Fundsupermart and Unit Trusts in Malaysia

Fundsupermart

I received Fundsupermart‘s red packets in the mail (Ironman not included) today just in time for CNY this year.

Fundsupermart

Red Packets from Fundsupermart

As some of you may know, I’ve been consistently investing in Private Retirement Scheme (PRS) funds through Fundsupermart for 2 years now. The RM500 youth incentive from the government got me started and I’ve been investing RM3,000 annually since then. The tax breaks given by the government are treated as a sort of guaranteed return for my portfolio. One may argue though that the fact that we’re unable to withdraw the funds until after the age of retirement is a drawback. I, however, treat my annual RM3,000 deposits into PRS as my security fund, together with fixed deposits and my EPF.

Unit Trust

I used to invest in Unit Trusts (UT) a few years ago but have since switched over to shares. The UT industry in Malaysia is still in its prehistoric age with exorbitant fees and lousy returns. Some are even charging fees as high as 5% per annum, compound that and you will be paying more than half your wealth in fees. It is my wish and hope that in the future, companies like Vanguard will be able to set up shop in Malaysia. I’d then gladly throw half, if not all my wealth in a passively managed index fund.

As I plan to be transparent with all my investments, I present to you my UT and PRS holdings. I’ve kept some of my investments in bond funds as I have no other means other than UTs to diversify into fixed income investments.

FSM PRS UT Holding

As at 31 December 2015, 37% of my wealth lies in my secure bucket – ie. the bucket where the investments are considered safe. Funds in my savings & current accounts, fixed deposits, PRS funds, EPF and my bond funds make up my secure bucket. I intend to dip into my secure bucket and reduce it to around 30% if and when the opportunity arises.

Till then, happy investing.

End.

As many of you know, I’m not a big proponent of Unit Trusts and Mutual Funds here in Malaysia due to their excessive and ridiculous fees. However, if I were to recommend a platform for Malaysian investors to purchase their funds, it would be Fundsupermart. They offer the lowest fees currently. However, the fees charged by the funds themselves are another matter altogether.

So, if you’re interested in opening an account with Fundsupermart, you may do so hERE.

A Review of 2015

The Year 2015

Like most years, the year 2015 had its ups and downs.

My stock holdings as at 31 December 2015 can be found in the table below.

No. Stock Quantity Gross
Investment
(RM)
Dividends
(RM)
Div. Yield
1 AFG 2,100 10,038.00 302.40 3.01%
2 AIR ASIA 4,300 7,138.00 0.00%
3 AXREIT 14,236 24,313.66 773.89 3.18%
4 BONIA 33,700 26,990.33 421.25 1.56%
5 CBIP 10,000 14,425.00 600.00 4.16%
6 CYPARK 8,200 17,681.66 410.00 2.32%
7 HLFG 700 10,528.00 266.00 2.53%
8 HOMERIZ 8,300 14,127.21 624.05 4.42%
9 IGB REIT 22,800 20,030.56 612.56 3.06%
10 MAYBANK 1,500 12,450.00 0.00%
11 NESTLE 200 13,376.00 610.00 4.56%
12 SCIENTX 3,800 22,267.24 680.00 3.05%
13 SUNCON 360 0.00%
14 SUNREIT 13,600 19,839.68 685.75 3.46%
15 SUNWAY 3,600 11,264.04 1,332.00 11.83%
16 TUNEPRO 10,800 18,503.64 226.24 1.22%
17 UOA REIT 7,000 10,920.00 0.00%
254,382.62 7,544.14 2.97%

*Sunway Berhad paid out a one-time special dividend when its subsidiary Sunway Construction went public in 2015, hence the 11.83% yield.

You may notice that some of my investments gave me a 0% dividend yield, this is because I purchased them recently and did not receive any dividends from them with the exception of Air Asia which doesn’t pay dividends.

Capital Gains

Dividend Magic - A review of 2015

Photo source: insidetherockposterframe.blogspot.my

As at 31 December 2015, my portfolio registered an unrealized gain of 6.5%.

Now this figure might be important to some of you but for me, dividends and its growth are what matters to me. Combined with my dividend yield of 2.97% for 2015, my portfolio’s total gain was a cool 9.5%. Not too high compared to some of the players out there, but I’d take a steady growth in my investments every year over erratic volatility in them any time.

 Top 3 Performers

  1. Scientex Berhad
  2. CBIP Berhad
  3. Homeriz Berhad

I will be actively looking to add more of these 3 stocks to my portfolio in 2016 provided the price is right. Scientex (which is covered here) and CBIP Berhad have both delivered consistently. Homeriz’s financials has been helped greatly by the devaluation of the ringgit which saw my investments double in 2015.

Disappointments

  1. Bonia Berhad
  2. Cypark Berhad
  3. Alliance Financial Group
  4. Air Asia
  5. Tunepro (formerly Tune Insurance)

Collectively, these 5 companies cost me RM14K in unrealized losses. However, the dividends received from them were pretty solid with the exception of Air Asia and Tunepro. I will continue to hold on to them provided the fundamentals remain.

Dividends

I received RM7,544 through dividends alone in 2015, surpassing my target of RM6K per annum. The dividends earned will all be reinvested into the portfolio, letting the 8th wonder of the world work its magic – compound interest.

My next target would be RM8,500 per annum translating to just over RM700 per month, which should in theory be able to cover my most basic living expenses (if I live frugally).

Ultimately, I aim to be able to cover all my living expenses through dividends alone.

I view my investment portfolio as a young tree, with each stock its own branch, branches which I would think long and hard before I’d ever consider chopping them off. Each and every branch of this wonderful tree produces bountiful fruit – in the form of dividends which is what I’ll eventually live off of, choosing to pluck the fruit and leave the branches intact rather than cutting the branches. What with me working and all now, I am fortunate enough to be able to replant those fruits instead of consuming them – reinvesting my dividends every year will eventually snowball into a huge sum in the long term.

Patience is very tough at times, but my progress thus far is proof that patience and persistence works. Since I started investing in 2014, my passive income has been steadily increasing every single year. It takes a little time for this to start noticeably working, but the additional cash flow is real.

We Can Do It!

CC Image Rosie the Riveter courtesy of The U.S. National Archives on Flickr

Fin