I saw an ad in today’s paper about the newest fund in the market by Public Bank – the PB USA Recovery Fund. From what I understand reading the brochure, this is a structured fund and it’s 100% capital protected in Ringgit. This fund aims to capture the economic recovery of the US equity market in the next 5 years.
I downloaded a copy of the brochure but the more I read, the more confused I got. So I decided to call and speak to a warm body. Here’s what I found out about the PB USA Recovery Fund and how it works.
- 100% capital protected in Ringgit Malaysia at maturity
- A closed end fund with an investment tenure of 5 years
- It’s a structured product that invests:
- 90% of the NAV of the fund into domestic bonds and money market instruments
- 10% of the NAV of the fund into S&P 500 options
- It has a callable feature, which means that some targeted returns are set and once these targets are being met, the investment will be called and returns will be paid out to unit holders
- No annual management fees and no service charges
- Minimum investment to start with is RM100,000
I do believe that the US equity market has a great potential upside come 5 years from today when the economy takes a turn for the better. Everything about the fund, especially the promise of zero management fees and no service charges, seem to be attractive. But I’m quite appalled by the minimum investment amount of RM100,000.
But if you have that kind of money, would you go for this fund? If I had all that extra money sitting in a bank in some FDs, I will really consider this fund.
To find out more, you can read the brochure (download it from Public Bank’s fund info page) for detailed technical explanations of how this fund works.
{ 12 comments… read them below or add one }
Here’s how it’ll work:
They’ll take your money, go to US of A, visit Disneyland and Disney World just like that Javanese guy n family and you’ll recover whatever that’s left.
If I have that kind of money, I’ll go to Disneyworld myself.
Happy investing!
Haha, you do have a funny take on this, Ram.
Well, economic recovery of the USA is surely interesting, however I’ve heard of the future potential of the Greater China. So why don’t you consider Public Mutual’s China funds, or at least the Far-East ones?
I’m already in the China and Far East funds. The China recovery story is rather strong, I must say.
Wow, impressive I should say. For me, I’m in for Public China Select Fund and Public Regional Sector Fund. Both are aggressive greater china and far-east funds, which are almost the same.
I’m still new with all these investments techniques and will try to learn more. I’ve read about the post of yours regarding all the commotion of ASW, and I have to say I strongly agree.
Right now, I’m thinking of investing into an islamic equity fund because islamic funds ’somehow’ can bring positive returns, medium term or long term. Am considering Public Islamic Opportunities Fund or Public Islamic Sector Select Fund. I welcome your comments =)
Like the concept a lot! Buffett says buy when markets are pessimistic, so this product really works for me. Tenor of 5 yrs also sounds about right.
The DCA is rahter interesting too because it protects against downside.
Penny, what are your thoughts on the DCA?
It looks like a bond fund more. See the investment strategy…
90% of the NAV of the fund into domestic bonds and money market instruments
10% of the NAV of the fund into S&P 500 options
CK, I’m no expert in investments, so do take what I comment with some caution. I personally have units in Islamic bond funds and I have been satisfied with the returns on those funds.
Interesting, I’m definitely for DCA. In fact, I think this is one of the better times for us to do so seeing that the market is not at its peak.
Lost, hmm…I wouldn’t really classify it as a bond fund even though the largest proportion of the NAV are invested in bonds and money market instruments. But that’s just my personal take on this.
i had invest in Public China Ittikal Fund on Disember 2008. That time, the market was so down. But, now i get return 40% just only for 6 month. Great isn’t it?
That’s very good for you! Inspiring for others to invest wisely.
I personally do not like the words of “capital protected/capital guarantee”, for me this is conservative and it mean low return to me.
Bond fund are only suitable for elder or those who retire with lot of money do not know where to put.
Remember Bond with 3~5% return per year are not enough to hedge our main enemy “INFLATION” which usually more than 5% per year.
Bond fund / Money Market are good as a temporary parking place before you decide to aim for another good fund.
Most of the fund have grow more than 40% since Jan 2009.
But for me, now are not too late to invest althought it had grow 40%.
Choose the correct fund, choose the fund not only had proven itself in the past but also has the opportunity to grow.
Another thing, it is always good to focus just 1 or 2 fund at a time. It will turn messy if you do not know how to manage your portfolio and do not have enough CASH to manage it.