My unit trust income portfolio started 5 years ago is currently 8% in the red. Should I wait for it to break even, cut loss for all or maybe half and invest with e.g. Robo Advisor for better returns?

Hi S1,

I have a UT income portfolio myself, and while I'm in the red at the moment, taking into account the fact that I am doing RSP into this portfolio during this dip, I do believe that a UT portfolio with a moderate 4% withdrawal and some capital appreciation is possible. In fact, one of the many layers of income I am building for my own retirement is a UT income portfolio, amongst other layers.

I'd like to point out that there's nothing you can do about the management fee for a UT, this is already priced into the UT itself. What you can do something about are things like sales charges, which really should be zero because they are non-value adding. If your portfolio is being managed by an advisor, your advisory fee should be kept low as well.

It's also important to construct a portfolio of the right funds, with a slightly heavier weight towards bond funds due to their stability and inherent income producing features. You'll want to ensure that these funds are suitable for the long run and have a good return from their underlying assets.

No time for acting nervously, sure.

The more important note: did You really realize that unit trusts (mutual funds) are a high fee vehicle, created by mainstream finance industry to (still) disadvantage the retail investor?

And are You sure You selected the optimum asset allocation with Your unit trusts?

Rationale = 2 reasons:

-much too high fees

-the value proposition that an active fund manager can do better than the index (= average market returns), but sorrily finance studies again and again evidence that on a long term perspective active mutual fund managers underperform (!) the index.

Better switch to passive indexing stock ETFs.

It would be very interesting to know, which unit trusts You are holding currently.

If You post the names and tickers of Your holdings (without mentioning Your absolute SGD investments) here on this thread I'll give you a quick analysis if You like.

otherwise, what surely not to do is all written up here:

https://seedly.sg/questions/what-is-your-genera...

take care, think for yourself and deliberate if your finance professional acts really to the best of YOUR interest (... probably not, I'd say, if he recommended unit trusts to You in the first place ...)​​​