OK so checked out Public Mutual’s website and fact sheet – here’s the juice:
The Public Asia Ittikal Fund (PAIF) is an Islamic equity fund that will invest 75-90% of its net asset value in regional equities.
The main objective of the fund is capital growth over the medium to long term. As mentioned, the 11 countries that Public Asia Ittikal fund will invest in are Taiwan, China, HK, S Korea, Japan, the 5 ASEAN countries (Malaysia, Singapore, Thailand, Indonesia and the Philippines) and Australia. The equity categories are mainly blue chips, growth and “fundamentally undervalued” stocks – I’m guessing that we will see companies like Hyundai, Samsung and Toyota in there somewhere.
It is an Islamic fund which means that Public Mutual will seek advice from a Syariah adviser to ensure that the investments are in keeping with Syariah principles or “halal”, so there will be no casinos, breweries, conventional banks in there. But the fund is open to both Muslims and non-Muslims alike.
The PAIF is promoted as being suitable for investors with an aggressive risk profile or those who are able to withstand long periods of market highs and lows (to learn more about your risk profile in investing read my earlier post).
Price is 0.25 per unit which is inclusive of 6.5% sales charge, but good news for early birds – Public Mutual have announced an offer of 1% free units during the launch period or until their target is reached, whichever the earlier. Fund size is 1.5 billion units, and investors can purchase the Public Asia Ittikal fund through Public Mutual’s sales reps.
Sounds good for long term investors out there who may want to diversify into countries other than Malaysia if they haven’t already done so. However, note that Public Mutual have yet to prove themselves or establish a track record when it comes to overseas funds. The awards they’ve won over the years were for Malaysian equity and bond funds.
The game is still wide open for global or regional funds that are managed by Malaysian fund companies..
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[...] view part 1 of this post [...]
[...] Too sad that I’m going to fly anytime soon and have no time to make an investment in this fund. Emily said that Public Mutual didn’t have any good record in investing in regional sector (abroad). However, my current investment on Public Regional Sector soared 6.9% in 2 months. But this is only a short time performance. [...]
Interesting. Sorry…just thinking out loud here. I keep getting these questions in my head but do we actually have syariah financial advisors here or does Public Mutual have Islamic fund managers? Still trying to understand what constitutes halal businesses….:)
I think Public Mutual appoints a Shariah advisor to endorse its investments.. part of the legal requirements in Malaysia. This new fund is probably a feeder fund and relies on other external fund managers to do the stock picking. Which means you have to bear 2 sets of Fund Management Fees. My experience with Public Mutual hasn’t been too great… I get the feeling that they are more of a marketing company that a great fund manager. Somehow they always seem to be splitting their units, which of course makes it harder for you to track your fund performance.
Yes Larry’s right about the Syariah adviser -according to the info I received, company called Islamic Banking and Finance Institute of Malaysia advises on Islamic matters.
But this is not a feeder fund – I mean the good thing is that you don’t have to pay two sets of fees, but like I said before how good are Public Mutual’s fund managers in the overseas market — we have to wait and see since this is only their 3rd overseas fund.
On unit splits — unfortunately many investors stil look at price as indicative of the “value” of a company. Example they look at a rubbish Mesdaq counter at 10 sen or 20 sen and think “wow great value – must buy” and then they look at a big cap like Public Bank at 6-something and think “so expensive”. Same goes for mutual funds! So in a way if a fund splits often, it may also mean that the fund’s done well over the years.
Thanks for the clarification Em. u are definitely right about the 10sen v Rm6.00 stock price perception. And I do recall going to a unit trust seminar where the Manager did say that this perception problem also exists for unit trusts as well. I guess investor education is the key thing.
i am most interested in larry’s comment that he wasnt happy with public mutual.
maybe he could elaborate on that.
I was previously in the Public Ittikal Fund in the regular investment plan. But after a few years, I worked out the the investment value was only slightly more than the total instalments I invested (3+ years). I did not even bother to work out the returns, just cashed out after that. I was actually quite happy with their Bond fund before where I got 7%+ p.a. over 2 years or so.
Emily,
A correction.
PAIF can only invest up to 70% in foreign securities. The 90% figure is for maximum equity exposure.
Maybe Public Mutual not fully confident of its abilities to invest overseas, and so would like to hedge its bets on some local stocks.
OK gotcha! Thanks for pointing that out, Ree.
“the 11 countries that Public Asia Ittikal fund will invest in are Taiwan, China, HK, S Korea, Japan, the 5 ASEAN countries (Malaysia, Singapore, Thailand, Indonesia and the Philippines) and Australia.”
and
“However, note that Public Mutual have yet to prove themselves or establish a track record when it comes to overseas funds. ”
when investment is made across different currencies, we are prone to different currency fluctuations. This is very very tricky. We effectively multiply the risk. How can we possibly see profits?
i’m too interested in larry’s comment. i just started investing with public ittikal via epf withdrawal. can he clarify the details leading to the poor return, the mistakes and how to avoid it. lastly, can anybody elaborate on how to maximise return via regular epf withdrawal? someone mentions that the dca ( dollar cost averaging) does not guarantee good return. can anybody explain?
Khairul, just to share this with you. Dollar cost averaging can help lower the risk over the investment period. This is because the unit price will fluctuate like the stock market, therefore, if you practice DCA, you will have a average unit price as compare investors that invest by one lump sum. Like say the investor invest one lump sum during the price is high, the price keep dropping after he/she invested, so this investor has lock in the fix unit price. As compare an investor the practice DCA, the percentage of loss is smaller than one lump sum investor.
I’m interested on your blog here. Just a simple question here. As I was told by my friend from Public Mutual ITTIKAL was a success and the man who handling the fund is also handling is new Public Asia Ittikal Fund. With his good track record don’t you think that this new fund will also be a success like ITTIKAL? Share your opinion here….
Thanks
Larry, I think you made a mistake about cashing out your Ittikal fund. You need to be more patient as Ittikal has a 6.5% service charge whereas Bond has only 0.25% service charge. You won’t see your returns so soon after 3 years for a regular savings plan, because you haven’t received enough distributions to give you compounded returns. Keep it at least 10 years, the returns are much much more than an investment link plan where the service charges are 20-40% for the 1st 6 years!
You need to check your financial goal. Why do a regular savings plan? It’s because of your children’s education or your retirement fund, yes? So… keep your goal in check and continue saving for a longer time. You will see your rewards in time to come.
hi…
just to share my 2 cents… i invested in public ittikal via epf for twice totalling RM4k… that was in dec-2005 and april-2006, just b4 ittikal funds max out (means you can’t invest anymore)… after that i got 2 dividends in jun 2006 @ rm184+ & jun-2007 (recently announced 9.00 sen/unit dividend) @ rm422+…plus my fund now valued @ rm5.6k… a growth of 39+% in 18 months… just too bad i can’t invest more…
hi..
i just bought PAIF yesterday, after seeing the performance of ITTIKAL, as stated there, the fund manager is the same person. but, does it’s true that PB dont have enough experience in investing outside our region?
today the OSK UOB launch a new fund, Asia Property Fund, should i invest in this new fund? does you guys invest in OSK?