Enhanced Bond Fund**0.9517
Public Dividend Select Fund 0.2188
Public Islamic Opportunities Fund**0.2255
Public Islamic Balanced Fund 0.2140
Public Far-east Select Fund**0.1995
Public Select Bond Fund 1.0015
Public Islamic Dividend Fund 0.2427
Public Regional Sector Fund**0.1759
Public Asia Ittikal Fund** 0.1969
Public Global Select Fund**0.1642
Public Far-east Dividend Fund**0.1793
Public Islamic Enhanced Bond Fund**0.9568
Public Far-east Balanced Fund**0.1754
Public Global Balanced Fund**0.1820
Public Islamic Asia Dividend Fund**0.1641
Public China Select Fund**0.1326
Public Islamic Money Market Fund 1.0240
Public Far East Property & Resorts Fund**0.1259
Public Islamic Select Bond Fund 1.0221
Public Islamic Asia Balanced Fund**0.1836
Public South-east Asia Select Fund**0.1567
Public Sector Select Fund 0.1736
Public Islamic Sector Select Fund 0.1754
Public China Ittikal Fund**0.1429
Public Far-east Consumer Themes Fund**0.1962
Public Islamic Select Treasures Fund 0.2059
Public China Titans Fund**0.1838
Public Islamic Optimal Growth Fund 0.1929
Public Far-east Telco & Infrastructure Fund ** 0.2489
Public Capital Protected Select Portfolio Fund **1.0155
Public Islamic Select Enterprises Fund 0.2441
Public Islamic Income Fund 1.0089
PB Balanced Fund**0.7372PB Growth Fund**0.6404
PB Fixed Income Fund 1.0068
PB Islamic Equity Fund 0.1803
PB Islamic Bond Fund 1.0236
PB Asia Equity Fund**0.1955
PB Islamic Asia Equity Fund**0.1654
PB Cash Management Fund 1.0196
PB Cash Plus Fund 1.0008
PB Asean Dividend Fund**0.1646
PB Islamic Cash Management Fund 1.0151
PB Euro Pacific Equity Fund**0.1415
PB Islamic Asia Strategic Sector Fund**0.1389
PB China Pacific Equity Fund**0.1230
PB Asia Real Estate Income Fund**0.1691
PB Islamic Cash Plus Fund 1.0013
PB China Asean Equity Fund**0.2032
PB Capital Protected Dragon Fund**0.9766
PB Capital Protected Resources Fund**1.0022
Tuesday, January 6, 2009
Public Mutual declares distributions for 3 funds
KUALA LUMPUR: Public Mutual Bhd yesterday announced distributions for three of its funds, amounting to 7.5 sen for Public Savings Fund, 1.25 sen for Public Focus Select Fund and 1.75 sen for Public Islamic Enhanced Bond Fund for the financial year ended Dec 31, 2008. Public Savings is its maiden fund.
Unit trust still a good bet for the long term
KUALA LUMPUR: The past 12 months has seen the erosion of wealth in virtually every type of non-fixed income investment, and unit trust funds have not been spared.
Despite offering a modicum of security compared to traditional equities owing to its large pool of investors and its diverse portfolio of investments, trust funds have nonetheless declined alongside market indices, albeit at a slower rate.
According to data from the Securities Commission, the total net asset value (NAV) in Malaysia dropped by more than 20% to RM135.87 billion in November from RM170.1 billion in January.
There is, however, an anomaly within the figure, namely the decline in the NAV of Islamic-based funds. Unlike conventional funds’ NAV, which plunged 22% to RM119.77 billion in November from RM153.7 billion in January, Islamic funds declined only 2% to RM16.11 billion from RM16.4 billion.
A fund manager noted that this could be due to the fact that Islamic funds were not traded intensively and tended to lag behind the movement of conventional funds.
Case in point is the fact that the total NAV of Islamic funds only peaked in June with an NAV of RM17.98 billion, up 10% from January before starting its downwards slide. By that time, conventional funds’ NAV had already started to shed value since its peak in January.
On the whole, September’s figure also marked the first time that the total NAV failed to show positive year-on-year growth in at least four years. Subsequently, total NAV for September shrank 4% compared to the same month in 2007.
According to Eric Wong, Hong Kong head of research for global fund analyst Thomson Reuters Lipper, the last 12 months has seen unprecedented movements in the fund industry for both Malaysia and the region.
“The year-to-date (January to November) average loss of all funds registered for sale in Malaysia is the largest (-23.10%) since its average loss for the entire year in 1997(-43.30%),” Wong said in an email reply to The Edge Financial Daily.
He added that a similar trend had been occurring in other major regional markets such as Thailand, Hong Kong, Taiwan, Singapore and China.
The silver lining for Malaysian investors, however, is that the Malaysian fund industry has incurred significantly smaller losses then that of most other Asian countries. This finding is not surprising as the Kuala Lumpur Stock Exchange has outperformed other countries in the region.
Wong believed there were other considerations as well.
“This may probably be attributed to the capital control imposed by the Malaysian government, rendering foreign investors less interested to invest in Malaysian equities and bonds,” Wong said. “Their relative low participation reduces the volatility of Malaysian equities and bonds.
“This, coupled with the majority of funds that are registered for sale in Malaysia, are invested in Malaysian equities and bonds, limits the average loss of Malaysian funds in comparison to those in other Asian countries.”
Responding to reports that a majority of equity funds in Malaysia had increased their portfolio allocation to cash or other liquid securities in Malaysia as a precaution against a continued slump in the market, Wong said some funds made the switch to cash in the third quarter.
However, there was no evidence that a majority of equity funds were doing so, he added.
Time to buy and what to buy? With equities trading at historic lows, common wisdom suggests that now would be a good time to cherry pick for good stocks at cheap prices. By extension, this would mean that equity funds also would trade cheaply.
Nonetheless, Wong believed it was premature to conclude that equities were undervalued, saying it was likely that equities would continue their slide in 2009.
“The values of equities are basically determined by two components: interest rate and earnings growth. Low interest rates and expectation that central banks around the globe will continue to lower interest rates will continue to support equities,” he said.
“However, with reports showing the global economic environment is projected to deteriorate further in 2009, the downwards trend of corporate earnings growth is less likely to reverse in the coming quarters.
“Such a scenario means equities will still face significant downside risk on their valuation in 2009 and, hence, investors should not at this stage park their capital in equity funds.”
Wong added that the same was likely true for commodity funds, which were traditionally even more volatile than equity funds.
For investors who are concerned about preserving the value of their investments, Wong advised continued investment in bond-linked and money market funds, although yields had fallen to very low levels recently.
Should investors stay away from unit trusts?
No, said Robert Foo, financial planner and managing director of MyFP Services Sdn Bhd.
So long as investing for the long-term is concerned, investors shouldn’t concern themselves too much with the current state of the market, as markets will grow in the long term.
Unit trust funds, he added, were not “opportunistic investments” that would yield massive returns in the short-term. As a managed basket of investments, funds offer the benefit of professional management in exchange for more normalised returns on investments.
“When we talk to clients, we tell them that they have to look at it from a period of time of five years and above,” Foo said. “Our objective is to help our clients achieve their investment targets and this means rebalancing their portfolios depending on the condition of the market.”
Meanwhile, markets will rise and fall in the long-term, he said. What investors have to do is to rebalance their portfolios during both the peaks and the troughs. In that respect, it is essential for investors to establish investment goals that correspond with their tolerance for risk.
Foo said a disciplined approach would allow for greater returns in the long-term. His clients, he said, averaged between 7%-8% in returns although they had differing investment targets.
“When the market was way up, we also rebalanced our clients’ portfolios. We said, ‘Look, 60% return is absurd for a fund, so we need to rebalance,’ and we rebalanced our clients down,” he said.
As for asset classes of funds, Foo said the type of fund was not as important as the revenue model of the underlying investment and consistency in performance, although he said MyFP’s policy was to stay away from “theme-based funds” such as those localised in a specific region or commodity.
Foo also advised that investors refrain from going on a purchasing spree based on the “cheapness” of a stock or fund, as pricing was not a good indicator of the value of the share.
“At the end of the day, it’s not the price that determines the value of the stock — that kind of analysis is too simplistic. You have to look at the intrinsic value of the underlying equity to determine that,” Foo said.
Source : The Edge Daily
Despite offering a modicum of security compared to traditional equities owing to its large pool of investors and its diverse portfolio of investments, trust funds have nonetheless declined alongside market indices, albeit at a slower rate.
According to data from the Securities Commission, the total net asset value (NAV) in Malaysia dropped by more than 20% to RM135.87 billion in November from RM170.1 billion in January.
There is, however, an anomaly within the figure, namely the decline in the NAV of Islamic-based funds. Unlike conventional funds’ NAV, which plunged 22% to RM119.77 billion in November from RM153.7 billion in January, Islamic funds declined only 2% to RM16.11 billion from RM16.4 billion.
A fund manager noted that this could be due to the fact that Islamic funds were not traded intensively and tended to lag behind the movement of conventional funds.
Case in point is the fact that the total NAV of Islamic funds only peaked in June with an NAV of RM17.98 billion, up 10% from January before starting its downwards slide. By that time, conventional funds’ NAV had already started to shed value since its peak in January.
On the whole, September’s figure also marked the first time that the total NAV failed to show positive year-on-year growth in at least four years. Subsequently, total NAV for September shrank 4% compared to the same month in 2007.
According to Eric Wong, Hong Kong head of research for global fund analyst Thomson Reuters Lipper, the last 12 months has seen unprecedented movements in the fund industry for both Malaysia and the region.
“The year-to-date (January to November) average loss of all funds registered for sale in Malaysia is the largest (-23.10%) since its average loss for the entire year in 1997(-43.30%),” Wong said in an email reply to The Edge Financial Daily.
He added that a similar trend had been occurring in other major regional markets such as Thailand, Hong Kong, Taiwan, Singapore and China.
The silver lining for Malaysian investors, however, is that the Malaysian fund industry has incurred significantly smaller losses then that of most other Asian countries. This finding is not surprising as the Kuala Lumpur Stock Exchange has outperformed other countries in the region.
Wong believed there were other considerations as well.
“This may probably be attributed to the capital control imposed by the Malaysian government, rendering foreign investors less interested to invest in Malaysian equities and bonds,” Wong said. “Their relative low participation reduces the volatility of Malaysian equities and bonds.
“This, coupled with the majority of funds that are registered for sale in Malaysia, are invested in Malaysian equities and bonds, limits the average loss of Malaysian funds in comparison to those in other Asian countries.”
Responding to reports that a majority of equity funds in Malaysia had increased their portfolio allocation to cash or other liquid securities in Malaysia as a precaution against a continued slump in the market, Wong said some funds made the switch to cash in the third quarter.
However, there was no evidence that a majority of equity funds were doing so, he added.
Time to buy and what to buy? With equities trading at historic lows, common wisdom suggests that now would be a good time to cherry pick for good stocks at cheap prices. By extension, this would mean that equity funds also would trade cheaply.
Nonetheless, Wong believed it was premature to conclude that equities were undervalued, saying it was likely that equities would continue their slide in 2009.
“The values of equities are basically determined by two components: interest rate and earnings growth. Low interest rates and expectation that central banks around the globe will continue to lower interest rates will continue to support equities,” he said.
“However, with reports showing the global economic environment is projected to deteriorate further in 2009, the downwards trend of corporate earnings growth is less likely to reverse in the coming quarters.
“Such a scenario means equities will still face significant downside risk on their valuation in 2009 and, hence, investors should not at this stage park their capital in equity funds.”
Wong added that the same was likely true for commodity funds, which were traditionally even more volatile than equity funds.
For investors who are concerned about preserving the value of their investments, Wong advised continued investment in bond-linked and money market funds, although yields had fallen to very low levels recently.
Should investors stay away from unit trusts?
No, said Robert Foo, financial planner and managing director of MyFP Services Sdn Bhd.
So long as investing for the long-term is concerned, investors shouldn’t concern themselves too much with the current state of the market, as markets will grow in the long term.
Unit trust funds, he added, were not “opportunistic investments” that would yield massive returns in the short-term. As a managed basket of investments, funds offer the benefit of professional management in exchange for more normalised returns on investments.
“When we talk to clients, we tell them that they have to look at it from a period of time of five years and above,” Foo said. “Our objective is to help our clients achieve their investment targets and this means rebalancing their portfolios depending on the condition of the market.”
Meanwhile, markets will rise and fall in the long-term, he said. What investors have to do is to rebalance their portfolios during both the peaks and the troughs. In that respect, it is essential for investors to establish investment goals that correspond with their tolerance for risk.
Foo said a disciplined approach would allow for greater returns in the long-term. His clients, he said, averaged between 7%-8% in returns although they had differing investment targets.
“When the market was way up, we also rebalanced our clients’ portfolios. We said, ‘Look, 60% return is absurd for a fund, so we need to rebalance,’ and we rebalanced our clients down,” he said.
As for asset classes of funds, Foo said the type of fund was not as important as the revenue model of the underlying investment and consistency in performance, although he said MyFP’s policy was to stay away from “theme-based funds” such as those localised in a specific region or commodity.
Foo also advised that investors refrain from going on a purchasing spree based on the “cheapness” of a stock or fund, as pricing was not a good indicator of the value of the share.
“At the end of the day, it’s not the price that determines the value of the stock — that kind of analysis is too simplistic. You have to look at the intrinsic value of the underlying equity to determine that,” Foo said.
Source : The Edge Daily
Sunday, January 4, 2009
Best way to invest RM50,000 now
Have some cash to invest? Three experts were asked what would be the best way to invest RM50,000 and below are their responses.
Andy Tang
Executive Director
Head of Performance Development
Great Vision Advisory Group
First of all, we need to know what is the purpose of the savings? Is it for short-term use? Medium or long-term usage?
Our money should be allocated into three portions: liquidity, profit and security. Usually, money in the liquidity portion is meant for short-term use. The money allocated for the profit portion is mainly for investment, hedging for higher return (either to re-invest in business, the share market, etc.), whereas money allocated for security purpose is meant for long-term use such as retirement, long-term care, education and lifestyle.
For liquidity purposes, which is mainly for the short term, it usually involves savings accounts, current accounts, fixed deposits or short-term income funds.
Director Andy Tang
The ideal ratio of funds to be utilised is 20% for liquidity, 35% for profitability and 45% for security. Of course, the ratio is different from time to time and from one individual to another.
While making the allocation, it is a must to re-visit or review other essential planning such as a healthcare plan, family income protection plan, future income protection plan, critical illness coverage plan, debt cancellation, mortgage protection plan and mortgage review, life insurance and estate planning.
Before making any decision on the RM50,000, we need to identify the end in mind to avoid any disappointment.
First, we have to review and identify what other financial resources we have and only then proceed with the plan.
In conclusion, after checking and reviewing your personal cashflow, this is not only the RM50,000 that we should plan for but it could involve the ongoing securing of wealth from your yearly surplus in order to ensure wealth preservation and accumulation for the future. For a better picture of the entire planning, it is always advisable to look for the capable financial adviser.
Reginald Yoganathan Hunt
Senior Group Sales Manager
Great Eastern Life Assurance (Malaysia) Berhad
Investing RM50,000 over a period of six to 10 years. There are a number of financial instruments that yield higher than the fixed deposit and give a reasonable return of 7%–9% a year.
·Investment-linked single premium with a reputable life insurance company. Equity funds have shown to generate 8% to 10% return over a period of seven to 10 years but there is also the danger of a market crash where you may end up poorer. Bond funds give a lower return and are safer.
Reginald Yoganathan Hunt
·Real estate investment trusts (REITs) have recently sprung up and with quality buildings and high rental rates, a fair income can be assumed and reasonable returns could be expected.
·Unit trusts have been in the scene for quite some time. Most of them are life insurance or bank-backed organisations and they have also shown consistent returns.
·Structured products have recently come into the scene. Insurance companies and banks have moved into cash on low fixed deposit rates. As the experience is still in its infancy stage, we will have to wait to see if they perform well.
My recommendation would be to invest in investment-linked single premium product. Half of the RM50,000 can be invested in bonds and the other half in equities.
Robert Foo
Managing Director and Principal Consultant
MyFP Services Sdn Bhd
We should aim to get real returns of about 5% to 6% after deducting the inflation rate if our objective is to protect of our savings value from being eroded in times of high inflation.
Robert Foo
In the long term, however, we expect interest rates to moderate to about 2% to 3%, hence we would target to obtain about 7% to 8% in gross returns.
The financial instrument to achieve this would be unit trusts of different asset classes.
We would usually invest with about four to five different fund managers as well as varying asset classes as a form of risk diversification.
Despite the volatile market situation, it is possible to achieve notable returns in these investments provided we invest for the long term, generally more than five years.
It is also important to review our investment portfolio every six months and restructure according to the market’s performance.
Depending on one’s life stage, it would be necessary to plan for expenses as well as insurance before investing.
It is also crucial to have a timeframe in mind when investing.
For example, if we are planning for our retirement in 20 years’ time, we would target higher returns at the beginning by investing in riskier asset classes.
We would then gradually move to less riskier forms of asset classes as we near our retirement.
Source : The Star, 3 January 2009
Andy Tang
Executive Director
Head of Performance Development
Great Vision Advisory Group
First of all, we need to know what is the purpose of the savings? Is it for short-term use? Medium or long-term usage?
Our money should be allocated into three portions: liquidity, profit and security. Usually, money in the liquidity portion is meant for short-term use. The money allocated for the profit portion is mainly for investment, hedging for higher return (either to re-invest in business, the share market, etc.), whereas money allocated for security purpose is meant for long-term use such as retirement, long-term care, education and lifestyle.
For liquidity purposes, which is mainly for the short term, it usually involves savings accounts, current accounts, fixed deposits or short-term income funds.
Director Andy Tang
The ideal ratio of funds to be utilised is 20% for liquidity, 35% for profitability and 45% for security. Of course, the ratio is different from time to time and from one individual to another.
While making the allocation, it is a must to re-visit or review other essential planning such as a healthcare plan, family income protection plan, future income protection plan, critical illness coverage plan, debt cancellation, mortgage protection plan and mortgage review, life insurance and estate planning.
Before making any decision on the RM50,000, we need to identify the end in mind to avoid any disappointment.
First, we have to review and identify what other financial resources we have and only then proceed with the plan.
In conclusion, after checking and reviewing your personal cashflow, this is not only the RM50,000 that we should plan for but it could involve the ongoing securing of wealth from your yearly surplus in order to ensure wealth preservation and accumulation for the future. For a better picture of the entire planning, it is always advisable to look for the capable financial adviser.
Reginald Yoganathan Hunt
Senior Group Sales Manager
Great Eastern Life Assurance (Malaysia) Berhad
Investing RM50,000 over a period of six to 10 years. There are a number of financial instruments that yield higher than the fixed deposit and give a reasonable return of 7%–9% a year.
·Investment-linked single premium with a reputable life insurance company. Equity funds have shown to generate 8% to 10% return over a period of seven to 10 years but there is also the danger of a market crash where you may end up poorer. Bond funds give a lower return and are safer.
Reginald Yoganathan Hunt
·Real estate investment trusts (REITs) have recently sprung up and with quality buildings and high rental rates, a fair income can be assumed and reasonable returns could be expected.
·Unit trusts have been in the scene for quite some time. Most of them are life insurance or bank-backed organisations and they have also shown consistent returns.
·Structured products have recently come into the scene. Insurance companies and banks have moved into cash on low fixed deposit rates. As the experience is still in its infancy stage, we will have to wait to see if they perform well.
My recommendation would be to invest in investment-linked single premium product. Half of the RM50,000 can be invested in bonds and the other half in equities.
Robert Foo
Managing Director and Principal Consultant
MyFP Services Sdn Bhd
We should aim to get real returns of about 5% to 6% after deducting the inflation rate if our objective is to protect of our savings value from being eroded in times of high inflation.
Robert Foo
In the long term, however, we expect interest rates to moderate to about 2% to 3%, hence we would target to obtain about 7% to 8% in gross returns.
The financial instrument to achieve this would be unit trusts of different asset classes.
We would usually invest with about four to five different fund managers as well as varying asset classes as a form of risk diversification.
Despite the volatile market situation, it is possible to achieve notable returns in these investments provided we invest for the long term, generally more than five years.
It is also important to review our investment portfolio every six months and restructure according to the market’s performance.
Depending on one’s life stage, it would be necessary to plan for expenses as well as insurance before investing.
It is also crucial to have a timeframe in mind when investing.
For example, if we are planning for our retirement in 20 years’ time, we would target higher returns at the beginning by investing in riskier asset classes.
We would then gradually move to less riskier forms of asset classes as we near our retirement.
Source : The Star, 3 January 2009
Unit Trust Price as at 2 January 2009
Source : Public Mutual Berhad
Public Savings Fund **0.5724
Public Growth Fund **0.3671
Public Index Fund 0.5289
Public Industry Fund ** 0.4113
Public Aggressive Growth Fund **0.5365
Public Regular Savings Fund 0.4303
Public Balanced Fund **0.6250
Public Bond Fund 0.9399
Public Ittikal Fund **0.6968
Public Smallcap Fund ** 0.5768
Public Islamic Bond Fund 0.9920
Public Equity Fund ** 0.2143
Public Institutional Bond Fund 0.9999
Public Islamic Equity Fund 0.2481
Public Money Market Fund 1.0184
Public Focus Select Fund **0.1702
Public Enhanced Bond Fund **0.9481
Public Dividend Select Fund 0.2195
Public Islamic Opportunities Fund **0.2180
Public Islamic Balanced Fund 0.2134
Public Far-east Select Fund **0.1940
Public Select Bond Fund 1.0022
Public Islamic Dividend Fund 0.2406
Public Regional Sector Fund **0.1697
Public Asia Ittikal Fund ** 0.1892
Public Global Select Fund **0.1591
Public Far-east Dividend Fund **0.1729
Public Islamic Enhanced Bond Fund **0.9721
Public Far-east Balanced Fund **0.1723
Public Global Balanced Fund **0.1784
Public Islamic Asia Dividend Fund **0.1590
Public China Select Fund **0.1349
Public Islamic Money Market Fund 1.0236
Public Far East Property & Resorts Fund **0.1182
Public Islamic Select Bond Fund 1.0221
Public Islamic Asia Balanced Fund **0.1785
Public South-east Asia Select Fund **0.1497
Public Sector Select Fund 0.1729
Public Islamic Sector Select Fund 0.1748
Public China Ittikal Fund **0.1454
Public Far-east Consumer Themes Fund **0.1932
Public Islamic Select Treasures Fund 0.2043
Public China Titans Fund **0.1859
Public Islamic Optimal Growth Fund 0.1924
Public Far-east Telco & Infrastructure Fund **0.2448
Public Capital Protected Select Portfolio Fund **1.0125
Public Islamic Select Enterprises Fund 0.2442
Public Islamic Income Fund 1.0086
Pb Balanced Fund **0.7246
Pb Growth Fund **0.6278
Pb Fixed Income Fund 1.0107
Pb Islamic Equity Fund 0.1799
Pb Islamic Bond Fund 1.0240
Pb Asia Equity Fund **0.1904
Pb Islamic Asia Equity Fund **0.1605
Pb Cash Management Fund 1.0191
Pb Cash Plus Fund 1.0003
Pb Asean Dividend Fund **0.1573
Pb Islamic Cash Management Fund 1.0147
Pb Euro Pacific Equity Fund **0.1359
Pb Islamic Asia Strategic Sector Fund **0.1345
Pb China Pacific Equity Fund **0.1248
Pb Asia Real Estate Income Fund **0.1621
Pb Islamic Cash Plus Fund 1.0007
Pb China Asean Equity Fund **0.2076
Pb Capital Protected Dragon Fund **0.9763
Pb Capital Protected Resources Fund **1.0005
Public Savings Fund **0.5724
Public Growth Fund **0.3671
Public Index Fund 0.5289
Public Industry Fund ** 0.4113
Public Aggressive Growth Fund **0.5365
Public Regular Savings Fund 0.4303
Public Balanced Fund **0.6250
Public Bond Fund 0.9399
Public Ittikal Fund **0.6968
Public Smallcap Fund ** 0.5768
Public Islamic Bond Fund 0.9920
Public Equity Fund ** 0.2143
Public Institutional Bond Fund 0.9999
Public Islamic Equity Fund 0.2481
Public Money Market Fund 1.0184
Public Focus Select Fund **0.1702
Public Enhanced Bond Fund **0.9481
Public Dividend Select Fund 0.2195
Public Islamic Opportunities Fund **0.2180
Public Islamic Balanced Fund 0.2134
Public Far-east Select Fund **0.1940
Public Select Bond Fund 1.0022
Public Islamic Dividend Fund 0.2406
Public Regional Sector Fund **0.1697
Public Asia Ittikal Fund ** 0.1892
Public Global Select Fund **0.1591
Public Far-east Dividend Fund **0.1729
Public Islamic Enhanced Bond Fund **0.9721
Public Far-east Balanced Fund **0.1723
Public Global Balanced Fund **0.1784
Public Islamic Asia Dividend Fund **0.1590
Public China Select Fund **0.1349
Public Islamic Money Market Fund 1.0236
Public Far East Property & Resorts Fund **0.1182
Public Islamic Select Bond Fund 1.0221
Public Islamic Asia Balanced Fund **0.1785
Public South-east Asia Select Fund **0.1497
Public Sector Select Fund 0.1729
Public Islamic Sector Select Fund 0.1748
Public China Ittikal Fund **0.1454
Public Far-east Consumer Themes Fund **0.1932
Public Islamic Select Treasures Fund 0.2043
Public China Titans Fund **0.1859
Public Islamic Optimal Growth Fund 0.1924
Public Far-east Telco & Infrastructure Fund **0.2448
Public Capital Protected Select Portfolio Fund **1.0125
Public Islamic Select Enterprises Fund 0.2442
Public Islamic Income Fund 1.0086
Pb Balanced Fund **0.7246
Pb Growth Fund **0.6278
Pb Fixed Income Fund 1.0107
Pb Islamic Equity Fund 0.1799
Pb Islamic Bond Fund 1.0240
Pb Asia Equity Fund **0.1904
Pb Islamic Asia Equity Fund **0.1605
Pb Cash Management Fund 1.0191
Pb Cash Plus Fund 1.0003
Pb Asean Dividend Fund **0.1573
Pb Islamic Cash Management Fund 1.0147
Pb Euro Pacific Equity Fund **0.1359
Pb Islamic Asia Strategic Sector Fund **0.1345
Pb China Pacific Equity Fund **0.1248
Pb Asia Real Estate Income Fund **0.1621
Pb Islamic Cash Plus Fund 1.0007
Pb China Asean Equity Fund **0.2076
Pb Capital Protected Dragon Fund **0.9763
Pb Capital Protected Resources Fund **1.0005
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