Unit trust investment thread

[sandwich]

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.

I see. Other than the buy and sell commission from customers, do banks also get paid by the fund managers?

 

[Keverus]

I see. Other than the buy and sell commission from customers, do banks also get paid by the fund managers?

how i know sia lol. i am not banker.

but guess got trailer fees ba.

 

[wahkao3]

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

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

got buy these means its good meh?
Why not you yourself directly buy OCBC and DBS and Samsung instead of relying on a middle man to do it?

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

primarily i would say a pretty defensive and stable fund.

got give dividend doesnt mean its defensive.
never give dividend doesnt mean its not defensive.

The way to judge whether defensive or not is not to see whether they give dividend or not, but to see if the underlying assets/business get affected by business cycle.

Read the fine print carefully, in the event that the fund does not receive dividends from the companies they invest in, they will give dividend by deprecating the fund's value. There is no free lunch.


When market crash, everything also go down. Your funds will crash together and there is NOTHING you can do about it.

If you directly invest, you can get out of the market very fast with a click of button.

 

[Keverus]

I didnt say buy these means good..

well, diversify lor. for instance, this yr, I am straying away from sg stocks as a whole.

i knew u sure come in and kpkb abt the dividends... calm down man...everytime someone mentions dividends u go crazy

no, i didnt say it's defensive becos of dividends...thats why i put in separate paragraphs..they were 2 separate points..

the fund is pretty defensive in the sense that a large portion goes into consumer staples..

 

[wahkao3]

yea i have something against dividends

 

[Vincent_G]

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.

Why do we consider Platform Fee as normal?? That is just imposed only by FSM (among other internet Unit Trust platform), which I feel it's the way to maximize profit in the long run.. They put up article to justify the platform fee as "trend" in the market and everybody will follow. But, after so many years, there are not much follower (at least in SG).

Don't be trick that Sales Charge is low means you can save money. Platform fee will erode the value away. Most investor into Unit Trust is for long run and not much time to follow portfolio. I have few funds that I hold more than 5 years already. Some I bought through FSM with sales charge of min 2%. They try to impose platform fee even on this existing fund, I quickly run away.

For beginner that plans for long term, you can also look at DollarDex or Phillips POEMS. Their interface is not as good as FSM, but there is no platform fee, although higher sales charge (2%). I found both DD and FSM service are comparable.. (Tips: Psst..You can still use FSM to do your research ;p).

 

[sandwich]

(Tips: Psst..You can still use FSM to do your research ;p).

The guy at the bank was using FSM to show me specs

 

[Keverus]

The guy at the bank was using FSM to show me specs

Which fund? Did u buy?

 

[ahgohgoh]

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.

You kanna same as me -- the one time 3-odd % charge. It is only cheap unless you hold the fund for a long period, i.e. more than 3 years.

I am still evaluating whether it is better to buy from bank (which was what I did) or from platform.

One thing I don't like buying from bank is that they do a risk analysis for you but they are not really experts. They just sell you what they want to sell you, tell you that you will get x % return but actually they don't do enough to explain the technical aspects to you. One of their common trick is that the fund is issuing bonus dividend. But my observation is that once the bonus dividend period is over, the fund price is drop like crazy and you find yourself in the red.

It is still better to invest on your own.

I bought the UOB Emerging Market Bond fund at its peak - Sep 2012. (Oops now you know which bank...) It is a fixed income bond fund. But fixed income took a big, big hit in May last year and I don't think the dividend currently covers the loss. The bank actually called me up in Nov and ask me to sell and buy another fund. They tried to smoke me with QE tapering, but my gut feeling is that nobody is absolutely right about how the market reacts to tapering. And I do not want to give them an opportunity to make me buy another fund and earn the commission. Like I said before, you can only recover the effects of that commission if you hold the fund long enough.

I was also pissed off with the bank when I bought a 2nd fund in April. They asked me to re-sign the papers one week later, saying that they forgot to let me sign the first time but I remembered clearly I signed. Anyway, the fund price rose like crazy during that one week - that was the period the bond price rose like crazy, then fell like crazy then never recovered.
And, again, the 2nd fund paid bonus dividend. Similarly, fund price fell after bonus ended because people sell right after that bonus period.


Two things I learned:
1) Best to invest on your own
2) 上帝要你灭亡， 必须让你疯狂 (refering to bond/share price)

 

[ahgohgoh]

I did a research in June when the fixed income market fell and I was hit quite badly.

At that time, technology and health funds looked good.
Indeed, the returns for past 6-7 months are very, very good. Now, at their peak price. Will they continue to rise? Not sure. But they sure are at their peak price now.

I heard / read middle of last year from Dr Doom to invest in Vietnam. At that time, not performing. Now, Vietnam funds doing not bad. They say Vietnam is the new China for outsourced labour in manufacturing. I think Apple moved or is moving to Vietnam? I think Vietnam worth investing.

 

[Shiny Things]

I see. Other than the buy and sell commission from customers, do banks also get paid by the fund managers?

Oh yeah, I wouldn't be surprised if the fund managers pay distribution fees to the banks. I'm pretty sure this is a thing, but it's Sunday morning and I haven't had my coffee and my brain isn't working yet so I can't be stuffed googling it.

 

[Skurai]

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.

Long story short, it is only good if u pick a fund that is managed by ppl who are that good. In other words, u need to find a good fund.

I know a gd one, poems gems fund though i nvr invest in it. Been to poems seminars and seen them, min 25k iirc and they tend to outperform the sti index for a gd 10 years already iirc.

But sti go down, also they go down. I think they are a long only fund.

 

[bardee]

any recommended books to read on investing in unit trust?

 

[genie47]

any recommended books to read on investing in unit trust?

There is nothing much to read actually. The reason is simple. You are hiring a "contractor" to do the investing for you. You just need to know where they are investing in and how much they charge for investing for you.

 

[noobishyang]

Long story short, just buy from fundsupermart if you are seeking to diversify into UT, it's cheaper, you make your own choices as to what fund you want to put your money on, if you buy from bank, you may think oh wow they are expert, they will give good advise, sorry no, they are only interested in your commission, you buy more they earn more, it's that simple. The only people who are interested in growing the fund is the fund managers, bankers are only interested in commission, understand that.

 

[wahkao3]

Now days, all RSP funds of FSM has 0 sales charge. Only 0.5 percent platform applies for the first 50K investment.

Hence it is 50K*0.005/12=S$20.83 per month at its maximum.

3.5 sales charge can cover 3.5/0.5 = 7 years platform fee.

i think 0.5% platform is moderate

wtf are u sure i have to pay 0.5% per month!!!!??? Works out to be around 6% EAR per year!
This is day light robbery!

 

[wahkao3]

my suggestion is that instead of learning how to buy unit trust, Learn how to buy stocks.

Why bother to have a middle man do it for you when you can do it yourself? For me, researching how to buy stocks is so much easier than researching how to buy UT.

 

[sandwich]

You kanna same as me -- the one time 3-odd % charge. It is only cheap unless you hold the fund for a long period, i.e. more than 3 years.

I am still evaluating whether it is better to buy from bank (which was what I did) or from platform.

One thing I don't like buying from bank is that they do a risk analysis for you but they are not really experts. They just sell you what they want to sell you, tell you that you will get x % return but actually they don't do enough to explain the technical aspects to you. One of their common trick is that the fund is issuing bonus dividend. But my observation is that once the bonus dividend period is over, the fund price is drop like crazy and you find yourself in the red.

It is still better to invest on your own.

I bought the UOB Emerging Market Bond fund at its peak - Sep 2012. (Oops now you know which bank...) It is a fixed income bond fund. But fixed income took a big, big hit in May last year and I don't think the dividend currently covers the loss. The bank actually called me up in Nov and ask me to sell and buy another fund. They tried to smoke me with QE tapering, but my gut feeling is that nobody is absolutely right about how the market reacts to tapering. And I do not want to give them an opportunity to make me buy another fund and earn the commission. Like I said before, you can only recover the effects of that commission if you hold the fund long enough.

I was also pissed off with the bank when I bought a 2nd fund in April. They asked me to re-sign the papers one week later, saying that they forgot to let me sign the first time but I remembered clearly I signed. Anyway, the fund price rose like crazy during that one week - that was the period the bond price rose like crazy, then fell like crazy then never recovered.
And, again, the 2nd fund paid bonus dividend. Similarly, fund price fell after bonus ended because people sell right after that bonus period.


Two things I learned:
1) Best to invest on your own
2) 上帝要你灭亡， 必须让你疯狂 (refering to bond/share price)

yeah, i bought from UOB too. At that time my FD was due for renewal so I thought why not give UT a go as it returns better than FD and is more diverse than stocks.

The historical annual yield for this UT was 5% which seem pretty comparable to high yielding stocks. The downside is the large commission of 3.5% which means the first few months of dividends would go towards recuperating the commission. And i'll have to keep my money in this UT long term to get the benefits.

 

[Keverus]

wtf are u sure i have to pay 0.5% per month!!!!??? Works out to be around 6% EAR per year!
This is day light robbery!

Calm down broseph. The fees is 0.5% per year.

 

[ahgohgoh]

my suggestion is that instead of learning how to buy unit trust, Learn how to buy stocks.

Why bother to have a middle man do it for you when you can do it yourself? For me, researching how to buy stocks is so much easier than researching how to buy UT.

My feel: funds are "diversified" because they consist several things.

Stocks are one company, so higher risk?