The financial meltdown arising from subprime losses may have been the first event in a multi year economy downturn. Property prices are down, foreclosures are up, banks are getting more selective in their loans and stock markets have been on a downward trend.
Is the bear market already upon us? In the near short term, it is highly probable that stock markets are going to continue their downward trend though some bounces will occur when oversold levels are perceived.
Is it time to exit the market and hold cash instead? Cash is king but such downturns are the best investment opportunities for those with spare cash on hand. Pick up stocks with solid fundamentals. During the last downturn, the market darlings were companies with strong balance sheets or a large cash pile to back them up. Blue chips that regularly paid out dividends were also highly preferred because of the stability they accorded. It even spawned unit trusts such as First State Dividend Advantage and SGAM Singapore Dividend Growth.
Pick up stock bargains now. Go contrarian and the rewards will be reap when the economy turns around and fairly valued companies shine through.
Showing posts with label unit trust. Show all posts
Showing posts with label unit trust. Show all posts
Fidelity Multi Asset Navigator Fund
Fidelity Multi Asset Navigator Fund offers not only exposure to bonds, equities and cash, but also property and commodities to improve diversification and enhance performance. Consequently, this mutual fund is able to tap into an array of opportunities globally to which many other funds do not otherwise have access. Such a more diversified asset mix is suppose to reduce the overall risk of the portfolio without forgoing returns. An added draw of the fund is that the asset mix changes accordin to the stages of the global economic cycle. Investors need not perform fund swtiching and are able to hold onto the same fund throughout the cycle, potentially reducing the hassle and costs of investing.
The major asset allocation of this mutual fund is reviewed on a monthly basis but the fund manager is free to change the asset allocation on other days if circumstances dictate and rebalance the positions daily in order to manage cash flows.
The fund is expected to achieve asset reallocation gradually reflecting the slow movement of the economy from one phase to another. While economic models suggest four different portfolios depending on the phase of the economic cycle, the transition from one to the other will be achieved progressively rather than immediately.
This mutual fund is considered to be a low to medium risk investment based on the fact that it will have no less than 30% in bonds and cash at any time and that it also benefits from asset classes diversification. The asset mix will be adjusted to reflect the prevailing trading conditions and the Fund should therefore be more resilient to downside than pure equity-based funds. Investors will do well to note that such diversified funds also typically underperform pure equity-based funds in a bullish market.
It will do well to consider adding this mutual fund to a portfolio to gain added stability. For the more aggressive portfolio, this fund may not fit as well, potential limiting the upside achievable. It may be worthwhile to consider purchasing this fund as a defensive play when the global economic cycle has been expected to have peaked.
The major asset allocation of this mutual fund is reviewed on a monthly basis but the fund manager is free to change the asset allocation on other days if circumstances dictate and rebalance the positions daily in order to manage cash flows.
The fund is expected to achieve asset reallocation gradually reflecting the slow movement of the economy from one phase to another. While economic models suggest four different portfolios depending on the phase of the economic cycle, the transition from one to the other will be achieved progressively rather than immediately.
This mutual fund is considered to be a low to medium risk investment based on the fact that it will have no less than 30% in bonds and cash at any time and that it also benefits from asset classes diversification. The asset mix will be adjusted to reflect the prevailing trading conditions and the Fund should therefore be more resilient to downside than pure equity-based funds. Investors will do well to note that such diversified funds also typically underperform pure equity-based funds in a bullish market.
It will do well to consider adding this mutual fund to a portfolio to gain added stability. For the more aggressive portfolio, this fund may not fit as well, potential limiting the upside achievable. It may be worthwhile to consider purchasing this fund as a defensive play when the global economic cycle has been expected to have peaked.
Low Fee Mutual Funds
Many people had put forward that investors who invest in mutual funds should seek out those that are low cost so that they are not unnecessarily paying for the services of poor performing fund managers. With such an argument, these same people are touting that investing into index funds will be one of the best option available since they are typically low cost.
Is such an investment style justified? After reviewing through the various options, I see that there is no point to deny competent fund managers an equitable renumeration if they are able to deliver value to my investments.
The aim of investing via mutual funds is that risks are diversified and the services of professionals are engaged to manage the funds. Many people expressed dissatisfaction with management fees charged because the funds had not performed up to expectations. This is a justified complaint since no one is willing to be shortchanged when they are paying good money in anticipation of proper returns.
But the truth is that there are mutual funds out there that are very consistently delivering above average returns. Investors just have to do their homework to sieve out these investment gems and invest into them. What harm is there to pay a portion of the returns obtained as renumeration when these returns are not achievable on our own when we have no time to monitor and diversify investments?
Is such an investment style justified? After reviewing through the various options, I see that there is no point to deny competent fund managers an equitable renumeration if they are able to deliver value to my investments.
The aim of investing via mutual funds is that risks are diversified and the services of professionals are engaged to manage the funds. Many people expressed dissatisfaction with management fees charged because the funds had not performed up to expectations. This is a justified complaint since no one is willing to be shortchanged when they are paying good money in anticipation of proper returns.
But the truth is that there are mutual funds out there that are very consistently delivering above average returns. Investors just have to do their homework to sieve out these investment gems and invest into them. What harm is there to pay a portion of the returns obtained as renumeration when these returns are not achievable on our own when we have no time to monitor and diversify investments?
Fundsupermart vs Dollardex
One of the very frequent questions that are asked when looking for a suitable online unit trust distributor is that whether one should choose Fundsupermart (FSM) or Dollardex. This is a question that I had asked myself before and had no real answer for it. However, my choices of investment platform after a period of holding accounts with both somehow pointed in the direction of Fundsupermart.
Why Fundsupermart? Between the 2, Dollardex charges a lower sales charge which immediately translates into cost savings and hence a high investment amount. When it comes to large amounts, such small differences of 1% still constitute a significant sum. Perhaps I have been a small time investor who does not really feel the pinch of the extra amount but more likely, I am more comfortable with Fundsupermart's website and interfaces.
Fundsupermart has a nice homepage that is pleasing to my eyes. Its services had been good, having online forums, portfolio tracking, analysis and even a free quarterly magazine if your investments cross a stipulated amount. Being well established, I have not seen FSM really advertising its services, believing that it goes round through worth of mouth and its reputation.
Dollardex uses a website that is heavy on words and I find it a strain to go through such a wordy site. It has the usual functionalities but lags FSM in that it has no online forums or free magazines. Dollardex also does make use of advertising such as Google Adwords and it is not uncommon to find its advertisements appearing on the Adsense of this page.
Why Fundsupermart? Between the 2, Dollardex charges a lower sales charge which immediately translates into cost savings and hence a high investment amount. When it comes to large amounts, such small differences of 1% still constitute a significant sum. Perhaps I have been a small time investor who does not really feel the pinch of the extra amount but more likely, I am more comfortable with Fundsupermart's website and interfaces.
Fundsupermart has a nice homepage that is pleasing to my eyes. Its services had been good, having online forums, portfolio tracking, analysis and even a free quarterly magazine if your investments cross a stipulated amount. Being well established, I have not seen FSM really advertising its services, believing that it goes round through worth of mouth and its reputation.
Dollardex uses a website that is heavy on words and I find it a strain to go through such a wordy site. It has the usual functionalities but lags FSM in that it has no online forums or free magazines. Dollardex also does make use of advertising such as Google Adwords and it is not uncommon to find its advertisements appearing on the Adsense of this page.
Which one is a better choice? Personally I prefer using Fundsupermart even though it costs slightly more. However, if I get a windfall and have a large sum to invest, I will definitely go with Dollardex in order to gain the immediate cost savings.
DWS Global Agribusiness Fund
DollarDEX has just introduced a new fund, the DWS Global Agribusiness Fund. This Fund is theme-based globally and intends to invest from agricultural commodities to consumer products. It invests into promising companies in land and plantation, seed and fertilizer, planting, harvesting, protecting and irrigation, food processing and manufacturing companies, offering investors the opportunity to capture value at various points along the "food chain".
Consider the following statistics:
Consider the following statistics:
- There are now 80 million new mouths to feed every year.
- By 2030, the United Nations estimates that demand for agricultural products will be about 60% higher than today.
- Developing markets are seeing an increase in annual protein intake of 11% to 15%
- We now have about half the arable land per person that we had 40 years ago.
- In 2030, China's meat consumption will be more than double the 1997 levels of 41kg.
The DWS Global Agribusiness Fund is basically a play on the fact that it is expected to be increasingly difficult to feed the world with the resources we have. Unless something really catastrophic occurs to wipe out much of the human population on Earth, the global population will definitely continue its exponential growth. This growth will encroach onto arable land and eventually reduce the ratio of arable land per person.
The Fund therefore invests into the most basic of the Maslow's hierachy of needs, food. However, it goes one step further to invest along all parts of the agribusiness chain to broaden the opportunities available to be tapped.
The DWS Global Agribusiness Fund presently has a significant exposure to agricultural products and those sectors that deal most directly with its production. This positions the Fund well to reap solid gains from its core theme of "feeding the world". However, it must also be noted that agriculture had traditionally been one of the most volatile industries, exposed to Mother Nature's capricious ways. A pure equity fund, inherently volatile, coupled with the highly volatile nature of the underlying businesses, this Fund potentially belongs amongst the riskier of the choice of equities funds.
I like the theme of this Fund. While it is a risky bet, the fact that it is going to be increasingly difficult to feed the world cannot be denied. It becomes most appreciable to those who live in areas that are lacking in arable land and have to import most of the food required for subsistence. However, this Fund definitely should be held only as part of a well diversified portfolio and the duration of hold should be long term so that the ups and downs can be well ridden out.
Investing in Vietnam: Lion Capital Vietnam Fund
Lion Capital Vietnam Fund will "invest in Authorised Investments which are equities, equity-related instruments (including, without limitation, interests in property funds) and securities in Vietnamese incorporated companies or institutions, as well as in companies or institutions which although not incorporated in Vietnam, have operations in, exposure to, or derive part of their revenue from Vietnam, and the Indo-China Region (which includes, but is not limited to, Cambodia, Laos and Myanmar)."
Vietnam is presently experiencing a boom in its stock market and many people are getting excited about investing in Vietnam. However, such optimism is perhaps dangerous if our bets are not hedged.
Vietnam's stock market is presently still very small and statistically, a small market is inherently volatile and gains in a few good stocks skew the investment numbers. Vietnam is very much just starting to develop and still largely lacks transparency, credible institutions, a functioning financial sector, and clear legal rules and regulations. Investing into Vietnam itself will require the investor to keep his eyes wide open and ears primed for importance information.
I believe that investing in Vietnam is currently a highly speculative move and Lion Capital Vietnam Fund's mandate includes firms with exposure to, or derive part of their revenue from Vietnam, and the Indo-China Region, not just stocks listed there. This will definitely help to diversify the risks somewhat but since it is still primarily a single country fund, it will be prudent to expect a larger degree of volatility.
While the gains are potentially good, the associated risks do put me off taking up the Lion Capital Vietnam Fund at the present moment.
Vietnam is presently experiencing a boom in its stock market and many people are getting excited about investing in Vietnam. However, such optimism is perhaps dangerous if our bets are not hedged.
Vietnam's stock market is presently still very small and statistically, a small market is inherently volatile and gains in a few good stocks skew the investment numbers. Vietnam is very much just starting to develop and still largely lacks transparency, credible institutions, a functioning financial sector, and clear legal rules and regulations. Investing into Vietnam itself will require the investor to keep his eyes wide open and ears primed for importance information.
I believe that investing in Vietnam is currently a highly speculative move and Lion Capital Vietnam Fund's mandate includes firms with exposure to, or derive part of their revenue from Vietnam, and the Indo-China Region, not just stocks listed there. This will definitely help to diversify the risks somewhat but since it is still primarily a single country fund, it will be prudent to expect a larger degree of volatility.
While the gains are potentially good, the associated risks do put me off taking up the Lion Capital Vietnam Fund at the present moment.
SGAM Global Luxury & Lifestyle Fund
SGAM Global Luxury & Lifestyle Fund is an interesting new product that has just caught my attention. Being the first of its kind open-ended equity fund for the Singapore retail market that invests in premium luxury and lifestyle companies on a global scale, it is unique in the concept. However, no matter how innovative an unit trust is, it is still necessary to evaluate if it is just hype or investing in it is truly a good option.
The gap between the rich and the poor has been widening and the rich are getting much richer. This is evident in the emerging markets of China and India where the middle class is growing rapidly and high net worth individuals are also sky rocketing.
Luxury goods are a favourite with those who are recently affluent, helping to reaffirm their successes, and impressive growth in sales for luxury goods have already been noted. SGAM Global Luxury & Lifestyle Fund further has the advantage that demand for luxury goods are usually price inelastic and profits can be maintained.
SGAM Global Luxury & Lifestyle Fund does not appear to fit in with my investment philosophy at the moment and I think I will give it a miss. But it definitely feels good to be owning a piece of companies selling the luxury goods than be the one contributing to the companies' bottomline. It will be interesting to see how SGAM Global Luxury & Lifestyle Fund performs against the benchmark index in time to come.
The gap between the rich and the poor has been widening and the rich are getting much richer. This is evident in the emerging markets of China and India where the middle class is growing rapidly and high net worth individuals are also sky rocketing.
Luxury goods are a favourite with those who are recently affluent, helping to reaffirm their successes, and impressive growth in sales for luxury goods have already been noted. SGAM Global Luxury & Lifestyle Fund further has the advantage that demand for luxury goods are usually price inelastic and profits can be maintained.
SGAM Global Luxury & Lifestyle Fund does not appear to fit in with my investment philosophy at the moment and I think I will give it a miss. But it definitely feels good to be owning a piece of companies selling the luxury goods than be the one contributing to the companies' bottomline. It will be interesting to see how SGAM Global Luxury & Lifestyle Fund performs against the benchmark index in time to come.
Cash Fund by Fundsupermart
Fundsupermart has just recently launch a cash deposit fund by a Prudential Fund Manager. This Cash Fund operates by consolidating monies from investors and placing them in various fixed deposits with several banks. Through such an approach, the Cash Fund is able to obtain a higher net interest rate.
The predecessor to the Cash Fund is the Cash Account and many people had asked if it is sensible to switch over to the Cash Fund which is promising higher returns. I believe that the Cash Fund is worth the efforts but it really depends on the person. Personally, I prefer to keep my existing Cash Account monies as they are and invest fresh funds into the Cash Fund. That way, I will still be able to enjoy the higher interest rates of an almost savings account equivalent and also to gain higher returns for the new injections that are going into the Cash Fund.
For people like me who have been investing, the considerations to go for Cash Account or Cash Fund is largely due to personal situations. However, there still exists a large group of people out there who are happy putting their spare cash on their own into savings accounts and gaining paltry interest. If you are one belonging to the latter, it really is time for you to check out Fundsupermart's offering immediately!
The predecessor to the Cash Fund is the Cash Account and many people had asked if it is sensible to switch over to the Cash Fund which is promising higher returns. I believe that the Cash Fund is worth the efforts but it really depends on the person. Personally, I prefer to keep my existing Cash Account monies as they are and invest fresh funds into the Cash Fund. That way, I will still be able to enjoy the higher interest rates of an almost savings account equivalent and also to gain higher returns for the new injections that are going into the Cash Fund.
For people like me who have been investing, the considerations to go for Cash Account or Cash Fund is largely due to personal situations. However, there still exists a large group of people out there who are happy putting their spare cash on their own into savings accounts and gaining paltry interest. If you are one belonging to the latter, it really is time for you to check out Fundsupermart's offering immediately!
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