AIO Finance Analysis

I came across this article from MyPaper reporting on Unit Trust. I thought why not share it on my blog. Similarly, DWS Global Agribusiness, unit trust from DBS caught my eye. The Fund invests in opportunities at various points along the “food chain” ranging from agricultural commodities to consumer products. Areas include land and plantation, seed and fertiliser, protecting and irrigation, food processing and manufacturing companies. With the exception of cotton, all other soft commodities went up again in November.Oil prices nearing USD 100 per barrel was one of the reasons for further food inflation. Other funds recommended by MyPaper includes
1. Legg Mason Singapore Bond Fund
2. Lion Capital Team Singapore Fixed Income Investment Class
3. A Henderson Global Bond Fund
4. ING Singapore DollarBond Fund
5. UOB Global Bond Fund


MyPaper Report
It was a less-than-positive start to the new year, with oil prices hitting US$100 per barrel and a weak job market outlook heightening the fears of a United States recession. A sell-off in equities and lower bond yields have caused bonds to outperform equities.

Singapore bond funds performed better because they were largely overweight on Government bonds which carried good credit ratings and were more focused compared to more diversified global bond funds. Would bonds continue to perform better than equities? It is still unclear as the outlook for equities is still uncertain in the near term.

For now, investment in bonds is still recommended for three reasons.
First, we are starting to see Main Street (the investing public) being affected by Wall Street. Weak job numbers and the fall in ISM (Institute for Supply Management) non-manufacturing data showed that the US economy had slowed down sharply from December to January, and it was clear that the financial market turmoil which
began in the housing market had affected the broader economy.

Second, it is not clear whether US housing market has bottomed out yet. Housing grew at about 1.006 million units per month in December, a new-low since late 2005 and the lowest in 17 years. Housing permits and existing home sales continued to form new lows in December 2007 since their descent in 2005. Sub-prime foreclosures as a ratio over total loans have also been increasing since 2005. These numbers suggest that the US housing industry is weak. Lastly, the effects of the US Economic Stimulus package will be felt only in the second half of this year. The package to stimulate the economy is great – consumer cash rebates, business incentives and easing on home loan limits – but the easing of loan limits will take effect next month and the cash rebates will be in the mail only by May. Until then, the economy might not feel the full impact of the economic stimulus.

For now, we favour bonds over equities as the outlook for the latter is still unclear. Investors with spare cash could consider high-quality fixed income securities such as European sovereigns as it is likely that the European Central Bank might reduce rates. Or they could wait until the market bottoms out before investing in equities. In the long term, the outlook for emerging markets is still promising, so don’t panic.

Source: MyPaper

I managed to read this chart from Investmentmoats. These are the counties where many banks will advice you to place a Unit Trust Investment with them. However with the market now, I will recommend you take a wait and see attitude till the market calms down.

Unit Trust Recommendation

Above is a chart by Fundsupermart (click to enlarge)

For those who are still interested to buy Unit Trust at the moment, you can refer to the chart for Unit Trust by Fundsupermart. From the table, we can see that Lion Capital Malaysia and Legg Mason SEA Special Sits are doing pretty well at 36% and 40%.

In addition those who wants to save on the manage fees; you can buy Unit Trust at Fundsupermart or POEMs. They are charging only 2%-3% at Fundsupermart and 1.5% at POEMs when banks are charging around 5%. In all you stand to save at least 2% of your investment.

You can refer to here for 2007 best performing funds
http://aiofinance.blogspot.com/2008/01/top-performing-unit-trust.html

Top Performing Unit Trust in 2007

Above is a chart by Fundsupermart.

It seems like India and China are still the top performers in the Unit Trust market. You can see from the chart that they are infested with both India and China funds. The question is that will they maintain their drive?

(Read More...)

Source: Fundsupermart