What happen?? So far only RM2.5b of the RM10b subscribed after much hyped about the fund at the beginning. LOL

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) has extended the Amanah Saham 1Malaysia (AS1M) subscription allocation to ethnic groups to Dec 31, 2009.

PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman said the decision to extend the allocation ratio was to provide extra time for people from all ethnic groups to invest in the fund.

The investors of AS1M came from various economic backgrounds including medium and low-income earners, he said in a statement on Oct 1.

“I hope everyone would take this opportunity to participate in this AS1M fund by opening a new investment or making an additional investment,” he added.

AS1M, a fixed price fund with a size of 10 billion units, was launched on July 31, 2009 by Prime Minister Datuk Seri Najib Tun Razak.

It is open to all Malaysians with an allocation of 50% for bumiputeras, 30% for Chinese, 15% for Indians and 5% for other ethnic groups.

As of Sept 27, more than 2.5 billion units had been subscribed by 165,661 investors.

Hamad Kama Piah also said Amanah Saham Nasional Bhd (ASNB) would be conducting investment seminars, focusing on AS1M in selected locations nationwide beginning this month. — Bernama (Read more inside ..)

Schemes according to Maturity Period:
A mutual fund scheme can be classified into open-ended scheme or close-ended scheme depending on its maturity period.

    Open-ended Fund/ Scheme
An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity.

    Close-ended Fund/ Scheme
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices.

Schemes according to Investment Objective:
A scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment objective. Such schemes may be open-ended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows:

    Growth / Equity Oriented Scheme
The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.

    Income / Debt Oriented Scheme
The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.

    Balanced Fund
The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds.

    Money Market or Liquid Fund
These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods.

    Gilt Fund
These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes.

    Index Funds
Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc These schemes invest in the securities in the same weight-age comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme.
There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

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We cannot view a mutual fund unit like a share. There is no 'saturation point' as far as the growth of the Net Asset Value of a fund is concerned. An individual stock may get over valued if its price shoots up, but that is not the case with a unit trust.

Now, let's look at the NAV. 

Basically, it is irrelevant how high or low the NAV of a fund is.Let's say you want to invest RM 5,000. Irrespective of which fund you invest in, this amount stays constant. Now let's say that your choice is restricted between two funds with identical portfolios. Since they both have identical portfolios, their value will increase in the same proportion. You may buy the units of one fund at a higher price than the other. But, the percentage increase would be the same. Hence, your investment of RM 5,000 will increase by the same percentage, irrespective of the fund you invest in. So the number of units you get as well as a high or low NAV are irrelevant. Thus, it is the stocks in a portfolio that determine the returns from a fund, the value of the NAV being immaterial.

You should be making your selection of mutual funds based on past performance, risk and other such factors.

The only instance where a higher NAV will get you fewer units that may affect you is where a dividend has to be received. 

Dividend is given per unit. So the fewer the units you get, the lesser the dividend.

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In measuring a Fund's performance, an investor should understand the basic definitions of Fund returns.

Total Returns

The change in a Fund’s Net Asset Value (NAV) over time, assuming that income distribution are reinvested and that there are no purchases or redemptions made during the period.

Average Annual Total Return

The Total Return for the period divided by the number of years under review.

Distribution Yield (for fixed-price Funds)

The income distribution divided by the Fund’s price, which is fixed at RM1.00 per unit.

Performance Benchmark

Although the past performance of a fund is not indicative of its future performance, it is useful to compare the fund’s performance to its benchmark and other funds with similar investment objectives. The use of an appropriate benchmark that fits a Fund’s investment objectives or asset classes can be extremely useful. This is because different asset classes perform differently following changing market conditions.

For instance, an equity fund which primarily invests in Malaysian equities would be appropriately benchmarked against the Kuala Lumpur Composite Index (KLCI) or any Bursa Malaysia indices, while a balanced fund would be appropriately benchmarked against a composition of asset classes, for example, 50:50 between KLCI and 3-month Kuala Lumpur Interbank Offered Rate. When selecting a Fund, an investor should be looking for a fund which have consistently outperformed its benchmark or competitors.

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A fund’s net asset value (NAV) is what the fund is actually worth. It is measured by dividing the total value of the fund’s by the total number of units in circulation. The Net Asset Value (NAV) per unit is also quoted for selling and redeeming unit trusts.

NAV = Total Value of Fund/Total Number of Units in Circulation.


A fund's NAV increases when the value of its holdings increases. For example, if its investments are worth $100 million today, but were worth $95 million a year ago, its NAV will be higher if the number of units has remained constant.


NAV per share is computed once a day based on the closing market prices of the securities in the fund's portfolio. All mutual fund’s buy and sell orders are processed at the NAV of the trade date. However, investors must wait until the following day to get the trade price.


Mutual funds pay out virtually all of their income and capital gains. As a result, changes in NAV are not the best gauge of mutual fund performance, which is best measured by annual total return. (Read more inside ..)

Diversification – the spreading of risks over a wide variety of securities in different sectors. Normally to do this, you must have a substantial amount of money to buy a diversity of stocks. However, unit trust funds facilitate this by providing small savers with an opportunity to pool their savings to invest in a diversified portfolio of stocks or you could think of it as "not putting all your eggs in one basket".

Professional Fund Management – your ability to employ a team of well-trained, in-house investment professionals who conduct full-time regular investment research and analysis in managing the assets of the Fund. With such investment expertise, research facilities and information network, sound investment decisions may be made.

Liquidity – you can redeem all or part of your units on any Business Day and the Manager will purchase them.

Hassle Free – you need not trouble yourself with complicated decision making and arduous paperwork involved in investment in the securities market.

Affordability – you only need a small amount of money to participate in a professionally managed portfolio of investment and enjoy the same benefits accorded to others when investing in high priced securities. At the same time, you can also reap better returns from a portfolio of investment as opposed to the limited number of securities which one can invest individually.

Comparison of Unit Trusts with Direct Investments in the Stock Market & Fixed Deposits

Unless a person has a very large amount of cash for direct investments in individual stocks, he may not be able to achieve a sufficient level of diversification. Losses in one or more of his stocks may substantially reduce the value of his portfolio. Unit trusts, on the other hand, have a diversified portfolio and losses in some of the stocks held are offset by gains in others. Nevertheless, a person with an undiversified portfolio may reap great returns if one or more of his stocks increase in value. Unit trust prices rise more gradually when some of its stocks' prices increase as the unit prices are based on the total value of the portfolio.

Fixed deposits are generally safe and the returns are guaranteed. Nevertheless the returns are generally lower and may be eroded by inflation. Unit trusts generally aim to achieve returns that are higher than fixed deposits but such investment carries the risk that losses may be incurred. (Read more inside ..)

A unit trust fund is a collective investment scheme, which pools the savings of investors with similar investment objectives in a special "trust" fund managed by professional fund managers. The pooled monies in the unit trust fund will then be invested in a diversified portfolio of securities and other assets in accordance with the unit trust fund's investment objectives and as permitted under the Securities Commission's (SC) Guidelines on Unit Trust Funds.

The investment scheme of a unit trust fund can be illustrated as a tripartite relationship between the manager, the trustee and the unitholders. The manager is responsible for the management and operations of the unit trust fund whilst the trustee holds all the assets of the unit trust fund. The obligations and rights of each of the three parties are specified in the Deed, (a legal document entered into between the manager and the trustee, and registered with the SC). The Deed regulates the duties and responsibilities of the manager and the trustee with regard to the operations of the trust fund and protects the unitholders' interests. (Read more inside ..)

There are 3 common strategies used in unit trust investment.

1. Ringgit Cost Averaging
Regularly invest a fix amount in a unit trust fund regardless of market trend is called the Ringgit Cost Averaging strategy. The actual market performance is fluctuating. When the equity market is high, you buy less unit with the same amount. When the market is low, you buy more unit. For long term, you will get much more unit in the lower price range.

2. Portfolio Re-balancing
Portfolio re-balancing is the process of bringing the different asset classes back into proper relationship following a significant change in one or more. More simply stated, it is returning your portfolio to the proper mix of stocks, bonds and cash when they no longer conform to your plan.

Example:

You start investing 50% in equity and 50% in fixed income fund.
1 year later, the equity rises and now your portfolio consist of 80% equity and 20% fixed income fund.
To re-balance your portfolio, you should sell 30% of your total fund in equity and invest it in fixed income fund so that the portfolio is maintained.

This is the simple principle of buying low, and selling high.

3. Switching
Switching will lock in the gain you made in your unit trust investment. Switching fees are low and definitely lower than the upfront service charge. When you are making profit from an equity fund, you can switch it to some lower risk fund to lock the gain instead of selling it for cash. When the market turn low, you can switch it back to equity fund. (Read more inside ..)