How to Construct A Profitable Unit Trust Portfolio



how to construct a

profitable universal portfolio

okay so the first key factor is

roi return on investment alignment

okay what do i mean by that you see when

you have a portfolio you invest in a


with ninety percent bond fund and ten

percent fpd fund

and you tell me that am i'm saying it

mean for

eight percent analyze return

do you think that's possible for you to

achieve that

eight percent return very unlikely

no because you've got so many bonfire

and bonfire

generally give you maybe four to five


generally no so that the chance of you

achieving eight percent

annualized return is quite unlikely and

in order for you to achieve eight

percent annualized return

what you need to do is to consult an

investment portfolio

of maybe having like 50 percent at least


in equity okay or maybe 60 in equity


and maybe 40 percent important fund so

by having a portfolio that then your

your chances of achieving the target


is much higher so so the benefit

of understanding and making sure that is


roi alignment uh make sure that you

own a portfolio that will achieve your


okay and it's not that you just simply

buy or you let the agent simply buy the

fund for you

okay uh and then you just hope that you

can achieve your target return

uh i i'm i'm i'm not so

sure that'll be very useful to you now

the second key driver

for a profitable universal portfolio

is diversification

so i always uh

advocate that we need to diversify

our unique trust fund not only by

asset classes by country

but also by different unit trust company

as well if you can remember just how i

shared you before about

like unit trust investment

especially in equity asset class

will always rise us okay but

okay then but what i mentioned just now

is the equity market

of many country okay

and but if you look at the investment


there are so many bigger countries with

bigger market capitalization compared to


so so for that matter if we only invest

in malaysia

then our performance okay is very much

dependent on

a small company small country like


and we will miss all the opportunity

outside of malaysia

so if i were to show you another chart

we can see also here when we invest only

in one

asset class the investment also

become very volatile you can see here

if we invest in malaysia equity no asset


only we don't invest into any other

asset class

uh because all the equity funds we buy

are all in malaysia uh and whether it's

small cap

whether it's a big cap no it's all in

malaysia then we can see

what happened no to in 2011

look it drop to the

middle stay in the middle

and then drop to the bottom into the one


go up slightly into zero one five

drop again into the one six and then go

to the middle

into the one seven then

stay middle and 2019 drop again

and year to date also at quite near


so basically

it is very hard for us to guess which

asset class will perform better this

year or perform better

next year so that's why what i always

advocate is that

since that we know that equity market of

the world will continue to go up

then why don't we consult a portfolio

that comprises of all these asset cards

malaysia equity emerging market market


asia ex-japan equity emerging market

equities global bond

u.s equity global equities japan equity

asian-born europe equities so

by by diversifying into

all these different asset class so uh

in the block manner you you will get a

what i call a diversified portfolio

and you can see how diversified

portfolio performed over the years

you can see now here you go here go up


no you always say in the middle no it

never dropped to the bottom

so it also never go to the top okay so

this is what i mean by

by uh having a diversified portfolio

across different asset class

it helps you to grow your asset

so with very minimum volatility

okay so for example

a few years ago i got a client who when

he came to see me

he told me that he was advised to invest

in all the 200 000 that he has got into

mainly malaysia's small cap fund

so the performance of this small cap

fund as you all know

is like very watertown so it go

up and down no very aggressively and

and that's what happened to my clients

unit trust portfolio so

for that matter when we got him to

diversify his investment

into other asset class overseas

then now he can get into more

opportunity outside malaysia

and then he also enjoyed a better return

okay next

another key factor i'm going to talk

about here is best of breed fund


uh this is not the first time i

mentioned our best update fund selection

because i always advocate

uh we should always cherry pick

the investment if we make whether we are

doing unit trust investment

share investment property investment or

any kind of investment

so let me share with you how whitman


a fund uh to consult a portfolio okay

so you can see here there are more than

500 over funds now maybe 600 over

700 already and we have more than three

we got more than 30 over company in


offering unit transplant so what we do

is that we will use a criteria

of like you must fulfill the criteria or

at least three years and now

so if you do not have that we will not

even consider you because

uh then we will not be able to

uh look at your uh performance and your

track record you know in a more

complete picture then we are left with

150 overfund who has got more than three

years of history

and we will use four p criteria for our

best of bitcoin

selection we will consider the factor of

parent company

the people the fund manager who manage

it the process

which is the investment style and the


okay the track record so as you can see

here when we saw that best of breed

we are not talking only purely uh based

on the past performance

because we all know past performance

does not guarantee future

good results so after considering that

we further filter the fund to about 20

over fund

and we will uh further group this one

you know into the criteria

based on clients objective and clients

risk tolerance

so we will end up recommending maybe to

one client

with one specific risk profile about


or eight funds in the particular

portfolio so so you can see

it is a very uh top-down approach to

eventually come up to

the best of breed fund for the client to

invest into

so uh when to further explain what is

the best of bid fund

uh let me share with you you can see


these are the malaysia equity fund in

one company

and as you can as you can already see


you can see the fund even though they

are all malaysia equity fund

the performance are not the same they

are a who perform

very well uh compared to e

you know perform quite poorly uh

giving about about 16 percent and a

is getting 57 return over

five years period okay so in this case

obviously a is the best operate fund

among uh in company a

but if we were to look at

outside company a we look at a

bigger industry bigger

market we can see there's another fund

so called

growth okay which is performing

109 during the same

period of time so obviously given a

choice i'm sure

you would rather invest into this

particular fund

for your malaysia equity fund so for

that matter

that's why i mean that we must always


invest into best or bid fund when you


okay because the benefit of that is that

you will even though you are taking

the same level obese which means when

you are taking investing into

malaysia equity fund you are taking the

same level of risk

among this one but you are choosing the

fund with a higher

return potential so if you need


you should talk to your financial

planner so a competent financial planner

can help you to identify if you are

investing in best public fund

okay so uh also

you can also share with me whether

you invest into unit trust investment

because not everybody invests in you

needs trust but

so if you have you know uh please

answer that in the check box and then uh

if you if you do invest please tell me

how many asset classes do you invest


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