Public Mutual Bond Funds (Part 2)
Public Enhanced Bond (PEBF)
Strategy: Primarily invests in fixed income securities comprising sovereign bonds, corporate debt securities redeemable loan stock and money market instruments. It may also invest up to 20% of its NAV in equities of defensive stocks.
Q2 2006 Investment spread:
Fixed income securities - 66.5%
Money market - 15.5%.
Equity - 18%
Comment: Obviously, this bond fund does consist of ~20% equity. In my opinion, regardless how defensive these stocks are, they will still be swung by big market when KLCI starts tumbling. In addition, I prefer to control the equity:bond ratio myself by invest into the 100% bond fund and selectively choose my own "defensive" stocks.
Public Select Bond (PSBF)
Strategy: Primarily invests in fixed income securities which has a remaining maturity of 7 years and below. It may also invest in redeemable loan stock with convertible features.
Q2 2006 Investment spread:
Fixed income securities - 39%
Money market - 61%.
Comment: In my opinion, it is a very conservative bond fund. By limiting the selection to short and medium-term bond, this fund can minimize the risk of inflation, interest rate fluctuation and probably defaulting risk. However the equation of low-risk low return cannot be altered. I think it is only suitable for investor who is very risk adverse or very pessimistic of the future economic outlook. But if that's the case, why not just put into bank's FD?
Strategy: Primarily invests in fixed income securities comprising sovereign bonds, corporate debt securities redeemable loan stock and money market instruments. It may also invest up to 20% of its NAV in equities of defensive stocks.
Q2 2006 Investment spread:
Fixed income securities - 66.5%
Money market - 15.5%.
Equity - 18%
Comment: Obviously, this bond fund does consist of ~20% equity. In my opinion, regardless how defensive these stocks are, they will still be swung by big market when KLCI starts tumbling. In addition, I prefer to control the equity:bond ratio myself by invest into the 100% bond fund and selectively choose my own "defensive" stocks.
Public Select Bond (PSBF)
Strategy: Primarily invests in fixed income securities which has a remaining maturity of 7 years and below. It may also invest in redeemable loan stock with convertible features.
Q2 2006 Investment spread:
Fixed income securities - 39%
Money market - 61%.
Comment: In my opinion, it is a very conservative bond fund. By limiting the selection to short and medium-term bond, this fund can minimize the risk of inflation, interest rate fluctuation and probably defaulting risk. However the equation of low-risk low return cannot be altered. I think it is only suitable for investor who is very risk adverse or very pessimistic of the future economic outlook. But if that's the case, why not just put into bank's FD?
Labels: Bond Fund
posted by velo at 4:15 PM
0 Comments:
Post a Comment
<< Home