Public Mutual: Public Asia Ittikal Fund & Public Islamic Dividend Fund

Right after exiting my Amanah Saham Didik (ASD) investment position, I split the money and bought into Public Asia Ittikal Fund (PAIF) and Public Islamic Dividend Fund (PIDF). PAIF and PIDF are a couple of unit trust products available from Public Mutual. Public Mutual, as you all know is a division of Public Bank.

The funds I entered are Syariah-compliant, which simply means, it has been approved by the supervising bodies that their investment methods to be in accordance with the Islamic law.

Before investing in these funds, you are assigned a Unit Trust Consultant where he/she will guide you through the whole process. As for me, I got hold of my consultant’s business card from her sister-in-law’s bakery by chance. I called her up and she came to my house.

At the beginning of the process, they’re supposed to explain to you what unit trust is all about, what does Public Mutual offers, why are they better, which funds you should invest in, yada yada yada. I didn’t think she did a good job in explaining, but well… I did invest through her.

One thing to note though. Both these funds charge you a hefty sales charge fee upon entering. How much? A huge 6.5%!!! Yup, 6.5%. If you wanted to invest RM10,000, then they will deduct RM650, leaving you with RM9350 as the starting capital. Effectively, you funds need to at least make 6.96% return to get back to where you started at RM10,000.

[ RM650 / RM9350 X 100% = 6.95187% ]

Take note that the 6.5% sales fee is only charged once. However, there are also annual management fees. For PAIF, the management fee is 1.55% and for the PIDF, the management fee is 1.5%.

When you keep track of the funds’ performance in the newspaper, you’ll note that the price is quoted in its Net Asset Value (NAV). This is the price that you get when you decide to redeem your money (i.e. exit your position).

Public Asia Ittikal Fund (PAIF)

Anyway, below are some of the features of PAIF:

1. Suitable for investors with aggressive risk-profile.

2. Suitable for medium to long-term investors of 3 years or more.

3. The fund invests mainly in index stocks, blue chips, and growth stocks in countries like Malaysia, S. Korea, China, Japan, Taiwan, Hong Kong, Phillipines, Indonesia, Australia, Singapore and Thailand.

4. The fund may also invest in Islamic debt securities.

5. One-time sales charge of 6.5% of your initial investment.

6. Annual management fee of 1.55%.

7. Initial investment of RM1,000 with additional investment in RM100 increment.

8. Exit price at quoted NAV. No other fees are charged when you exit.

9. For Public Mutual, you are able to switch between funds whenever you like but you will be charged RM25 each time.

Below is the performance graph for PAIF. I bought into the fund on 6th July 2007. Up till now, the total return equals 8.87%, just a little over the amount I need to make up for the loss in the initial Sales Charges!

PAIF since bought

Public Islamic Dividend Fund (PIDF)

Below are some of the features of PIDF:

1. Suitable for investors with moderate risk-profile.

2. Suitable for medium to long-term investors of 3 years or more.

3. The fund invests in stocks that offer attractive dividend yields.

4. The fund may also invest in Islamic debt securities.

5. One-time sales charge of 6.5% of your initial investment.

6. Annual management fee of 1.5%

7. Initial investment of RM1,000 with additional investment in RM100 increment.

8. Exit price at quoted NAV. No other fees are charged when you exit.

9. For Public Mutual, you are able to switch between funds whenever you like but you will be charged RM25 each time.

10. The fund distributes the investment returns through annual income.

Below is the performance graph for PIDF. Similar to PAIF, I bought into the fund on the 6th July 2007. Up till now, the total return equals 3.96%. It has not even reached the point of break even yet!

PIDF since bought

What I like about Public Mutual is their capabilities to perform reasonably well over the past years. However, do bear in mind that the global market has gone through a phase of bull market since a few years ago, so the fund managers’ performance could be a bit biased. It’d be interesting to see how they will perform during extremely choppy times.

Till next time folks..

P.S. This post is based on my personal opinion and not a specific advice to anybody. Read the prospectus and exercise your own judgment in choosing which investment vehicles are the most suitable for you.

(Graphs obtained from Public Mutual’s website at www.publicmutual.com.my)

About nadlique

This blog is about the journey of a 28-year-old Malaysian towards financial freedom. This blog was started back when the blogger was 21 years old. However, his journey towards financial freedom had begun way before that. Materials such as investing, business, entrepreneurship, equities, and real estate are presented. The author also posts his thoughts and observations on life in general.

Comments

  1. salam..
    aku suke blog ko ni
    coolness n very informative ~~

  2. salaam.

    terima kasih terima kasih 🙂

  3. Nadlique..its me again..

    The 6.5% sales charge is a standard one to any unit trust fund that available in Malaysia. Unless you investing in an income fund(bond)then the charge would be much more lower.

    Regards,
    Khairil Redzham
    Unit Trust Advisor
    CIMB Wealth Advisors Berhad

  4. Yup, true true. I understand that along the lines, people will still have to make money out of these products, thus the 6.5%.

    For some, the 6.5% can be really high. Even higher than ASD’s rate of return. But of course, these will be averaged out over the long-term.

    Personally, I don’t have much problem with the sales charge. Kalau tidak, macam mana unit trust advisor nak cari makan? Haha.

  5. smart girl u are…haha..

    but…there is a but tau…kita x sapu semua 6.5% tu…consultant get lower than that..nvm

    and onething not to forget…the sales charge means that you are paying for the consultation services n etc…so push n let your consultant to play his/her roles as consultant…while at the same time you as client should monitoring the progress as well…

    in conclusion…you deserve better service (consultation) n the consultant deserve the reward (commission).. WIN-WIN situation..

    Peace…

  6. bercakap tentang servis charge.
    ada berita baru

    The Star

    tahun depan 3% sahaja.
    tapi ejen ada susah sikit la.

  7. That’s great to hear. Just that, that’s only for EPF contributors. For individuals like myself, I’m afraid it’s still 6.5% for equity funds? Correct me if I’m wrong.

  8. Khairil: I know unit trust consultants tak sapu semua 6.5% tu. Hehe. I read it somewhere

    What makes you think that I’m a girl? 😛

  9. By next year the service charge for cash investment will be 5.5%

  10. Thanks for sharing that KakTi 🙂

  11. Servis Caj
    KWSP = 3%
    Wang Tunai = 5.5%

    Kena kerja keras untuk hidup…

  12. PAIF hasnt been doing well lately though..

    honestly i reckon unit trust are suitable for those with low financial knowledge or limited time to monitor their own investments.

    for those with higher level fin knowledge and extra time on their hands, its more exciting and rewarding to enter the stock market directly.

    coz the fees are way too high actually.

    -investPM-
    http://investpublicmutual.blogspot.com

  13. Mutual Fund investment in 2009. Guess it’s a good timing in current economy.

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