It has been quite some time since we last enjoyed decent interest on our savings. With saving rates close to zero and inflation persistently high, putting aside money for future uses no longer seems a prudent move for most. Is there a WISEr choice?
Author : FSM
Untitled Document
It has been quite some time since we last enjoyed decent interest on our savings. With saving rates close to zero and inflation persistently high, putting aside money for future uses no longer seems a prudent move for most. Is there another way instead of only placing money into a bank savings account? Is there a WISEr choice?
Do you know that it is possible to enhance the returns by more than two times just by taking a little more risk? Just how much more of a risk are we talking about here? How about a maximum drop of not more than 0.9% over the last 12 years! This is actual performance taking into account all annual expenses and plotted it over the last twelve years since December 1999 (see chart 1).
Table 1: 12mth fixed deposits vs FD Alt. Port., end-1999 to end-2011
Year
12 month Fixed Deposit
Fixed Deposit Alternative Port.
2000
2.50%
3.30%
2001
2.20%
1.77%
2002
1.40%
3.40%
2003
0.90%
0.50%
2004
0.70%
1.64%
2005
0.80%
0.65%
2006
0.90%
2.93%
2007
0.80%
3.15%
2008
0.70%
1.74%
2009
0.60%
3.95%
2010
0.50%
2.57%
2011
0.40%
1.80%
Outperformance in bold. Source: iFAST compilations, performances are based on bid to bid prices, and are net of all annual expenses and fees.
What the market wants
The typical alternatives offered in replacement of savings are actually aplenty. The problem with all these is that they all have to be purchased with some sort of sales charge. It is a big stumbling block to consumers, because if they are “in the red” the minute they place their money into such a product, then they find it hard to view this as “savings”.
In short, if they cannot BREAKEVEN on day 1, it is not a savings option!
WISE @ Fundsupermart.com
Fundsupermart has always been at the forefront of change in the unit trust industry. We sold funds at half the sales charge of what banks were doing in the year 2000, and we have continued to bring our sales charge down over the years. Now, we will make yet another major step, by bringing the sales charges of more than 50 funds (more than half of all of our bond funds) down to zero, and lower-to-higher tier switches capped at 0.5%.
This bold step brings investors a new concept of investing: 0% sales charge investing. In doing so, we have now created a way for our customers to be SAVING with Fundsupermart, as well as INVESTING with Fundsupermart. Breaking even on day 1 when buying these 50 funds is now no longer a dream, but reality!
iFAST and/or its licensed financial adviser representatives may own or have positions in the funds of any of the asset management firms or fund houses mentioned or referred to in the article, or any unit trusts or Singapore Government Securities bonds related thereto, and may from time to time add or dispose of, or may be materially interested in any such unit trusts or Singapore Government Securities bonds. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund's prospectus. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer in the website.
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