With the downfall of Lehman Brothers, the buyover of Merrill and the downgrading of AIG all happening in the US, we are not spared from the losses domestically. With the liberalisation of the unit trust funds some 3 years back, many local fund managers have ventured into offshore funds. Local investors happily hopped onto the bandwagon to be able to invest in overseas funds.
Do you really know the composition of the offshore funds that you have invested into? Check the portfolio of your funds, and see if they are heavily or just marginally exposed to Lehman Brothers, Merrill Lynch and AIG. A good fund manager would be able to quickly address the exposure by swaping the non-performing equities with healthier ones in its mixed basket of stocks.
Most funds tend to buy into stable blue chips and the above mentioned financial institutions were once regarded so. With so many fallouts happening in the last few months, perhaps some fund managers would have taken precaution to move out of these stocks seeing that they are likely to be affected by the subprime mortgage issue, especially if they were buying into the financial markets in the US.
In any case, it’s worth a quick check with your agent if you are unable to find out how the portfolio looks like for your offshore funds. I know for sure some of mine are bought into banks like HSBC and Citigroup in the US, so it’s also time for me to take a look if the fund manager has made changes to the portfolio.
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In the process, unit trust funds enjoy the depth of knowledge and experience that fund manager bring. Trustee
Agreed, that’s one good reason to be buying funds than to trade on the exchange all by yourself.
But as a investor in Unit trust, we must choose the correct Fund house, choose the correct Fund then it only go to the particular Fund manager part