1.      What is the minimum amount you can invest in mutual fund (Malaysia)?

 

2.      Identify three potential sources of return to mutual fund investors.

 

3.      List any 2 of mutual funds advantages and disadvantages.

 

4.      Explain any 3 fees & charges charged by mutual fund company.

 

5.      After graduation, you have been working with Kenanga Investor Berhad as Unit Trust Agent. You have been approached by your new client, Ali. He is Malaysian, aged 28 and has been working in an international company for 4 years. He never invests his money in any investment plan except in Amanah Saham Bumiputera (ASB) by PNB. Advice Ali on how he can start to invest in mutual fund / unit trust in Malaysia. 

 

6.      If an investor wants to withdraw his / her EPF account for mutual fund investment, which account that is allowable for such withdrawal? 

 

7.      Laura is 34 years old and has RM70,000 in her EPF Account 1. She plans to invest in mutual fund with ABC Corporation. The Net Asset Value (NAV) is RM0.98. The sales charge is 4%. Assume she purchased the mutual fund. After 3 years, she wanted to redeem her investment. The NAV on that day is RM1.01. She has earned dividend 3 times during the holding period amounting RM1.50. 

a.     Calculate the amount that she can invest in mutual fund based on her EPF.

 

b.     Compute how many shares will she earned. (Assume GST has been absorbed).

 

c.     Compute the Holding Period Return (HPR). 

 

8.      A year ago, an investor bought 500 shares of a mutual fund at $7.50 per share. Over the past year, the fund has paid dividends of $0.50 per share and had a capital gains distribution of $0.80 per share. 

 

a.     Find the investor's holding period return, given that this no-load fund now has a net asset value of $8.00.

 

b.     Find the holding period return, assuming all the dividends and capital gains distributions are reinvested into additional shares of the fund at an average price of $8.75 per share.

 

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- Portfolio Management
 Investors purchase funds because they do not have the time or the expertise to manage their own portfolios. A mutual fund is a relatively inexpensive way for a small investor to get a full-time manager to make and monitor investments.

- Portfolio Diversification
 Owning numerous securities reduces risk
 
 

- Substantial Transaction Costs
 1. Management fee
 2. Commission fees on load funds

- Taxes
When a fund manager sells a security, a capital-gains tax is triggered. Investors who are concerned about the impact of taxes need to keep those concerns in mind when investing in mutual funds. 

Question 4

Other transaction fees- switch fees, short-term trading fees, redemption fees
account fees- registered plan fees, minimum account balance fees

Front-end load or initial sales charge (ISC) - some mutual funds charge a fee when you buy your units or shares
Back-end load or deferred sales charge (DSC) 
Low load or low sales charge (LSC)

Question 6

Account 1