The prospectus of AS 1Malaysia says that "The price of AS 1Malaysia unit is fixed at RM1.00. However, AS 1Malaysia is not a capital guaranteed fund as defined under the Guidelines."
Are these two sentences contradict to each other ?
may sound contradict in common sense but NOT really in Malaysia sense.
the unit price is fix at RM1. but the total of RM1,000 you put in is not Guaranteed.
basically the value of the fund may go up and down, but they will not publish the actual performance as in they will not publish the NAV. So the value of the investment can go down as well as up - thus not a capital guaranteed fund.
generally its just words and terms, u can safely assume that you can take back RM1,000 unless they announce a negative dividen in future. :) (no, not going to happen )
but the downside is that if they earn a lot of money, ie. the NAV is RM 1.52 in future but when you withdraw you only get back RM 1.00 per unit, they keep the RM 0.52 profit.
That's what making people confused a bit here: The unit price is fixed at RM1.00 but the fund is not capital guaranteed, giving people an impression that one might not be able to get back the entire initial investment sum (even though there is no sales charge during the initial offer period).
I was first thought PNB may "reduce" my number of units, in order to cause me "losing my capital" !?
So in that sense it is better to be known as "not profit guaranteed" then ?
It is much talked about after the "news" was out in Sin-Chew Daily: http://www.sinchew.com.my/node/125524?tid=1
actually your concern is still valid, they are reserving their right to pay less in future. However, looking at ppl reaction on this launch, its more likely they will make it more attractive and not the other way around ...
When you mentioned "actually your concern is still valid", you mean my worry that "I was first thought PNB may "reduce" my original number of units, in order to cause me "losing my capital" !?" is valid ?
And by "people reaction" you mean AS 1M is not as popular as ASW2020 and ASM. So PNB will "try to make it looks more attractive" ?
You mentioned that PNB has the RIGHTS to reduce my capital, how are they going to "do" it since the fund is fixed at RM1.00 per unit and the number of my units is also fixed ?
dunno woh, as mentioned in earlier comment, I can only think of by declaring a negative dividen, that way, the unit price is still RM 1 but your total units may drop under 1,000 !?#?
they have the 'rights' to do it, not sure how they are going to pull it off ... just like how we didn't know how they took over Perak and how they are going to take over Sngor ... :)
its risk is minimum but its not NO risk. Anything CAN happen in Boleh land :)
The prospectus of AS 1Malaysia says that "The price of AS 1Malaysia unit is fixed at RM1.00. However, AS 1Malaysia is not a capital guaranteed fund as defined under the Guidelines."
And let's see what the "Guidelines" (GUIDELINES ON UNIT TRUST FUNDS, by SC effective 3 March 2008) say:
GUARANTEED FUND General (1) A guaranteed fund is one which guarantees investors will get back the capital invested, with some returns (if any), or guarantees investors a certain investment return payable at a pre-determined date in the future.
(2) The word “guarantee” must appear in the fund’s name. Where a fund does not comply with the requirements in this appendix, it must not use the word “guarantee”, or any other name which may imply some form of guarantee, in its name or in its promotional materials. Such a fund is prohibited from holding itself out as a guaranteed fund.
Now we may better understand why AS1M is specifically mentioned that it is NOT A CAPITAL GUARANTEED FUND. There is NO "pre-determined date in the future" could be fixed for AS1M, therefore it is not qualified as GUARANTEED FUND under this GUIDELINES by SC then.
PNB is obligated to highlight this aspect in the prospectus, because AS1M is launched after 3 March 2008.
And I guess the same nature of fund (merely Fixed-price; doesn't mean Capital Guaranteed) actually apply to ASW2020 and ASM. The statement of "Not A Capital Guaranteed Fund" was not made in their prospectuses, since they were launched in 1996 and 2000, respectively before this “Guidelines” is published.
I wonder if it is because of the “Fixed-priced” nature of ASW2020 and ASM, which set a lower bound of the unit price that they can’t go any lower, which give us a sense of “guaranteed” that we have “misinterpreted” that these two funds are “CAPITAL GUARANTEED FUNDS” ?! But actually they are NOT !? Anyone could find any clause in the prospectuses (or other formal and lawful documents) of these two funds launched previously that said that they are “CAPITAL GUARANTEED FUNDS” ?
I think you got the point here. :) I think if you used to like these type of funds, just go ahead to invest. I know there are others out there don't want to invest at all is because of this racist quota.
this applies to all funds, unit price is one thing. capital is another. price is fixed and capital is not. its that straight forward, the implication of fix price = capital guarantee is only layman's expectation, not a finance norm.
the part you should highlight is you may not "get back the capital invested" since it is NOT a capital guarantee fund.
I will give you another example, says for the next 3 years, they pay you 5-6% every year, but something happen on the 3rd year and this whole plan goes down the drain. They DO NOT NEED to pay you back your money and the fund is still priced at RM 1.00
Yups ... better equipped with correct knowledge now for more adequate and informed investment decisions.
Racist quota is one thing, but this emotional setback should not affect one in making his/her rational investment decisions. Else, we are the one who is irrational. We don't make enemies with monies, do we? :p
"I will give you another example, says for the next 3 years, they pay you 5-6% every year, but something happen on the 3rd year and this whole plan goes down the drain. They DO NOT NEED to pay you back your money and the fund is still priced at RM 1.00"
Then you will see the government changed for sure in the next election... hehehe :p
I may need to dig further exactly what PNB can and cannot do by the way it is setup but as far as I can observe it is pretty much an UMNO controlled 'business'
I don't think PNB is governed by 'Unit Trust Law', its more like a private investment firm, else it should announce its NAV daily.
I don't know who is the Trustee for 1Malaysia but generally other funds are trusteed by Amanah Raya Berhad, which actually the same people are running the businesses. at some instances, even the PM is named trustee.
anyway, I was just speculating so that the differences btw fix price and capital guaranteed can be understood.
don't get drilled down too deep with rumors (the one I spread), as of right now, it is still OK to simply put some money into 1Malaysia. Just don't put ALL you have in there .... This is not the basket you want all eggs in.
24 comments:
Yes! This is really what 1Malaysia is all about from Najib and UMNO pespective, no doubt.
what if the bumi portion not fully subscribed again? will be offered to all?
yes, un-purchased units will be reopened to all
1 MALAYsia that's it
it is very obvious and predictable. that is how it goes and it will keep going.
50% for Bumi, 30% for Chinese, 15% for Indians and 5 % for other races
That's precisely the concept of 1Malaysia from UMNO's perspective.
It's just we being naive to think that 1Malaysia is 100% bumi, 100% Chinese, 10% Indians, 100% for other races.
How sad!
50% for Bumi, 30% for Chinese, 15% for Indians and 5 % for other races
That's precisely the concept of 1Malaysia from UMNO's perspective.
It's just we being naive to think that 1Malaysia is 100% bumi, 100% Chinese, 100% Indians, 100% for other races.
How sad!
The prospectus of AS 1Malaysia says that "The price of AS 1Malaysia unit is fixed at RM1.00. However, AS
1Malaysia is not a capital guaranteed fund as defined under the
Guidelines."
Are these two sentences contradict to each other ?
What does that mean actually ?
may sound contradict in common sense but NOT really in Malaysia sense.
the unit price is fix at RM1.
but the total of RM1,000 you put in is not Guaranteed.
basically the value of the fund may go up and down, but they will not publish the actual performance as in they will not publish the NAV. So the value of the investment can go down as well as up - thus not a capital guaranteed fund.
generally its just words and terms, u can safely assume that you can take back RM1,000 unless they announce a negative dividen in future. :) (no, not going to happen )
but the downside is that if they earn a lot of money, ie. the NAV is RM 1.52 in future but when you withdraw you only get back RM 1.00 per unit, they keep the RM 0.52 profit.
That's what making people confused a bit here: The unit price is fixed at RM1.00 but the fund is not capital guaranteed, giving people an impression that one might not be able to get back the entire initial investment sum (even though there is no sales charge during the initial offer period).
I was first thought PNB may "reduce" my number of units, in order to cause me "losing my capital" !?
So in that sense it is better to be known as "not profit guaranteed" then ?
It is much talked about after the "news" was out in Sin-Chew Daily: http://www.sinchew.com.my/node/125524?tid=1
actually your concern is still valid, they are reserving their right to pay less in future. However, looking at ppl reaction on this launch, its more likely they will make it more attractive and not the other way around ...
Michael,
When you mentioned "actually your concern is still valid", you mean my worry that "I was first thought PNB may "reduce" my original number of units, in order to cause me "losing my capital" !?" is valid ?
And by "people reaction" you mean AS 1M is not as popular as ASW2020 and ASM. So PNB will "try to make it looks more attractive" ?
Thank you.
They will 'most likely NOT' reduce your capital but they do 'have the RIGHTs' to do so in future.
yes on the reaction part.
Michael,
You mentioned that PNB has the RIGHTS to reduce my capital, how are they going to "do" it since the fund is fixed at RM1.00 per unit and the number of my units is also fixed ?
Thank you.
dunno woh, as mentioned in earlier comment, I can only think of by declaring a negative dividen, that way, the unit price is still RM 1 but your total units may drop under 1,000 !?#?
they have the 'rights' to do it, not sure how they are going to pull it off ... just like how we didn't know how they took over Perak and how they are going to take over Sngor ... :)
its risk is minimum but its not NO risk. Anything CAN happen in Boleh land :)
Boleh land sounds like the land in The Lost. :)
Btw, I don't think the previous launched fund is capital guarantee? Is there a such thing? I'd never noticed that.
The prospectus of AS 1Malaysia says that "The price of AS 1Malaysia unit is fixed at RM1.00. However, AS 1Malaysia is not a capital guaranteed fund as defined under the Guidelines."
And let's see what the "Guidelines" (GUIDELINES ON UNIT TRUST FUNDS, by SC effective 3 March 2008) say:
GUARANTEED FUND
General
(1) A guaranteed fund is one which guarantees investors will get back the capital invested, with some returns (if any), or guarantees investors a certain investment return payable at a pre-determined date in the future.
(2) The word “guarantee” must appear in the fund’s name. Where a fund does not comply with the requirements in this appendix, it must not use the word “guarantee”, or any other name which may imply some form of guarantee, in its name or in its promotional materials. Such a fund is prohibited from holding itself out as a guaranteed fund.
Now we may better understand why AS1M is specifically mentioned that it is NOT A CAPITAL GUARANTEED FUND. There is NO "pre-determined date in the future" could be fixed for AS1M, therefore it is not qualified as GUARANTEED FUND under this GUIDELINES by SC then.
PNB is obligated to highlight this aspect in the prospectus, because AS1M is launched after 3 March 2008.
And I guess the same nature of fund (merely Fixed-price; doesn't mean Capital Guaranteed) actually apply to ASW2020 and ASM. The statement of "Not A Capital Guaranteed Fund" was not made in their prospectuses, since they were launched in 1996 and 2000, respectively before this “Guidelines” is published.
I wonder if it is because of the “Fixed-priced” nature of ASW2020 and ASM, which set a lower bound of the unit price that they can’t go any lower, which give us a sense of “guaranteed” that we have “misinterpreted” that these two funds are “CAPITAL GUARANTEED FUNDS” ?! But actually they are NOT !? Anyone could find any clause in the prospectuses (or other formal and lawful documents) of these two funds launched previously that said that they are “CAPITAL GUARANTEED FUNDS” ?
I think you got the point here. :) I think if you used to like these type of funds, just go ahead to invest. I know there are others out there don't want to invest at all is because of this racist quota.
this applies to all funds, unit price is one thing. capital is another. price is fixed and capital is not. its that straight forward, the implication of fix price = capital guarantee is only layman's expectation, not a finance norm.
the part you should highlight is you may not "get back the capital invested" since it is NOT a capital guarantee fund.
I will give you another example, says for the next 3 years, they pay you 5-6% every year, but something happen on the 3rd year and this whole plan goes down the drain. They DO NOT NEED to pay you back your money and the fund is still priced at RM 1.00
Yups ... better equipped with correct knowledge now for more adequate and informed investment decisions.
Racist quota is one thing, but this emotional setback should not affect one in making his/her rational investment decisions. Else, we are the one who is irrational. We don't make enemies with monies, do we? :p
"I will give you another example, says for the next 3 years, they pay you 5-6% every year, but something happen on the 3rd year and this whole plan goes down the drain. They DO NOT NEED to pay you back your money and the fund is still priced at RM 1.00"
Then you will see the government changed for sure in the next election... hehehe :p
actually the example I gave is that it happened right after govt. has changed, why else did I choose 3 years if not the election ?
Michael,
How possible is one's investment capital to "disappear" overnight even when BN lose to PR one day ?
I remember under Unit Trust Law, the assets of the fund are under the trustee's custody ?
I may need to dig further exactly what PNB can and cannot do by the way it is setup but as far as I can observe it is pretty much an UMNO controlled 'business'
I don't think PNB is governed by 'Unit Trust Law', its more like a private investment firm, else it should announce its NAV daily.
I don't know who is the Trustee for 1Malaysia but generally other funds are trusteed by Amanah Raya Berhad, which actually the same people are running the businesses. at some instances, even the PM is named trustee.
anyway, I was just speculating so that the differences btw fix price and capital guaranteed can be understood.
don't get drilled down too deep with rumors (the one I spread), as of right now, it is still OK to simply put some money into 1Malaysia. Just don't put ALL you have in there .... This is not the basket you want all eggs in.
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