Tuesday, February 3, 2009

Inflation Buster

Amanah Saham Nasional Bhd (ASNB) fixed-priced unit trust funds launched in the past few years have proven to be big winners due to their commendable returns.

These equity-based funds, namely Amanah Saham Wawasan 2020 (ASW 2020) and Amanah Saham Malaysia (ASM), have achieved compounded annual growth rates of 10.78% and 6.3% respectively since the time of its launch. ASW 2020 and ASM have been providing an annual average distribution income of 7.74 sen and 7.12 sen respectively.

Say if an investor had placed RM100,000 in ASW 2020 10 years ago, his investment value would amount to RM251,360 today. Similarly, by placing the same amount in the ASM fund 10 years ago, the investor would have RM173,340 today in his investment account.

ASM was launched on April 20, 2000, with an initial fund size of two billion units which were fully subscribed in 21 days. In June 2000, one billion units were fully subscribed in four months. In April 2006, one billion units were fully subscribed in 45 minutes. In the most recent offer in July 2007, all the 500 million units were taken up in 30 minutes.

All good things are well loved. Investors have confidence in these funds. Besides being managed and backed by a GLC, the returns are commendable. However the demand is more than supply. Additionally most of us will either have too much pride or too little time to join the crowd in queuing during the launch!

Do not be despair; there are options in the market. Investors could find similar funds that are well managed by private fund managers backed by the leading banks. The returns are equally impressive (if not better) in the long run and have now become relatively cheap.

Unit trust investments are good for those who think they do not have a lot and want to start saving money effectively. More so in current situation where the banks could only offer 2.5% returns for investment in fixed deposit!

Recommendation of funds are welcomed!

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