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!
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!
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)
