In the year ending Nov 30th, 2007, A** Equity Fund had 92.6% in Equities. That time, the index was 1,396.98. 1 year later, when KLCI is at 866.14, A**'s Equity Fund's equity exposure drop to 42.5% ! Isn't that "buy high, sell low"?
Put it another way, the summary is as below:
Date ------------------- KLCI ---------------A** Equity Fund's Equity Exposure
30th Nov 2007 --------1,396.98 ---------------------------92.6%
30th Nov 2008 ---------866.14 ----------------------------42.5% !!!
Shouldn't it be the other way round? And if the fund manager can't time the market (which i believe nobody can), shouldn't A** Equity Fund maintains as an "Equity" Fund with 70% to 90% in Equity? Having 42.5% in Equity is less than what a balanced fund is putting! And having 42.5% in Equity when prices are low is even more unexplainable!
Please explain this when i can't see any logical reasons for it (other than the fund manager having "buy high, sell low" syndrome, or join the herd mentality to be fearful when prices are low or trying to gamble the market's direction).
And in year 2009, KLCI earned 44.7% while A** equity fund earned less than 2/5 of KLCI's return! And the annual report don't even mention the reason for such poor performance! If the unit holders are truly the owners of that fund, don't they deserve an explaination for such poor performance?
And please don't say that A**'s equity fund return of 17.5% is better than FD! If you travel from Penang to Singapore by flight, and reach there after 7 hours (when other air planes can reach within 1 hour), do you accept excuse as "At least our flight is faster than going by car" ?
As a result, A** under perform KLCI during these times. Am i right to say that? If that is so, then what's the point of hiring A** as the fund manager for their equity funds? Might as well they just buy the Index or ETF and save the 1.5% management fees, and don't earn a return WORSE than KLCI (not to mention savings on the huge upfront service charge, or ended up being tied up to the terrible fund for 6 years to enjoy 0% service charge).
And also, please don't say A** equity fund beat benchmark since launch. The comparison is simply not fair because KLCI doesn't include dividends into their price. Had KLCI add between 3% to 4.5% yearly dividends to the price, A** Equity fund would under perform by a wide margin!
Waiting for an explaination for me to explain to my unhappy clients.
Date ------------------- KLCI ---------------A** Equity Fund's Equity Exposure
30th Nov 2007 --------1,396.98 ---------------------------92.6%
30th Nov 2008 ---------866.14 ----------------------------42.5% !!!
Shouldn't it be the other way round? And if the fund manager can't time the market (which i believe nobody can), shouldn't A** Equity Fund maintains as an "Equity" Fund with 70% to 90% in Equity? Having 42.5% in Equity is less than what a balanced fund is putting! And having 42.5% in Equity when prices are low is even more unexplainable!
Please explain this when i can't see any logical reasons for it (other than the fund manager having "buy high, sell low" syndrome, or join the herd mentality to be fearful when prices are low or trying to gamble the market's direction).
And in year 2009, KLCI earned 44.7% while A** equity fund earned less than 2/5 of KLCI's return! And the annual report don't even mention the reason for such poor performance! If the unit holders are truly the owners of that fund, don't they deserve an explaination for such poor performance?
And please don't say that A**'s equity fund return of 17.5% is better than FD! If you travel from Penang to Singapore by flight, and reach there after 7 hours (when other air planes can reach within 1 hour), do you accept excuse as "At least our flight is faster than going by car" ?
As a result, A** under perform KLCI during these times. Am i right to say that? If that is so, then what's the point of hiring A** as the fund manager for their equity funds? Might as well they just buy the Index or ETF and save the 1.5% management fees, and don't earn a return WORSE than KLCI (not to mention savings on the huge upfront service charge, or ended up being tied up to the terrible fund for 6 years to enjoy 0% service charge).
And also, please don't say A** equity fund beat benchmark since launch. The comparison is simply not fair because KLCI doesn't include dividends into their price. Had KLCI add between 3% to 4.5% yearly dividends to the price, A** Equity fund would under perform by a wide margin!
Waiting for an explaination for me to explain to my unhappy clients.
__________________________________________________________________
Lesson Learned:
Don't find mechanic regarding your health.
Don't find doctor regarding legal issues.
Don't find investment companies for insurance.
Don't find insurance company for investments. They Suck!
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6 comments:
Hi Peter,
How on earth would you know when they sold their position and when they bought? Perhaps they sold at the peak and that's why the shareholding is so low at the trough? i think ur assessment is grossly superficial (based on just what you wrote). i'm not an investment linked fund manager nor sales person, but i still think u need to manage your criticisms.
Hi Leon,
If they sell at high (and thus thereby reduce the equity allocation from 92.6% to 42.5%), then the drop in unit price would be half of the market's drop, since only 42.5% is in Equities.
Their Unit Price as at 30th Nov 2007 - RM 1.623. 1 Year later, - RM 1.198. So, the unit price drop 26.2% , or 69% of the total drop of KLCI.
Put in in perspective of KLCI, they have 69% of KLCI's drop, which means they should be gradually reducing their Equity exposure as the market drops and drops.
If that isn't selling lower and lower, then what is this?
Also from your reply, it's pretty obvious you can't differentiate between "Investing" and "Speculating".
Here's a tip: Guessing the market's direction is not INVESTING. And that is true even if your guess turns out to be right!
If you disagree, you're always welcome to go to Casino and bet the outcome of each game. I would be happy to own the Casino instead.
I'm not an employee, and neither do i work for money (since my money works for me) but i still think you shouldn't give advice about Squash to Nicol David, especially when you suck at Squash!
This blog is meant to educate the public and not to critisize each other. If you don't know (provided that you know that you don't know), ask politely, and i'll answer. Otherwise, you're always welcome to "x" this window.
Save your time and agony (not to mention mine too!).
Hi Peter,
well said.Regardless of your assessment is superficial or not(which i doubt is)there should be a explaination.
Thank you Terence.
I wonder how much money/wealth you've got to qualify you to educate the public. And who on earth said guessing the market is 'Investing'? Being Warren Buffett and pretending to be Warren Buffett are 2 extremes dude. And yep, I shall x this page.
Come to think of it, i don't see any benefit to you for me to disclose my wealth. The only thing i can think of, is to create more jealousy or discontentment on your end.
And i don't see any benefit how disclosing my assets can help to educate the public. It's better i write on how i acquire my wealth (the process), rather than telling the how much i have (the end results).
Should you insist, i can tell you that :
1. My wife is a full time housewife.
2. My income is enough to take care of my wife, my son, myself and assist to help out both my parents financially, with allowance given to my in-laws as well.
3. Should i stop working today and put my entire wealth under the blanket, i can survive for more than 10 years without job.
4. If my family's expenses were to double, my passive/ investment income is enough to sustain for the rest of my family's life.
5. Other than a small portion of money, we don't have any inheritance.
Even saying the above, it still doesn't proof where/ how i obtain my wealth. So, i wonder what's the point of you knowing my wealth?
Does it proof anything?
And lastly, though i idolise Buffett, I never want to be or pretend to be him. I simply want to be myself, Peter Lim.
I don't see a point living a person's shadow.
Should you want to have any further comments that isn't related to educating the public, stop wasting your time (and so is mine). Thanks!
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