Investments worth keeping

In the name of diversification, I've been exploring and investing in a number of different investment types for the past few years.  They are giving me returns that range from 3% to more than 50% in extremely rare occasions and especially if they were having campaigns and promotions.    In my opinion, the main challenge to these investment instruments is that our EPF is giving good return, which make those giving lower than that unattractive.  After these years of trials and errors, I've resorted to keeping only the following in my investment portfolio for the moment.

• A savings account that still gives 5% profit rate p.a. since introductory promotion.  However, maximum deposit amount is kept at RM2k with no overall quota.  Good enough for emergency fund.
• A trading account with a broker that I've been with for more than 20 years.  I don't actively trade and some of the stocks are meant for investment rather than trading.  I just leave it open and active.  At least whenever I see opportunities in the market and feel like taking the chances, I have the means to do so.  In short, it can potentially give higher returns than EPF, but loss is also a possibility too.
• Another trading account-cum-savings because it is giving some 3+% p.a. on idle money in the account.  If no cash upfronted, it would act just like the other trading account above.
• A crowdfunding (debt funding) account that is currently giving around 7% p.a. return.  However, with each default, the rate can significantly drop and lately, the number of defaults is growing, hence my venture into another one below.  If I choose to only fund guaranteed debts, the nett return rate would be around 5.95%, which is still competitive.
• Another crowdfunding account that I opened due the degrading performance of the above.  At the moment, it is giving me a nett 6.3% return p.a. with defaults still standing at zero.  I also have one crowdfunding account here in Saudi that is giving up to 15% p.a. nett returns.
• Two trust fund accounts for me to experiment with unit trusts.  There are loss risks of course, but one fund subscribed last year is currently recording 70% unrealised return.  Should liquidate this soon.  Don't be greedy.
• A few FD accounts here in Saudi because FDs here are still giving around 4.5% to 5% return rates p.a.

Any other investments that are giving lower RoR p.a. than the above, in my opinion, are not worth keeping.  How much capital that I put in each?  That is not something that I want to share 😀

How to avoid unit trust’s sales charge?

If you’re used unit trust investment, you will notice that there is sales charge that comes with its subscription, usually deducted from the total amount.  That means, the number of units are purchased after deducting this charge from the total amount invested.  The sales charge can range from 1.5% to 3%, which can be significant if you are investing a large amount.

I recently found a trick to skip this charge.  Very simple.  Purchase the unit trusts via KWSP (EPF) i-Invest feature.  EPF allows its contributors to use up to 30% of their Account 1 (now Retirement Account) balance for the purpose of unit trust investment.  Based on my experience so far, there is no minimum amount required and all unit trusts purchased so far via -Invest are free of any sales charges.

If you’re concerned about using up your EPF savings, fret not because you can always voluntarily contribute up to RM100k/year to make up for the ‘lost’.  One of the cons that I can think of is that, you are limited to the list of funds that EPF has approved i.e. funds that are regarded as safe.  These usually exclude the high-risk-high-return ones.

Mission 1300

This is another challenge that I’ve created to keep my brain working.  I have SAR1k that I want to keep in my multi-currency account.  Sadly, it only accepts deposit in RM.  So I had to sell the SAR first before I can keep it in the account.  I sold the SAR1k and was paid RM1220 based on the exchange rate at the time.  Now, I want to buy back the SAR1k and of course I won’t be able to get it with RM1220 due to the spread.  At the current rate, I will need around RM1300 to buy SAR1k, hence the mission.  That is about RM80 or 6.5% more.  Can I possibly get it without using my own money?

Fortunately, there is a number of options nowadays for investments that offer high liquidity i.e. that allows you to withdraw anytime, as early as T+1.  I tried and compared three options.  The newly launched Maybank goal-based investment (GBI) and Halogen crypto currency-based fund (subscribe here), and a regular savings account that offers 3.88% p.a. profit.  GBI is like a portfolio comprising a maximum of five funds that you can choose and determine their respective percentages.  Most importantly, all of them, at the time of writing, are free of any subscription/sales charges.

 

Option	Buy date	Buy price (RM)	Sell date	Sell price (RM)	Return (RM)
GBI	13/05/2024	1220	31/05/2024	1249.33	29.33 👎
Halogen	15/05/2024	1220 (NAV 1.2048)	31/05/2024	1557.61 (NAV 1.5382)	337.61 👍
Savings	15/05/2024	1220	31/05/2024	1221.94	1.94 👎

Halogen is therefore clearly the winner in this case at this time around and managed to meet my target.  I finally bought the SAR1k happily ever after at RM1292.20.