Personal Finance - Investments

Been trying out different investment products lately, I'm still a beginner in most of these fields.

Equity Unit Trust Funds - It really depends on the KLCI overall market as well as the global economy if you've invested in funds with foreign exposure. I have personally lost 5% in the unit price movements on top of the initial 5% front load fee. So I lost about 10% of my investment over 9 months period. Been doing dollar cost averaging method but still making losses.

Money Market Unit Trust Fund - I've switched over from FD to this product since May18, it is giving average 3.6% per annum return with no fees and no minimum holding period. The only con I can think is that it takes a week for them to withdraw into your account. Overall, I think it is better than 1 month rolling FD. The other thing that can beat this product are those savings accounts giving 3.6% per annum if you maintain a minimum of RM50k.

P2P Lending - It is giving 12% per annum lending money directly to SMEs. The website claims that the default rate is only 1%, so you'll still earn if this rate remains consistent. The P2P platform will take a small cut upon repayment by borrower, in exchange, the platform reviews the risk of the investments. I only invested a little bit into this as it is quite new type of product.

Crypto Currency Mining - I bought a GTX 1080 TI Graphic Card back in Sep17 last year for RM3.5k, if I include the other computer components it came to a total about RM7k for the rig. I managed to withdraw RM2.5k from the crypto wallet for 12 months of mining. Mining became very much less profitable in Sep18. And the highest bid price for the graphic card is now RM2.2k. Initially I planned to recover the full cost of the rig within 2 years, but now it seems like I can only recover 35% of the cost. In the mean time, I'm just going to keep this rig because mining is not its only purpose.

Precious Metals - The best physical item to buy seems to be UOB's 1oz gold coin, it has a spread of 3-4% and it is only 4% above spot price. This is much lower compared to those at jewelry shops that sell 20% above spot. Second place seems to be Public Gold, Maybank's Kijang Emas or Canadian Maple Leafs from online retailers. It was Robert who kept preaching about precious metals that influenced me to invest in this. Along the way, I learnt to use MS Excel's Get Data from Web tool, it enables me summarise the prices from various sources into a single worksheet.

ASNB Advertisements

I was at Maybank and I saw an ASNB advertisement and their consistent distributions of 6-8% per year. Looked attractive at first, but it took me a long time to realise that distribution does not equal return. ASNB has 2 types of funds - which are fixed priced and variable priced.

Fixed price will always be priced at RM1 per unit, but the actual value of the fund may be higher or lower depending on the value of the underlying companies that the fund invests in. For the past 3 years, funds investing in our Malaysian share market were not doing so well. When my Public Mutual fund was only making me 2-3% per annum for the last 3 years, I felt strange that ASNB's funds could deliver consistent 7% per annum. So I went to have a look at one of the annual report for ASNB's fixed priced fund. It turns out that the equity per unit of the fund is only RM0.70, hence the RM1 price tag makes that fund overpriced.

ASNB's variable priced funds aren't so bad, cause they at least are able to disclose their funds' returns along side the distributions. You see, in a good year, the performance of some funds have seen 20-30% growth while some years it may even make losses. For one of ASNB's variable priced funds, the distribution seems consistently positive every year, but the returns fluctuated like crazy.

Distribution is like taking what is rightfully yours, and saying that it is yours again. If someone gives you something that is already yours, its not giving, its just a trick, a marketing trick. It is the same concept for dividends given by companies, but difference is that dividends will reduce a company's capital, which is good when a company is not thinking much about expanding.

What matters more than distributions, I believe are the returns, which is dependent on the performance of the underlying companies that the funds invests in. Unfortunately, ASNB has chosen to emphasise on distributions instead of actual fund returns in their advertisements.