Shall we share which UT we bought and are you happy with the performance so far? And which UT makes you regret?
I understand the higher cost from UT as compared to ETF investing.
However, UT has their strategy that we individual can't replicate without involving higher costs. As well as them having more investment opportunity than an individual.
So instead of bashing UT being high costs, anyone happy/unhappy so far with their UT?
Personally I'm an income fund fan, which they payout dividend monthly,which I can portion it to fund my shares portfolio monthly.
Jpm income fund
Schroder Asian Income Fund/Singapore
Fidelity Funds - Global Multi Asset Income Fund
Pretty happy with the payouts and the appreciation and quite diversified with the 3.
So here's the thing: it's not true that unit trusts are some magical vehicle that gives you access to strategies that are closed off to mere mortals. If they were, they wouldn't be letting schlubs like us invest in them.
Let's look at the three funds you own.
Have a look at the Morningstar page for the Fido fund - it can't even beat its benchmark, probably because it charges a gigantic 1.67% per year; that instantly puts you nearly 2% behind the benchmark every single year.
So - why not just invest in the benchmark instead? You can do that!
The Morningstar page tells us that the Fido fund's benchmark is "50% Barclays US TR Agg" and "50% FTSE World TR". So if you put 50% in AGG, an ETF that tracks the Barclays US Total Return Aggregate index, and 50% in VWRD, an ETF that tracks the FTSE World Total Return index, you'd have bought the benchmark - and you'd be beating the pants off the Fido fund. You're beating a highly-paid fund manager and you haven't even had to put pants on.
Same goes for the JPM fund. It's available in the US, so we can punch it into Interactive Brokers' handy-dandy Mutual Fund Replicator tool:
The thing you want to look at is the chart at the bottom. The white line is the JPM fund; the brown line is a portfolio of two ETFs that outperforms the JPM fund by nearly six percent a year.
And this isn't some secret, either. The IBKR tool is free if you're an IB account holder. The two ETFs are BSJH, a 2017 corporate bond ETF; and LQD, the big-daddy corporate bond ETF - though if you were doing this in Singapore you'd use SDIG and LQDE respectively, to dodge the US withholding tax.
And look at the difference between those two lines. That's just one year's returns. JGIAX puts you that far behind the market every year.
The Schroder fund seems to be less terrible, but it's basically a coin-flip - it beat its benchmark in 2011 and 2012, missed in 2013 and 2014, and beat in 2015. That's not really distinguishable from a coin-flip; you might as well buy the benchmark (basically AAXJ) and save yourself some money; whether you know it or not, you're paying nearly 1% a year for that undistinguished performance.
Look, the point of all this wordiness is that
unit trusts are in general pretty bad. They basically only exist to line the pockets of unit trust managers (the exception here is Vanguard, which passes all its profits back to the owners of its unit trusts). You absolutely can replicate their strategies yourself, because their strategies are just "buy and hold a bunch of stocks", "buy and hold a bunch of bonds", or "buy and hold a bunch of stocks and a bunch of bonds".
Why would you pay fairly hefty amounts of money to a fancy fund manager for the same performance you could get yourself? To answer your original question: if I owned these funds, I would be pretty darn unhappy with them.
