Why pay underperforming unit trust fund managers?
Michael LeePublished: Aug 26, 2004 4:46 PM | Updated: Jan 29, 2008 6:21 PM
Glad to hear that Peter Chang got a fund manager that made him some money from a fund that he had invested in. But, has he made money over the inflation rate for the number of years that he has invested in the fund? He may very probably have lost out in real terms.
Let me enlighten the general public. Unit trusts are first and foremost the retirement funds of the general public and unit trust fund managers are supposed to ensure that they at least must outperform our Employees Provident Fund, so to speak.
What is the answer for those unit trust managers that cannot beat our EPF and even lose our money? Shouldn't these fund managers be suspended? Why should they be paid?
Imagine if your parents lost their retirement funds because of a poor-performing fund manager. I wonder what your comments on the unit trust industry would be then?
Just imagine the fact that Public Mutual has more than RM10 billion in funds assets and without doing anything, makes RM150 million a year based on their 1.5 percent annual fee, regardless of the performance of the fund.
Did you know that this type of profit is risk free and better than giving out a loan at 1.5 percent interest and running the risk of delinquency?
In the US, the unit trust industry is much more mature and the initial service fee is not as high as in Malaysia. Furthermore, the annual fee is based on performance on a year-to-year Net Asset Value basis.
Do we want a Public Mutual fund that claims to be outperforming the KLCI and yet still loses money? Should they be paid for underperforming? Nobody would mind paying the fee if the fund performed. As it is now, the unit trust fund industry needs a shake up as it is currently still protected.
Noticeably, it is the funds not backed by the banks that are performing better. Indeed, the industry needs a shake up and the authority must act. But then again, the authority is part of the unit trust industry within the larger financial system and therefore may not see any urgency to change the system which benefits the big players.
Only a well informed public and demand from consumer groups and NGOs can see a change in a financial system that rewards non-performing unit trust fund managers.
Let me enlighten the general public. Unit trusts are first and foremost the retirement funds of the general public and unit trust fund managers are supposed to ensure that they at least must outperform our Employees Provident Fund, so to speak.
What is the answer for those unit trust managers that cannot beat our EPF and even lose our money? Shouldn't these fund managers be suspended? Why should they be paid?
Imagine if your parents lost their retirement funds because of a poor-performing fund manager. I wonder what your comments on the unit trust industry would be then?
Just imagine the fact that Public Mutual has more than RM10 billion in funds assets and without doing anything, makes RM150 million a year based on their 1.5 percent annual fee, regardless of the performance of the fund.
Did you know that this type of profit is risk free and better than giving out a loan at 1.5 percent interest and running the risk of delinquency?
In the US, the unit trust industry is much more mature and the initial service fee is not as high as in Malaysia. Furthermore, the annual fee is based on performance on a year-to-year Net Asset Value basis.
Do we want a Public Mutual fund that claims to be outperforming the KLCI and yet still loses money? Should they be paid for underperforming? Nobody would mind paying the fee if the fund performed. As it is now, the unit trust fund industry needs a shake up as it is currently still protected.
Noticeably, it is the funds not backed by the banks that are performing better. Indeed, the industry needs a shake up and the authority must act. But then again, the authority is part of the unit trust industry within the larger financial system and therefore may not see any urgency to change the system which benefits the big players.
Only a well informed public and demand from consumer groups and NGOs can see a change in a financial system that rewards non-performing unit trust fund managers.
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