During this period of economic downturn, many investors have suffered losses in all types of investments. No matter how diversified their portfolios are, the losses were inevitable in one form or another. The only hope is that there was a good mix of asset classes in there that could have helped to sustain huge losses.
Even for relatively safe investments like unit trust funds suffered. Before this economic crisis hit, many fund houses launched a suite of offshore and equity funds and we were all gamed like hungry investors. For those who have bought many equity funds, you will now see a lot of red in your fund statements. But not all funds are losers, fortunately. The more conservative ones have yielded rather good returns.
In the latest issue of Personal Money, the top 10 and worst 10 unit trust funds in 2008 were tabled and they are as follows:
Top 10 funds in 2008
Bond and guaranteed/protected funds have come out tops last year. And many of us wouldn’t have gone for bond funds as they were less interesting then. Does that now teach us a lesson that amidst all the sexier equity funds, we still need to put some eggs into safer and less sexy assets?
Worst 10 funds in 2008
Needless to say, equities did the worst of the lot, as can be expected. And I think this is where many of us got burnt. Well, perhaps not exactly burned just yet if you are still holding on to the funds. Wait it out, and wait for these funds’ performance to climb again when the economy recovers. After it has gone all the way down, there’s no where else to go but up!
So what kind of funds would you now think about going into? For a year now I’ve been interested in exchange traded funds (ETFs) but never made an attempt to lock in. There are only 3 ETFs in Malaysia so far, which are ABF Malaysia, FTSE Bursa Malaysia 30 ETF (FBM30etf) and MyETF Dow Jones Islamic Market Malaysia Titans 25 (MyETF-DJIM25). I’ve been eyeing the latter for over a year now. Now that the price has come down, it looks like an opportunity to invest.
ETFs slowly but surely gaining popularity domestically and in times like this, they are much safer bets than investing in stocks directly. In fact, today’s article in The Star wrote about them being the safer investments too.
For now, I’m not quite interested in purchasing unit trusts and will most likely make a start in investing in ETFs. What about you? Are you gamed in ETFs too?
{ 8 comments… read them below or add one }
My equity funds lost 30-40% =_= both from PB Mutual
I have some in PB Mutual too and I don’t dare to look at what they are worth now!
I bought PB Mutual for the very first time mid of last year due to high recommendation by friends. I am normally very conservative (prefer FD than anything risky type of person) and look what happen now.. sigh…
Hi, knowing that many investors are losing their money when they invest in PB Mutual unit trust. I am one of them and i loss 50% of my capital.Instead of blaming, I find out why i loss by becoming an agent. After joining, i start to know the reasons of losing up my money. There are a few reasons that i am losing and i am sure that most of you who loss your money are practicing it.
1)Believe in your friend or relative that telling you by investing long term, you would have fabulous gain.
2)You don’t even know your objectives or the reason that you are investing.
3)You don’t understand what you are buying, equity fund, balance fund, bond fund and how this all fund operate itself.
4)You always tell yourself, “Don’t worry, the market will bounce tomorrow, the drop today is just an illusion”. Meaning that you don’t know when to cut loss.
5)When you looking back at your statement, you will just sit there and hold your statement, cursing the agent or the fund manager that make u loss your money, after a few minutes you will ignore it and tell yourself. ” I will wait until it bounce back.”
All of the reasons above is what i am facing before, because i did not study well how the unit trust function and invest blindly without learning it. Please be a smart investor and learn from mistakes, there are ton of agents out there, ask them as many questions as u can before invest, if they are the one, they will not emphasize on sales but they are willing to help you during this down time.
hi, anybody want to ask about why they are loss in unit trust,,and how to making profit, u may ask me at sue_ai4ever@yahoo.com…
Risk comes from not knowing what you doing!!!
When the market going up and up, usually i advice my investor to pull out their money slowly or start switching their fund into conservative type like bond or money market as a temporary parking place.
We all must know that the market is volatile, it will goes up and down that why for those who invest in unit trust must have the holding power for 3 and 5 year above.
For those moderate/conservative investors,
I always recommend for those who interest to invest in mutual fund must have the holding power for 3 years above.
If you cant achieve it, then i recommend you should go for Wawasan or ASN type cause it have capital guarantee and the interest rate are up to 6.8% this year.
Remember investment are always involve monitoring and managing your portfolio. Even for unit trust.
Its your responsible and also your unit trust consultants responsible to manage your portfolio.
If got any doubt please contact me by MSN: mikenyh@hotmail.com
Mike NG
Public Mutual consultant
I am a BIG FAN of UNIT TRUST but I have no experience in investing in Unit Trust in Malaysia apart from my Prudential Policy I have which invested in their own fund. My lack of exposure in Msia Unit Trust Market was due to the Capital Market Restriction in the past where most if not all of the Unit Trust only invest in Malaysia Market until recently (probably 2 years back) where Unit Trust investing in overseas market started in Msia.
I always encourage my relatives/friends to use dollar averaging method to accumulate Unit Trust as compared to timing the market (note that even the smartest will get burn in the market, so timing the market is not a good way of investing).
To a certain extent, I agree with Mike that when market is peaking, it’s good to pull out slowly or even switching to safer instruments but predicting Peak is always not the best way.
Personally, setting a realistic targetted return of say 8% – 10% return may be something which one can adopt in exiting from Unit Trust investment. In addition, having the timeline like what Mike mentioned 5 years is a good practice. If anyone treating buying Unit Trust like punting on stock market, I would suggest the person not to invest as Unit Trust will not have the sudden mark up like shares in the market given many different fees involved such as:
1) Loading fee of 3% – 5%
2) Administrative fee for the Unit Trust
3) Management fee
4) Others.
Happy Investing …..
I’m not that good in investing Unit trust but i bought Public china select Fund two years ago, the price look like no movement although market bound back this year. should i top up to get cheapest price now to average up or buy others?