Thursday, October 8, 2009

DBS 1% Unit Trust Sales Charge

DBS Unit Trust Sales Charge has been publicized widely recently on papers. This is 50% cheaper compared to the 2% charge by online portals and financial advisors. Moreover, financial advisors, especially independent ones quote a wrap fee that demands their clients to pay 0.5%-2% of their asset under management (AUM) annually. This is a hefty charge, considering a 1 million portfolio, you will be paying $10,000 (1%) to your financial advisor yearly, even if your portfolio is underwater, losing 10% annually. Also, the wrap fees force sells your best performing unit trust (even if it is in the red) to pay for the management fees quarterly.

Hence, engaging such portfolio advisors will mean feeding them as long as you live. Unless your advisor can earn you over and above the market expected returns of 8% per annum, you will be better off investing on your own.

As soon as I read the advertisements, I went over to Fundsupermart to search for good DBS fund house deals. One of the funds, DBS Global Properties Securities Fund caught my eye. This fund invests in REITS around the world and pays out quarterly dividend (in units) regularly.

Below is the payout history:

At current price of $0.60, investors will be able to get a decent yield of 10% and diversify into global property equities and ride the property recovery market.

I do not know how good the fund is, but it may be a good deal for investors looking for a potential place to park their CPF ordinary funds.

I have written once on why I do not like Unit Trust here, but this fund may change my perspective.

I might just invest $5,000 CPF money for some global exposure to the property market.

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