Unit trust investment thread

[Keverus]

I know many people here do not believe in unit trusts, but I personally think Unit Trusts have their use as well.

For those who have vested in Unit Trusts, can share what funds you are vested in.

Vested in Franklin US oppty fund last year and enjoyed pretty solid returns, but since then has moved out. Not holding any unit trusts at the moment.

 

[sandwich]

Alliance bernstein global high yield sgd

 

[wahkao3]

I know many people here do not believe in unit trusts, but I personally think Unit Trusts have their use as well.

what use?
unit trust is for financial adviser to earn money one.

 

[Keverus]

Can AIA Investment Linked Policy be counted as UT?

I have the following:
1) AIA US Equity
2) AIA European Equity Fund
3) AIA global technology
4) AIA regional fixed income

all 25% equal. Reblance quarterly.

considered.

i have no idea abt AIA funds. how are they doing?

 

[Keverus]

Alliance bernstein global high yield sgd

how has it been working for you?

 

[Keverus]

what use?
unit trust is for financial adviser to earn money one.

so stocks are for brokers to earn money one lor.

going by ur logic.

yes, unit trusts have fees. but similarly, stocks also have fees. does that means we dont trade stocks?

 

[wahkao3]

so stocks are for brokers to earn money one lor.

going by ur logic.

yes, unit trusts have fees. but similarly, stocks also have fees. does that means we dont trade stocks?

good counter argument.

let me lay down the facts why stocks more more superior.

stocks commission, in/out is 0.25%+0.25%
Unit trust commission is 3%+ 1% annual management fee

Unit trust is not transparent. The fund managers take kopi lui you also wont know. Many many hidden fees.
Unit trust no liquidity. You urgently want to sell, they deliberately wont entertain you. They want to drag your time because they are mainly paid by how big their funds are, not how well they perform or how fast they service their clients. By the time they sell, its usually at unfavorable prices.
When you want to buy, they very fast come and serve you.
unit trust is not efficient because they need to maintain some cash for redemption.


This kind of rubbish you can take it? You can take it I cannot take it.

 

[Keverus]

UT comm is 0.5%, then 0.125% platform fee. Use the correct platform.

You can still argue that these fees are higher than stocks, but why do you find it low for stocks? That's because when we buy stocks, we expect it to rise more than those amounts. Similarly, if I were to buy a Unit Trust, I would expect it to rise more than the fees.

Ut trust have management fee, because the fund is actively managed. while many people say funds do not out-perform, it is actually a generalized statement. there are funds that outperform. Nikkei index went up 55% last year, but after accounting for yen depreciation, investors would had gain 20%. UOB's japan fund saw a return of 23%, OCBC's Lionglobal saw a return of 30+%.

The selling part is not true. You can always use an online platform. I have liquidated my position in US and gotten my money back within the specified time frame. Your "they" is most likely referring to the "bankers" and "consultants" at banks. They are just highly-glorified salespeople. They probably refuse to sell the funds because there is no commission for them and they are lazy to do the paperwork.

If you talk about selling stocks and getting back your money faster, I would say that UTs spreads ur money over more stocks. THis is the reason why NAV of the fund is usually delayed. I would say this is an advantage that is tied with a disadvantage. Diversification that comes with slower settlement. But if this money is set aside for mid-term investment, then a few more days shouldnt really matter, right? After all, we should be looking at all these if we dont even have an emergency fund.

Yes, UT may retain a portion as cash, hence inefficient. Nothing is ever 100% perfect. I myself know the disadvantrages of UTs. I just feel that UTs can have their purpose.

For instance, if a foreigner wants to invest in Singapore but has no clue about SG stocks. He can buy the STI ETF, which would be heavily weighted by banks. However, if he doesnt have a good outlook for the financial/banking sector, he can instead choose a UT that is more focused on other sectors.




There's quite a fair bit of bullshiat business with UTs. However, it's not entirely useless imo.

Just my two cents, I'm new to investing as well and looking to learn.

 

[wahkao3]

UT comm is 0.5%, then 0.125% platform fee. Use the correct platform.

what platform sia, so cheap
why the comm so low? buy from who can have cheap comm?

 

[Keverus]

what platform sia, so cheap
why the comm so low? buy from who can have cheap comm?

fundsupermart

this rates are for equities. i think bonds/fixed income funds even cheaper.

 

[wahkao3]

fundsupermart

this rates are for equities. i think bonds/fixed income funds even cheaper.

Lets compare the mutual fund to ETFs
I think ETFs are more superior

 

[Keverus]

Lets compare the mutual fund to ETFs
I think ETFs are more superior

generally yes.

but if u want to target a specific sector, there may or may not have ETFs that will target so.

ETFs are purely equities. there are some UTs open up the option of bonds at low cost.

also, currency hedging is not available for ETFs.

 

[NiteX2]

UT comm is 0.5%, then 0.125% platform fee. Use the correct platform.

You can still argue that these fees are higher than stocks, but why do you find it low for stocks? That's because when we buy stocks, we expect it to rise more than those amounts. Similarly, if I were to buy a Unit Trust, I would expect it to rise more than the fees.

Ut trust have management fee, because the fund is actively managed. while many people say funds do not out-perform, it is actually a generalized statement. there are funds that outperform. Nikkei index went up 55% last year, but after accounting for yen depreciation, investors would had gain 20%. UOB's japan fund saw a return of 23%, OCBC's Lionglobal saw a return of 30+%.

The selling part is not true. You can always use an online platform. I have liquidated my position in US and gotten my money back within the specified time frame. Your "they" is most likely referring to the "bankers" and "consultants" at banks. They are just highly-glorified salespeople. They probably refuse to sell the funds because there is no commission for them and they are lazy to do the paperwork.

If you talk about selling stocks and getting back your money faster, I would say that UTs spreads ur money over more stocks. THis is the reason why NAV of the fund is usually delayed. I would say this is an advantage that is tied with a disadvantage. Diversification that comes with slower settlement. But if this money is set aside for mid-term investment, then a few more days shouldnt really matter, right? After all, we should be looking at all these if we dont even have an emergency fund.

Yes, UT may retain a portion as cash, hence inefficient. Nothing is ever 100% perfect. I myself know the disadvantrages of UTs. I just feel that UTs can have their purpose.

For instance, if a foreigner wants to invest in Singapore but has no clue about SG stocks. He can buy the STI ETF, which would be heavily weighted by banks. However, if he doesnt have a good outlook for the financial/banking sector, he can instead choose a UT that is more focused on other sectors.




There's quite a fair bit of bullshiat business with UTs. However, it's not entirely useless imo.

Just my two cents, I'm new to investing as well and looking to learn.

UT NAV is only known at the end of each trading day as UT are usually invested into equities and bonds. As such, equities and bonds prices are only known when the trading market closes for the day and the backend ppl calculate the whole UT portfolio NAV hence the delay

 

[Keverus]

I don't recommend it to you. I made this mistake when I bought it without knowing it thoroughly.

Most my investment were done in the post 2007/2008 financial crisis. With this bull run, the annualized return is somewhere around 9.0% if I calculate the monthly investment using monthly premium to minus the monthly ILP charge.

But... every AIA ILP fund is subject to 5% front load. Every month, it deducts 0.14583% from my portfolio. It is equivalent to 1.75% per annual.

If I chose the right platform to do the investment correctly,without front load and 1.75% will increase my return to be 9.0%+(1/0.95-1)+1.75% = 16.1%.

If further minus the insurance cost, which is 1.75 times of plus! term insurance, I think it should increase the return by at lease something behind the decimal point.

Most other investment only deduct monthly cost from cash fund, which has 0 front load. But what AIA deduct has 5% front load. If deduct cost from cash fund like FSM, my return will increase some decimal point also.

If minus the $6/m admin fee..., I guess my total portfolio return would be somewhere around 20% in the past 7+ years.

This doesnot include the money that was taken away in the first 2 years. It is about 17 months of premiums.

Because of my own fault, I lost 17 months premium in the first 2 years. For all those remaining money, I only get 9% return of a total return of 20+%.

Never by investment from insurance company! Never buy insurance from AIA!!!

No doubt some people will end up losing money after "investing" for so many years.

Why gahmen allow this kind of vampire to exist in Singapore. I don't know.

ILPs and UTs are kinda different. ILPs end up with a lot of loading fees.

 

[limster]

Unit trusts can be part of investment portfolio. But there is no reason to pay high and/or unnecessary fees like high sales charge or recurring charges like platform fee or worse still, ILP-related charges.

I prefer unit trusts that have managers with conservative strategies like Martin Lau who manages a few funds like First State Regional China: Martin Lau | Fund Manager Fact Sheet | First State | Citywire

I distrust unit trusts that do not declare who their fund manager is. If they are managing by committee, then they are just an overpriced ETF.

It is also useful to know if a fund is changing manager. For certain high risk funds, especially small caps, change of manager can have a devastating effect. One FSM recommended fund changed manager and after 1 year, the performance was so bad it was dropped from the recommended list.

 

[sandwich]

how has it been working for you?

Just started a few months back and now still recuperating commission charge of 3.5%.

There is no platform fee and no selling fee according to the bank retail guy. Monthly payout is about 0.5%. I'm sure some of the 'no fees' promised have been factored into the dividend payouts.

 

[Keverus]

Unit trusts can be part of investment portfolio. But there is no reason to pay high and/or unnecessary fees like high sales charge or recurring charges like platform fee or worse still, ILP-related charges.

I prefer unit trusts that have managers with conservative strategies like Martin Lau who manages a few funds like First State Regional China: Martin Lau | Fund Manager Fact Sheet | First State | Citywire

I distrust unit trusts that do not declare who their fund manager is. If they are managing by committee, then they are just an overpriced ETF.

It is also useful to know if a fund is changing manager. For certain high risk funds, especially small caps, change of manager can have a devastating effect. One FSM recommended fund changed manager and after 1 year, the performance was so bad it was dropped from the recommended list.

First State is an aussie asset management rite?

i think their Dividend Advantage fund buay pai

 

[Keverus]

Just started a few months back and now still recuperating commission charge of 3.5%.

There is no platform fee and no selling fee according to the bank retail guy. Monthly payout is about 0.5%. I'm sure some of the 'no fees' promised have been factored into the dividend payouts.

bank doest have platform fees.

but banks charge minmum 3-5% unless u r putting like $100k.

FSM has 0.5% charge then 0.125% per quarter. that means 0.5% per year.

So if you hold a UT for less than 5 years, banks are not a good option imo.

 

[wahkao3]

First State is an aussie asset management rite?

i think their Dividend Advantage fund buay pai

why buay pai?

 

[Keverus]

why buay pai?

asian equities (exclude japan). primarily hong kong, taiwan and sg.

got buy ocbc and dbs shares. also invests in samsung.

gives 1% dividend per quarter. shows long-term capital appreciation.

primarily i would say a pretty defensive and stable fund.

can use CPF OA

not a bad upgrade frm CPF OA if u are looking for sth stable.