UT Managers deserve payment?
I came across to this letter from USJ forum...
Might be interesting to share with more people.... :-)
pcyeoh
25-08-2004, 01:44 AM
Unit trust managers deserve payment
Peter Chang
Aug 24, 04 3:52pm
Source: http://www.malaysiakini.com/letters/29434
Peter Chang
Aug 24, 04 3:52pm
I refer to the letter by Ng Shu Tsuing entitled Unit trust funds a gamble.
He says: “My father, who is against unit trust funds, says: ‘Why should I let fund managers manage my money for me? Despite lacking in business and finance knowledge, I can just invest it by myself and outperform the KLCI anytime.’”
The question is, how many people can actually do that?
I do not understand why there is all this hoo-ha about the 6.5 percent up-front service fees charged by the unit trust funds company. Is this a lot to pay a professional? We are talking about professional fund managers after all.
From what I know, they have to buy analytical reports from research houses – both local and foreign - make analyses using analytical tools which may be bought at a hefty price, give reports to investors at least twice a year, and set up a company which is investor-friendly to help the investor achieve his financial goals more effectively.
I, for one, have benefitted from investing in unit trust funds. I started investing in 1987 at the rate of RM50 per month until 1993. Then I ceased payments.
My total investment outlay is RM3,600. Would you believe that my investment is now RM17,700? This works out to be a hefty 360 percent returns, after deducting the service charge of 6.5 percent.
At the same time, I am also covered with an insurance of RM50,000 at an annual premium of RM170 only. What is 6.5 percent spread over 17 years? Wouldn’t you mind sharing 6.5 percent with someone who helps your money grow without you fearing of losing your investment?
Also during the same period, I invested in an endowment insurance with a protection of RM10,000. I paid my annual premium of RM601 from 1984 to 1997. But when I surrendered my policy in 1997, would you believe that I lost an additional RM64. Why is this so?
Personally, I would recommend that the charges we should really be worried about are those charged by insurance companies. Look at your own policy, are you getting a fair deal?
Secondly, please question the banks about services charges. Can you imagine that to close a bank account we are being charged at RM10 and to use the ATM we are either charged RM8 per annum or 50 sen after more than four transactions.
Also, how many consumers question the property management companies about the 10 percent interest charge for the late payment of maintenance fees?
Do anyone question the professional fees charged by doctors, especially specialists, and lawyers? I, for one, would be very interested to meet such a person.
With the scenarios stated above, I feel that it is quite okay that some fees be charged by the unit trust fund managers for managing our funds. As the saying goes, there’s no such thing as a free lunch!
But I would appreciate it if fund managers in Malaysia reduce their up-front service charges as this will definitely be an advantage to small but regular investors like me.
He says: “My father, who is against unit trust funds, says: ‘Why should I let fund managers manage my money for me? Despite lacking in business and finance knowledge, I can just invest it by myself and outperform the KLCI anytime.’”
The question is, how many people can actually do that?
I do not understand why there is all this hoo-ha about the 6.5 percent up-front service fees charged by the unit trust funds company. Is this a lot to pay a professional? We are talking about professional fund managers after all.
From what I know, they have to buy analytical reports from research houses – both local and foreign - make analyses using analytical tools which may be bought at a hefty price, give reports to investors at least twice a year, and set up a company which is investor-friendly to help the investor achieve his financial goals more effectively.
I, for one, have benefitted from investing in unit trust funds. I started investing in 1987 at the rate of RM50 per month until 1993. Then I ceased payments.
My total investment outlay is RM3,600. Would you believe that my investment is now RM17,700? This works out to be a hefty 360 percent returns, after deducting the service charge of 6.5 percent.
At the same time, I am also covered with an insurance of RM50,000 at an annual premium of RM170 only. What is 6.5 percent spread over 17 years? Wouldn’t you mind sharing 6.5 percent with someone who helps your money grow without you fearing of losing your investment?
Also during the same period, I invested in an endowment insurance with a protection of RM10,000. I paid my annual premium of RM601 from 1984 to 1997. But when I surrendered my policy in 1997, would you believe that I lost an additional RM64. Why is this so?
Personally, I would recommend that the charges we should really be worried about are those charged by insurance companies. Look at your own policy, are you getting a fair deal?
Secondly, please question the banks about services charges. Can you imagine that to close a bank account we are being charged at RM10 and to use the ATM we are either charged RM8 per annum or 50 sen after more than four transactions.
Also, how many consumers question the property management companies about the 10 percent interest charge for the late payment of maintenance fees?
Do anyone question the professional fees charged by doctors, especially specialists, and lawyers? I, for one, would be very interested to meet such a person.
With the scenarios stated above, I feel that it is quite okay that some fees be charged by the unit trust fund managers for managing our funds. As the saying goes, there’s no such thing as a free lunch!
But I would appreciate it if fund managers in Malaysia reduce their up-front service charges as this will definitely be an advantage to small but regular investors like me.
Source: http://www.malaysiakini.com/letters/29434
posted by GAM Ida Azerin at 4:07 PM
