Judging by the comments from my ASW 2020 post, 9 out of 10 people (if not more) missed out on the ASW 2020. So if you’re one of those poor souls — all cashed out and no place to invest… 🙂 , I thought it’d be good to get creative with some alternatives to the ASW 2020 that you could consider. The list is not exhaustive so, you’re welcome to add more ideas through the comments section. Whatever it is, nobody mention Swisscash or Swiss Mutual…puurrlleeeassse!!

1) Fixed deposits — obviously this is still the most popular of investments because it is safe and offers predictable returns (you can check out my recent post for the best FD rates in Malaysia)

2) Capital guaranteed deposits — ever popular and the bane of most mutual fund sales people who all wish their UT companies would start offering the same. One such CG product that was launched with a big bang by Maybank recently is the CORE Capital Guarantee fund. This is what a banker friend of mine had to say about the product:

“CORE stands for Commodities, Reits and Equities. Fund size (closed ended) was RM200m but received applications for RM400m+ and fund size was increased. RM200m was taken up by 10am on day 1. Indicative return is 6.7% p.a. and lock in period 3 years. Eligibility – 18yrs to 70 yrs. Upfront fees of 3%. 90% in fixed income, 7% in options 3% (sales) charges.

Equity options – 1/3 DJ Euro Stoxx 50 index, 1/3 S&P 500 Index, 1/3 Nikkei 225

Reits – 1/3 TSE Reit Index, 1/3 EPRA Europe Index,  1/3 Real Est Index

Commodities 1/3 Zinc, 1/3 Oil, 1/3 Sugar”

Sounds quite interesting – I like the fact this is a global CG fund that invests in commodities and also REITs in addition to equities. A return of 6.7% is pretty close to ASW 2020’s last dividend distribution of 6.8% too. But of course there’s the 3% sales charge to factor in which averages out to 1% per year over 3 years. So net of sales charge, the return is around 5.7% pa. Not sure what is the minimum investment though.

If you like your CG funds a bit less complicated, then I know that Maybank have quite a few local CG funds including Mayban Dana Fitrah 1 (1.77%) and Mayban First Capital Capital Guaranteed Fund (-0.46%).  Hwang-DBS have the series Hwang-DBS Capital Guaranteed I, II, III (0.41%, 1.60%, -0.23%) and also their top performer Hwang-DBS IM Guaranteed (5.38%). Worth mentioning also are the OSK-UOB series named (what else!!) OSK-UOB Capital Guaranteed Series 1 and 2 (1.94%, 2.27%).

The percentages in brackets are the funds’ 1 year return as at 31/7/06 as published in the September 06 issue of Personal Money. So why for a CG fund are some of the returns negative, I hear you ask? I’m guessing that this is due to the upfront sales charges that may be as much as 3% as seen for the CORE CG fund. Hope someone out there can shed more light on this.

For more on CG funds, you can read the Best CG Funds in Malaysia round-up which I posted up in July.

3) Structured products — these are for the well-to-do since most start at a minimum investment of RM250,000. One exception is the CIMB All-Stars Global Structured Product (5 years lock-in) which starts at RM100,000. You can read the review and comments on this product here. Another fund with a low minimum investment is PruAPIF or Prudential Asia Pacific Income Fund (3 years lock-in), starting from RM5,000. You will note from my earlier post that I’m still not convinced that the PruAPIF fund is better than just going down the FD route. Anyway if you have RM250,000 or more readily available, I’m sure the banks would be happy to tailor something up to suit your needs whatever they may be.

This is a start to whet your appetite — more in my next post 🙂

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