Friday, April 13, 2012

Simple Comparison between Fixed Deposit Placement vs my MAAKL Mutual Funds

I was doing a simple calculation and comparison for the RM5K which I invested in MAAKL Dividend Fund and MAAKL Al-Fauzan Funds in the middle of year 2007. If the RM5K still sit in my bank fixed deposit, by now, my capital will be RM5,796.37 (assuming 3.0% annual interest). The calculation as below:
YearCapital (RM) Interest (RM) New Capital (RM)
Year 1 (2008)    5,000.00        150.00          5,150.00
Year 2 (2009)    5,150.00        154.50          5,304.50
Year 3 (2010)    5,304.50        159.14          5,463.64
Year 4 (2011)    5,463.64        163.91          5,627.54
Year 5 (2012)    5,627.54        168.83          5,796.37



But, because I invested the RM5K in MAAKL Dividend Fund and MAAKL Al-Fauzan Funds (RM2.5K for  each fund), I earned additional RM2,254.03 (based on unit price as at 12 Apr 2012). The fund details as below:
No Fund Name Units Unit Price (RM) Estimated Value (RM)
1 MAAKL DIVIDEND FUND 10,010.63 0.3772 3,776.01
2 MAAKL AL-FAUZAN 9,830.46 0.3538 3,478.02
Total (RM) 7,254.03
Note: Unit Price as at 12 Apr 2012

I am happy for the return on investment for both of my MAAKL Mutual Funds. There were times when I was thinking to sell off these funds, but at the end I convinced myself to give a minimum of 5 years for both funds. Again, of course, fund performance varies from time to time. And always understand and aware that for unit trust investment, there are risk involved. For fixed deposit, the risk is very minimal.

Hope the above illustration can provide some insight for those who are still thinking whether or not to transfer your fixed deposit to unit trust investment. If the fixed deposit are additional cash which you are not going to use for the next 5-10 years,  you can consider to invest in unit trust. Again, as a reminder, there's always risk in investment. Higher risk but higher return. Think about it, make your own decision and be responsible for your own decision.

2 comments:

  1. There is no doubt your Unit Trust will outdo the fixed deposit BUT it is adviceable to do dollar cost averaging with Unit Trust investment. With Dollar Cost Averaging, your chances of loosing money in unit trust is much much lesser.

    Just my 2 cents! :)

    ReplyDelete
    Replies
    1. Yes, kampunginvestor... DCA minimize the chance of loosing money in unit trust investment.

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