Archive for the ‘Unit Trust’ Category
CPF-linked funds post 6.6% loss in Q2: Lipper
Posted by: admin in General, Unit Trust on August 26th, 2010
Performance mainly dragged down by losses of global equities-linked funds
By JAMIE LEE
(SINGAPORE) Funds registered under the Central Provident Fund investment scheme (CPFIS) suffered an overall loss in the second quarter of this year, reversing from slight gains in Q1, as uncertainty over the eurozone debt crisis and the US economy took hold.
The overall performance of the 334 funds - 156 unit trusts and 178 investment-linked insurance products - licensed to tap CPF savings fell 6.55 per cent on average in the three months ended June, data from fund research firm Lipper shows.
Their performance was mainly dragged down by losses sustained by funds linked to global equities.
By comparison, in Q1 the funds posted a marginal overall gain of 1.53 per cent, with unit trusts gaining 1.9 per cent on average and investment-linked insurance products (ILPs) gaining 1.19 per cent on average.
But unit trusts posted an average loss of 7.27 per cent in Q2. Of these mutual funds, those linked to equities posted the biggest loss, higher than those linked to mixed assets - a mix of equities and fixed-income securities - and bonds.
Equity-linked trusts lost 8.63 per cent on average, while mixed-asset funds were down 5.09 per cent on average.
Funds linked to bonds posted a modest overall gain of 0.9 per cent.
Despite the poor showing by equity-linked unit trusts overall, CPFIS mutual funds linked to equities in Thailand, Malaysia and India took the first three spots among the top-performing asset classes in the first half of the year.
Unit trusts linked to Thailand shrugged off the political crisis there in May to post a 9.63 per cent return.
Insurance-linked products (ILPs) lost 5.89 per cent broadly in Q2. Those linked to equities posted an average loss of 8.23 per cent, while those exposed to mixed assets had a negative average return of 4.2 per cent.
ILPs linked to bonds fared best, gaining 1.42 per cent in Q2, while those linked to the money market - which refers to fixed-income markets with an average residual life to maturity of under a year - returned just 0.08 per cent.
For the first half of 2010, CPFIS funds linked to bonds were the clear winners, posting an average gain of about 2 per cent.
Funds tied to the money market followed with an overall gain of less than one per cent.
In the six months ended June, equity-linked funds posted a loss of about 8 per cent, while mixed asset-linked funds saw a negative return of about 6 per cent in the same period.
Some 3,000 Singapore-based funds posted a 6 per cent drop in total net assets in the first half, taking the fund size tally to just over $4 billion, data from Lipper for Investment Management shows.
Source: Business Times
The choice is yours: CPF
Posted by: admin in General, Insurance, Unit Trust on March 29th, 2010
SINGAPORE : Should the CPF Investment Scheme be stopped so that members will not risk losing their retirement nest egg?
Yes, thinks a resident who claimed that he had lost some $350,000 in his CPF account after investing in shares under CPFIS.
The Lengkong Tiga resident, who identified himself as Mr Goh, said during the ministerial dialogue on Sunday that he only got back $35,000 eventually but did not say if these were the gains from the investments or the amount he could withdraw from his Ordinary Account (OA) on top of the Minimum Sum.
He also did not say how he lost the sum and whether the investments spanned a few years.
MediaCorp understands that members can only invest up to 35 per cent of their money in their OA in shares.
Mr Goh said he had suggested to the CPF Board to stop allowing members to invest in shares but staff had replied that it was his personal choice to make the investments.
Second Minister for Finance Lim Hwee Hua said she agreed with the CPF Board’s stance, adding that there had been “a lot of demand” for the Government to allow members to invest their CPF money before the CPFIS was introduced.
She quipped: “I’ll convey your feedback to the CPF Board but I’m not quite sure the rest will agree that we should stop the scheme.”
The latest performance numbers of funds under the CPFIS released earlier this month pointed to a solid year.
According to Lipper, the funds tracking company under the CPF Board’s guidelines, the average return of CPFIS—included funds, unit trusts and investment—linked insurance products (ILPs) rose 38.62 per cent last year compared with the same period a year ago. — TODAY
CPF warns: Stiff fines for rebate scams
Posted by: admin in General, Unit Trust on January 2nd, 2010
By Lorna Tan, Senior Correspondent
CENTRAL Provident Fund members have been warned they face fines of up to $10,000 if they take part in a scam that has just come to light.
The CPF Board issued the stern warning after a report in The Straits Times yesterday exposing a practice adopted by unscrupulous financial advisers who plunder members’ CPF investment funds.
Some CPF members who are desperate for fast cash have agreed to take part in the scam, which involves the rapid buying and selling - or ‘churning’ - of investment products using CPF money.
The members dip into their retirement savings to buy and sell investment products under the CPF Investment Scheme - and in doing so they become eligible for cash rebates used as a carrot by errant financial advisers.
The advisers get to pocket healthy commissions.
CPF rules prohibit members from pocketing such cash rebates. All gains or rebates from CPF investments must be put back into members’ CPF accounts, to ensure they have enough for their golden years.
A CPF Board spokesman said: ‘CPF members found guilty of working with errant financial advisers to pocket cash rebates which amount to premature withdrawals of CPF monies may be fined up to $2,500. For second or subsequent convictions, the fine may be up to $10,000.’
The scam typically involves frequent buying and selling of unit trusts and investment-linked insurance policies for no good reason. In the process, the customer gets hit with charges while the financial adviser pockets extra commissions. Over an extended period of churning activity, the customer suffers as the savings in his CPF account - used for the transactions - inevitably dwindle, particularly in a falling or flat market.
Advisers typically entice CPF members to ‘churn’ by investing their retirement funds in return for monthly cash rebates. In most cases, CPF members are given blank forms to sign, authorising the advisers to transact these products on their behalf.
The cash rebates come from the sales charges tied to each transaction. The sales charge works out to 2 per cent to 3 per cent of the sum invested, of which the customer receives a cut. The balance is pocketed by the adviser, a person who may have introduced the member to the adviser, and the investment firm.
Singapore Insurance Institute council member, Mr Stanley Jeremiah, urged CPF members to be more careful about safeguarding their retirement funds.
‘People should be aware that by participating in churning they are cheating themselves because they are dissipating their retirement funds and committing a criminal offence,’ he said.
Mr Jeremiah said that even if a CPF member wants to take a chance, he would be making a big mistake because if he is caught, the penalties would be bigger than most of the cash rebates. With continued churning, the fines can be very substantial.
This article was first published in The Straits Times.
Source: AsiaOne Business
Unit Trust fees SLASHED!
Posted by: admin in Unit Trust on January 2nd, 2010
DBS, Fundsupermart among those which now charge just 1%
A PRICE war seems to have broken out in the unit trust industry in Singapore, with at least three fund distributors now slashing their sales charges to just 1 per cent.
DBS Bank started the ball rolling in early October when it cut its sales charge on all unit trusts to 1 per cent - a move the bank says has already resulted in a two-fold increase in unit trust sales.
Last Tuesday, online fund distributor Fundsupermart.com reduced its sales charge for its 11 best performing funds over a period of three years to 1 per cent.
And The Straits Times has learnt that even though it has not advertised this, Standard Chartered Bank (Stanchart) is also offering a 1 per cent sales charge to selected customers quietly.
Unit trusts are typically sold by banks, insurers, stockbrokers and other independent financial advisers.
These distributors levy an upfront sales charge, which is deducted straightaway from the principal amount an investor puts into a unit trust.
Read the full story in Saturday’s edition of The Straits Times @ Dec 19, 2009
By Sylvia Paik
Fools rush in, or the early birds catches the worm?
Posted by: admin in General, Unit Trust on May 12th, 2009
To quote an article by IFast in Fundsupermart.com,
“However, we have recently seen a change in sentiment and increasing investor risk appetite, and this has benefited most equity funds and even higher-risk fixed income funds.”
There’s certainly a hint of optimism among the investors out there. Being a forward looking individual like myself, the storm will eventually subside as they always do. Unless you’re talking about the end of the world that is..
Is it still safe to be in “safe” funds now?
Posted by: admin in Unit Trust on May 11th, 2009
Have you realized that the Bond Funds prices has been consistently dropping lately?
The Insider understands that Equity and Bonds generally in opposite directions to each other, like a magnet’s South pole and a North pole. The big difference is that the Equity fund is a bigger “magnet” then the Bond fund.
So we see how the Equities, a.k.a. the Stocks, have a BIG influence in how the Bond funds would react.
I took a couple of Bond Funds to compare against a popular Equity Fund, the DWS China Equity Fund in the past 6 months. Do you see the “magnetism” between them?
bonds movement against the equity fund
I don’t think anyone would like to be invested on a fund that is dropping, but channelling 20% of your investment into an Equity Fd for a small start could be rewarding in the long run.
How will the H1N1 virus affect the global market
Posted by: admin in General, Unit Trust on May 4th, 2009
Just when the world market looking set to recover, the H1N1 crisis is causing concern around the world. It is still early to say how it would turn out, but a good indicator of how it would affect the market is to look back at how the world deals with SARS and other past pandemics, as highlighted in the report by the author of AMP Capital Investors. Click on the image to see the report.
SARS in 2003
Here’s the short of it:
- There might be short term volatility
- Unlikely to be a major impact on the share market
- SARS didn’t really eventuate, economic impact was modest although it caused some volatity in the market
What should you do now?
MohdKhair.com feels that it may not be a good idea to get aggressive on your investment now, but being 100% in conservative funds may cause you to lose out on strong gains when global market eventually recovers. It usually comes quicker than we can react.
Why do we see stocks picking up while RECESSION is still all over the news?
Posted by: admin in General, Unit Trust on April 27th, 2009
Why does the stocks sky-dived when the economy was going strong, and why lately does it seems to defy gravity when it’s still doom and gloom in the economy?
An Insider understands that stocks movement is the first indicator of the direction of economy. In the process, it also dictates the fall of the property market as we are experiencing right now.
Stocks trend first indicator of the economy (source).
Unit trust investors have seen an average spike of 30% return back then when the world recovers from the Asian Financial crisis. Though no-one truly knows when will be the start of the recovery until it is too late, we have seen a sustained growth over 6-8 months after the Asian Financial Crisis was over.
Question is, will you be one of them who will catch the wave?
The Secrets of Investing in Unit Trust
Posted by: admin in Unit Trust on April 9th, 2009
There are 3 common strategies used in unit trust investment.
1. Dollar Cost Averaging
Regularly invest a fix amount in a unit trust fund regardless of market trend is called the Dollar Cost Averaging strategy. The actual market performance is fluctuating. When the equity market is high, you buy fewer units with the same amount. When the market is low, you buy more units. For long term, you will get much more unit in the lower price range.
2. Portfolio Re-balancing
Portfolio re-balancing is the process of bringing the different asset classes back into proper relationship following a significant change in one or more. More simply stated, it is returning your portfolio to the proper mix of stocks, bonds and cash when they no longer conform to your plan.
Example:
You start investing 50% in equity and 50% in fixed income fund.
1 year later, the equity rises and now your portfolio consists of 80% equity and 20% fixed income fund. To re-balance your portfolio, you should sell 30% of your total fund in equity and invest it in fixed income fund so that the portfolio is maintained. This is the simple principle of buying low, and selling high.
3. Switching
Switching will lock in the gain you made in your unit trust investment. When you are making profit from an equity fund, you can switch it to some lower risk fund to lock the gain instead of selling it for cash. When the market turns low, you can switch it back to equity fund.
Stocks losing momentum in falling?
Posted by: admin in Unit Trust on April 3rd, 2009
Source: Dollardex
Lately, I observe that the downtrend is starting to lose momentum. I’m beginning to see some positive returns in some of my account holders’ portfolio, especially them who opt into DWS China and DWS Noor Precious Metal. By chance or not, the gainers among these account holders are on the IFAST RSP account. RSP is short for Regular Savings Plan. It’s a great plan if you would like a potentially higher return than your average fixed deposit but not taking too much risk. More about RSP in the future articles.
Summary of Customers' Profit & Loss (Adviser's view)
Oh, if you’re wondering what’s Pru Global Balanced Fund doing up there, it’s one of the current funds that I’m looking into. You may want to switch into that if you’re currently fully invested in Bonds fund.