Low cost investment fund

Dear Mr Tan Kin Lian

I have savings invested in a large, well-diversified, (fund of funds) global unit trust for seven years already.

The returns so far have been meagre. I guess that was due to the large allocation of investments in the US market.

Is it better for me to switch to other funds, like the more vibrant and fast moving Asian funds? I am in my mid forties and investing for the long term for my retirement needs.

REPLY:

What is the return that you obtained in USD for this period? Is it an equity fund (i.e. 100% invested in global equity)? Is it a low cost fund?

If you have invested in an indexed fund in the S&P, I think that your return should be quite good.

Read this FAQ:
http://www.tankinlian.com/faq/returns.html

The benchmark return on global equity (converted from USD to SGD) is 6.5% over the last 5 years and 9.1% over 10 years. If you deduct 0.5% for the management fee, it should be above 6%, Which I consider to be quite attractive.

It is better to invest in a Global Equity fund, rather than a regional fund (i.e. Asia). Over the short term, certain regions will perform better than others, but they will average out over the long term.

If you invest in the S&P, it contains many multi-national companies with global operations. You have exposure to Asian markets through these companies