A Sunday Times article said that unit trusts are not transparent. This is not correct. The unit trust trade on its net asset value at the end of each day. The fund manager accepts your investment in cash, gives you the units, and then invest the additional cash. It creates liquidity. For a long term investor, this is a good arrangement.
A ETF trades on the price quoted on the exchange. This may be transparent and tradeable, but it may suffer from the lack of liquidity, if you wish to trade in a large volume.
Each arrangement has its advantages and disadvantages. The most important factor is the expense ratio. If the unit trust or ETF gives a low expense ratio, a long term investor will gain from it, compared to high expense funds.
Saturday, April 26, 2008
Personal attacks
I have blocked many unsubstantiated remarks levied against NTUC Income, its products, its agents and management.
I allow some of the negative comments to go through, if they are not personal and make a point that is based on facts.
I have also received personal attacks against me. I block them, if they are personal and malicious. However, I have decided to allow some of them to go through.
I allow some of the negative comments to go through, if they are not personal and make a point that is based on facts.
I have also received personal attacks against me. I block them, if they are personal and malicious. However, I have decided to allow some of them to go through.
Investment linked plans from NTUC Income
Someone, probably a NTUC Income agent, made an anonymous posting about the regular premium investment-linked plans (namely the Ideal plans ID2 and ID7) introduced by me when I was CEO. He (or she) accused me of being unfair in recommending against investment linked plans now. Although it was a personal attack against me, I have decided to post the comment.
Those who correctly read my blog knows that I am recommending against regular premium ILPs that take away two years of savings, especially sold to customers who are not informed about the high charges.
The Ideal plans introduced during my time have the following upfront charges:
ID2 - 7 months premuim
ID7 - nil
They are much lower than the charges of the regular premium ILPs sold in the market. Read this comparision:
http://www.askdrmoney.com/Ins_ILP_RP.htm
The Ideal ID7 is a good plan for the customer. But the insurance agents are not willing to sell it, as they earn a low commission. You have to buy it from the business center (if they still offer it).
You can avoid all the upfront charges by investing in the STI ETF. For the life insurance cover, you can buy a decreasing Term insurance. Read this FAQ:
http://www.tankinlian.com/faq/low.html
Recently, I withdraw a large sum of money from the money market fund and wanted to re-invest in the Combined Fund. Although it was a topping up of any existing policy, I was asked to pay a upfront spread of 3% for the new investment. I decided against it. I took out the money and invested it in the stockmarket directly.
By not taking care of the interest of an existing policyholder, NTUC Income has lost a large investment.
Those who correctly read my blog knows that I am recommending against regular premium ILPs that take away two years of savings, especially sold to customers who are not informed about the high charges.
The Ideal plans introduced during my time have the following upfront charges:
ID2 - 7 months premuim
ID7 - nil
They are much lower than the charges of the regular premium ILPs sold in the market. Read this comparision:
http://www.askdrmoney.com/Ins_ILP_RP.htm
The Ideal ID7 is a good plan for the customer. But the insurance agents are not willing to sell it, as they earn a low commission. You have to buy it from the business center (if they still offer it).
You can avoid all the upfront charges by investing in the STI ETF. For the life insurance cover, you can buy a decreasing Term insurance. Read this FAQ:
http://www.tankinlian.com/faq/low.html
Recently, I withdraw a large sum of money from the money market fund and wanted to re-invest in the Combined Fund. Although it was a topping up of any existing policy, I was asked to pay a upfront spread of 3% for the new investment. I decided against it. I took out the money and invested it in the stockmarket directly.
By not taking care of the interest of an existing policyholder, NTUC Income has lost a large investment.
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