ONG SIN YEE asked 1 year ago
Hi KC,
A) Lion Advanced Strategic Fund @ RM 1.048
-mixture of equities, fixed income securities and money market
-New fund since Sept 2020
-fund performance 2020 above weighted benchmark
B) Lion Enhanced Equity Fund @ RM 2.025
-80% to 100% of the investments are in equities
-fund performance 2020 below weighted benchmark
My opinion fund A is new fund, can’t see obvious comparison performance between these two, it is more conservative, low risk low return than Fund B ? but it is cheaper so can get more unit share.
This is my understanding.
Thank you advance for your guidance.
Sin Yee
KCLau Staff answered 1 year ago
Strategic Fund gives the fund manager flexibility to do “switching”. Meaning they can have higher allocation in equity when it is undervalued, or lower allocation when it is overvalued.
But looking at their 2020 annual report, their performance has not been beating the benchmark.
Annual Report for all the funds 2020: https://www.greateasternlife.com/content/dam/great-eastern/my/homepage/about-us/media-centre/unit-funds-annual-report/great-eastern-unit-funds-annual-report/2020/gelm-ufar-2020-eng.pdf
For the price, it is in fact irrelevant. All the funds started from RM1.00.
The price you see is the current price. The funds never do distribution. So the price is the Net Asset Value built up over time. Lower price doesn’t mean it is cheap. I just means that the NAV haven’t grown much, could be due to underperformance, or simply it is new (like the case for Lion Advance Strategic Fund)
For the long-term I would go with high equity exposure.
You can also consider to allocate to a few funds too.