...MARKET EFFICIENCY AND THE PERSISTENCE OF UNIT TRUST PERFORMANCE IN MALAYSIA CHAPTER 1 1.1 Introduction According to M.Rhodes, Research paper no. 2002 -2006, their offerings on the price many choose to highlight their past performance, implicitly as an indicator of future returns. The existence of persistence in performance is indicative of market Inefficiencies which some, but not all, fund managers are able to exploit. In an extension to the current literature the paper tests the proposition that changes to infrastructure, insomuch as they might affect market efficiency, affect the persistence of performance. Evidence is also presented on whether excess returns are the result of better skill or information for some managers or the existence of a momentum effect in stock returns. When picking a fund an investor faces a bewildering yet important choice from amongst several hundred product offerings and there is a considerable degree of price dispersion. Studies of Malaysia funds have relied on the assumption that conditions determining market efficiency, or the ability of fund managers to exploit inefficiencies, do not change significantly during the period examined. According to this research paper (2002-6), the unit trust industry in Malaysia can be considered relatively young. The first unit trust, Malaysia Investment Fund was launched in Dec. 2, 1966 by Asia Unit Trusts Be&ad. However, the industry can be expected to take off in the years ahead in light of recent...
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...researcher is “Islamic equity unit trust funds’ performance in Public Mutual Berhad”. Where this paper will go through and analyze the performance of Islamic unit trust in the selected company by using FTSE Bursa Malaysia Composite Index (KLCI) as benchmark in order to comparing with. In the first chapter the researcher will be discussed about the background of study,which provides a general idea on the scope of the study, identified the problem statement, objective of the study and it followed by significant of the study.The content of the report consist of introduction part, literature review, research methodology, finding and analysis and also conclusion. The proposed directions of the study were highlighted and are expected to fulfill the requirement of the study. 1.1 Background of Study There are lot of investment alternative that have today, but it depend on their choice on choose in which investment they want to invest with and also it depend on the skills of investing in such instruments. As most people that are not well knownin investment they will prefer to makeinvestment in unit trust funds because they are lack of information or knowledge in financial as well as investing skills. Unit trust based on free encyclopedia, Wikipedia it is a form of collective investment constituted under a trust deed. It is an open-ended investment where the underlying value of the asset is always represent by the total number of unit be issued multiply with the unit price less the transaction...
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...of Islamic equity unit trust funds’ in CIMB Wealth Advisors Berhad by comparing with the FTSE Bursa Malaysia Composite Index (KLCI) as benchmark. This chapter will discuss the background of the study, historical development of unit trust industry in Malaysia, understanding unit trust, problem statement, research objectives and the significance of the study. 1.1 BACKGROUND OF THE STUDY A plenty of investments alternative can be seen nowadays. But it’s depends on people which alternative they prefer to invest or depend on their skills of investing in such instruments. Most of the people who are lack in financial knowledge or investing skills will prefer to make investments in unit trust funds. There has abundance of benefits in unit trust and also can be advantageous to the small investors. Unit trust is an ideal way for small investors to invest for their future. Small investors are people who earn their living engaged in activities not related to the financial arena. They are aware that investing is important to them, but they lack of know-how to make the right decisions. For people who are unable or unwilling to do research and analyze investment markets and climate on their own, unit trusts is a good way to invest. In order to maintain a portfolio of stocks in the share market, a person has to keep himself up-to-date with market information and climate. For many people, this is difficult, time consuming and expensive. By investing through unit trust, they transfer the...
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...financial institutions. 20.2 Objectives After studying this lesson, you will be able to :- l explain the need for and importance of specialised financial institutions; l identify the types of such institutions; l describe the functions and objectives of Industrial Finance Corporation of India (IFCI) and State Financial Corporations (SFCs); l discuss the role and objectives of Industrial Development Bank of India (IDBI); l state the functions of IDBI; l Recall the meaning of ‘investment trust’; 56 :: Business Studies l discuss the objectives and function of Unit Trust of India (U.T.I.) ; l Explain the objectives of Industrial Credit and Investment Corporation of India (ICICI) ; l describe the functions of ICICI ; 20.3 Need for and importance of Specialised Financial Institutions (SFIs) SFIs are institutions set up mainly by the government for providing medium and long-term financial assistance to industry. As these institutions provide developmental finance, that is, finance for investment in fixed assets, they are also known as ‘development banks’ or ‘development financial institutions’. These institutions receive funds for their financing operations primarily from the government or other public institutions. These institutions also raise funds from the capital market. Need for SFIs The need for establishing SFIs arose mainly because of the following reasons:- 1. It was difficult for industry in general to procure sufficient longterm funds in the capital...
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...main role of a unit trust consultant would be distributing unit trust or mutual funds on behalf of a unit trust managemen company/ bank to the public. By explaining and analysing each and every fund that are distributed, unit trust consultant aid their clients in giving their best bets on their investments. In reality, a unit trust consultant is helping their clients in achieving financial independence at earlier age. And these need to start from educating them how important a financial plan is. Many people do not sense the urge of having a financial plan till they face financial difficulties. Therefore most of the governments “force” their citizens to build up their personal retirement fund which is mostly directly deducted from their pay/wages. For example, in Malaysia, every employees and employers ought to contribute to Employee Provident Fund (EPF). People can only withdraw the money when they reach the age of 55. However, 70% of the contributors spent all their EPF money after 3 years from their retirement, which seems do not serve the main purpose of setting up EPF. Thus in this case, unit trust consultant comes in and serve a role. There are many ways or types of investment which we can use to build up retirement fund. Long term investment in unit trust would be one of the most efficient way to build up a fund and at the same time offer a handsome return. There are 2 rules to follow in investing for unit trust: First, mid to long term investment. Second, regular...
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...Islamic unit trust companies in Malaysia Norma Md. Saad, M. Shabri Abd. Majid, Salina Kassim, Zarinah Hamid and Rosylin Mohd. Yusof Department of Economics, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia Abstract Purpose – The purpose of this paper is to investigate the efficiency of selected conventional and Islamic unit trust companies in Malaysia during the period 2002 to 2005. Design/methodology/approach – The paper adopts Data Envelopment Analysis (DEA) to investigate efficiency, as measured by the Malmquist index, which is decomposed into two components: efficiency change and technical change indexes. Findings – The study indicates that technical efficiency is the main contributor to enhancing the efficiency of the Malaysian unit trust industry. In addition, the larger the size of the unit trust companies, the more inefficient the performance. In comparing the efficiency of unit trust companies, the study finds that some of the Islamic unit trust companies perform better than their conventional counterparts. Research limitations/implications – The study is limited to five Islamic unit trust companies. Thus, the findings of this study are indicative, but inconclusive for the unit trust industry as a whole. Practical implications – The results have two important implications for both conventional and Islamic unit trust companies in Malaysia. First, the deterioration of total factor productivity (TFP) in the unit trust...
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...of Directors of the Manager Particulars of Members of The Property Investment Committee Profile of The Chief Executive Officer of The Manager Performance Data Composition of Investment Portfolio Unitholdings and Market Price Property Portfolio Analysis of Unit Holdings Financial Statements Unit Holders Resource 2 3 4 5 8 10 13 15 16 18 19 20 23 26 81 Corporate Information Manager Pelaburan Hartanah Nasional Berhad (175967-W) (Incorporated in Malaysia) Registered Office Of The Manager Tingkat 4, Balai PNB 201-A, Jalan Tun Razak 50400 Kuala Lumpur Telephone : 03-20505100 Facsimile : 03-20505878 Website : www.ahp.com.my E-mail : phnb@pnb.com.my Board Of Directors Of The Manager Tun Ahmad Sarji bin Abdul Hamid (Chairman) Tan Sri Dato’ Sri Hamad Kama Piah bin Che Othman Tan Sri Dato’ Seri Ainum binti Mohamed Saaid Dato’ Seri Mohd. Hussaini bin Haji Abdul Jamil Dato’ Abd. Wahab bin Maskan Dato’ Idris bin Kechot Secretary Of The Manager Adibah Khairiah binti Ismail @ Daud (MIA 13755) Tingkat 4, Balai PNB 201-A Jalan Tun Razak 50400 Kuala Lumpur. Management Of The Manager Tan Sri Dato’ Sri Hamad Kama Piah bin Che Othman (Executive Director) Dato’ Idris bin Kechot (Executive Director) Hafidz Atrash Kosai bin Mohd Zihim (Chief Executive Officer) Trustee AmanahRaya Trustees Berhad (766894-T) Tingkat 2, Wisma TAS No. 21, Jalan Melaka 50100 Kuala Lumpur Telefon : 03-20365000 Facsimile : 03-20720320 Investment Manager Permodalan Nasional Berhad (38218-X) Tingkat 4, Balai PNB, 201-A...
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...Real Estate Investment analysis Real Estate has evolved as the most profitable business over the years for those who can invest heavily in land or property and wait for their increase in value. However, the property may fetch instant cash in exceptional times like the sudden increase in value due to market reasons such as experienced just before the global financial credit crunch or due to the property’s unique location. This is classified under the short term type of real estate investment. The classification is based on the relative time spent to consolidate worth. The long term type of real estate investment therefore means that the owner has to wait for longer for the property or land to consolidate worth. (Isaac, 1998). The short term type of investments need professional skill, current knowledge and experience in the market. Long term estate investment is generally considered to be the most profitable since the period of the investment is longer and the returns are good. A different classification identifies Real Estate Investment Trusts, land investments, rental properties and vacation rental properties as the different types of Real Estate investments. This is a more narrow and specific classification than the previous one. The history of indirect investment in property can be traced back to the 1950s across the world. A diverse range of property investment vehicles have emerged since then. These exist in the form of both debt and equity...
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...Investment Proposal Casey Havenga Introduction A client who is 21 years old has approached me with R1 000 000 which they won in the lottery. I will split the money into three parts: R200 000, R200 000 and R600 000. One R200 000 I will invest in a Notice Deposit bank account; the other R200 000 will be invested in Unit Trust investments and the R600 000 will be invested long term in JSE’s top 40 companies. My aim as a broker is to ensure an average of 15% growth on my client’s money with minimum risk. I’ve broken up her money so that she will have a cash flow in case of emergencies and still get growth on her money. investment 1: Notice Deposit Account This is the most stable option for my client because there isn’t a chance that she will lose her money. With this investment my client can withdraw or deposit money after giving a 30 day notice to the bank. This way she can access these funds whenever she needs to. The interest she earns on her money is calculated with the prime rate that the bank uses. The current prime interest rate is 9%. The interest that she earns is calculated by compound interest. Money after 5 Years: S= P(1+i) to the power of 5 S= R200 000 (1 + 0.09) to the power of 5 S= R200 000 (1.538623955) S = R307 724.79 Total interest earned = R307 724.79 – R200 000 = R107 724.79 Tax is paid on the interest earned. According to the income tax table and he tax rebate table the amount of tax...
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...sFinancial Markets. Homework. Suslova Maria 1) Financial system helps to provide a steady flow of funds from surplus to deficit units as efficiently as possible. Surplus units( individuals,companies etc) wish to invest funds, while deficit units need to borrow them and as there exist enormous amount of heterogeneity between these agents, there appears a need in financial system. Surplus units usually want to make a short terms investment, also they need a compensation for risk and prefer to have an ability to access funds (high liquidity), however deficit units wish to borrow for long term and do not wish to pay too high percents for the loan. For these reasons financial intermediaries appeared in the world. They take short term investments from surplus agents and give long term loans to deficit agents. Due to the law of large numbers they are able to do so and to hold not much liquidity. However there is always an ability of financial crisis and bank run, because of such functions of financial system. 2) There are 5 types of product innovations : Market broading innovations – these work to increase the liquidity of markets by attracting new investors and providing new opportunities for borrowers. Risk-managment innovations – these have the effect of redistributing financial risk exposure from agents that are risk-averse to agents that are willing to undertake the risk. Arbitraging innovations – in these agents exploit arbitrage opportunities...
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...TRUST DEED THIS DEED of TRUST is made at Dhaka on this the …… day of ………… of the Christian era. BETWEEN (Sponsor’s name).........., having its registered office at .......(Address).........., represented by its .......Chief Executive Officer/Managing Director..., hereinafter referred to singly, severally and collectively, as the AUTHOR or SPONSOR, which expression shall, unless it be repugnant to the subject or context or meaning thereof, include its representatives, successors-in-interest and assigns of the FIRST PART. AND (Trustee’s name)........., having its registered office at ...(Address)......, represented by its.....CEO/Managing Director....., hereinafter referred to as the TRUSTEE, which expression shall, unless it be repugnant to the subject context, or meaning thereof, include its representatives, successors-in-interest and assigns of the SECOND PART. AND WHEREAS the party of the first part is a leading institution in Bangladesh, engaged in various types of ............(activities)......., having required capabilities and adequate skills in its concerned field of activities and offices and network of branches all over Bangladesh and are qualified and capable to be the Sponsor of a mutual fund, AND WHEREAS the party of the second part is a leading ............... so far engaged in ..........activities and are qualified and capable to act as the Trustee of a mutual fund, NOW, THEREFORE, with the intent to create an investment product for...
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...KOBINA 1.0 INTRODUCTION 1.1 BACKGROUND TO THE STUDY Over the years in Ghana, the private sector has had it difficult raising capital and adequate funds for investment and other business activities, this led to the undertaking of a number of financial sector reforms by the government. The emergence of mutual funds into the Ghanaian financial sector has been as a result of these reforms. This is to facilitate capital generation and savings mobilization for the private sector to help them accomplish their organizational objectives. It has become evidently clear that, to achieve development in the economy in terms of high gross domestic product (GDP), a better per capita income, less unemployment and reduction in inflation, the private sector of the economy should be encouraged to lead in the generation of wealth. Capital for investment in this country (Ghana) is either sought for internally or externally but the Ghanaian government like its’ counterparts in other African countries have been relying heavily on external funds from developed economies and donor communities to be able to implement public sector development policies. This has not been so easy in recent years due to the diversification of these funds to countries such as China and other Asian countries that are now better investment destinations. Due to the shortfalls in the inflows of expected capital from external sources, government has been competing with the private sector over the limited funds...
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...life stages, you will have different needs. As a parent, you would want your children to learn the value of money and how to manage it wisely. As a retiree, you would want to enjoy perks that reward you for your years of hard work. Whether you are single with a career, married with kids, working as an OFW or empty nesting, BDO has a variety of deposit accounts tailor fit to your needs. What’s more, our extended banking hours enables you to keep your money at hand, throughout the hours of your day. BDO continues to find ways for you, keeping your money safe, managing and growing your funds so that through rainy and sunny days, your money’s growth potential is maximized. Trust and Investments- peso-denominated UITF’s, dollar-denominated UITF’s and customized portfolio mngt.=> Unit Investment Trust Funds. Unit...
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...protecting and enhancing your wealth in the financial markets. This article introduces some of the most important concerns in the world of investment. Your Objectives Let’s start with your objectives. While clearly the goal is to make more money, there are 3 specific reasons institutions, professionals and retail investors (people like you and me) invest: For Security, ie for protection against inflation or market crashes For Income, ie to receive regular income from their investments For Growth, ie for long-term growth in the value of their investments Investments are generally structured to focus on one or other of these objectives, and investment professionals (such as fund managers) spend a lot of time balancing these competing objectives. With a little bit of education and time, you can do almost the same thing yourself. Knowing Yourself – Your Risk Profile One of the first questions to ask yourself is how much risk you’re comfortable with. To put it more plainly: how much money are you prepared to lose? Your risk tolerance level depends on your personality, experiences, number of dependents, age, level of financial knowledge and several other factors. Investment advisors measure your risk tolerance level so they can classify you by risk profile (eg, ‘Conservative’, ‘Moderate’, ‘Aggressive’) and recommend the appropriate investment portfolio (explained below). However, understanding your personal risk tolerance level is necessary for you too, especially with something...
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...Step in investment Investing is definitely a good thing in order to get better income in the future with various types of return. There are seven steps that we must follow to invest in healthy ways. 1st step Before we invest in anything, we must make sure that we have strong economic foundation. This prerequisite is the important thing to consider not only for personal investor, but also for business, government, and financial institution. By managing our budget we will know our financial condition. Make sure that the money spends is less than our earning, total assets are more than the liabilities, and all debts are under control. Besides, we must put aside money for emergency purpose at least 6 months net salary. For example, my current salary is RM2500. After deduct all expenses, I have RM200 that can be used for investment. 2nd step Establish our goals. For personal investor, goals can be retirement funds, business launch, build house, child’s education or wedding, fund in case of sick or disabled, or to increase future income. For business, government, and financial institution, their goal may be for projects fund such as to open new branches, build bridges for public user, to open other business in order to generate better income. Let’s say, my goals is to increase income to start a business after retirement, the grocery store, and to buy property. 3rd step By establishing our goals, we are able to adopt the investment plan by determine the date to met the goals...
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