What are Your own longterm experiences with Unit Trusts / Mutual Funds ?

Just made some calculations based on FSMOne Fund Screener.

https://secure.fundsupermart.com/fsm/funds/fund...

Though some of the calculated 'annual fees' seem exaggerated (max = 3.55% for United Asia Consumer Fund SGD, erroneous possibly) the mean annual fee (TER) of all equity Unit Trusts, where a number is given, is very high:

astonishing mean 1.86 % !
Compare that to 0.51% mean given with the screener for all equity ETFs.
These 1.86% per year seem low on first glance. But after several years of investing these terribly high fees, I believe, will eat a significant part of any performance away.

Some mention on this forum that UTs/mutual funds are still a good thing for niche markets that could be inefficient. Some media mention that UTs could make sense for bond investing. Some like them for income.

But what are your real world longterm experiences, good or bad with UTs ?

And what are Your conclusions today ?

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What are your thoughts?

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Frankie Rappaport

09 Aug 2021

And some go into REITs for income

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1M45

Edited 09 Aug 2021

UT hardly beat S&P500 index. But i believe alot able to beat STI index. When creating an income portfolio, people tend to go for sg equities to avoid 30% dividend tax. When create a income portfolio, capital appreciation become secondary (but still important), whether fund underperform the index is not pirority, cashflow is more critical, as long the investment dont depreciate overtime.

In sg, there is no monthly dividend payout stocks, if one trying to create monthly cashflow portfolio. There is 2 methods to do it:

1) staggering all the stocks based on the payout month, so that each month there will be cash coming in.

2) get a UT with dividend monthly payout. Most of the time, the underlying are bond. And give a fixed dpu.

However, both methods will have pro & con.

1) staggering. Some of the stocks that payout at particular months are either trending down or dividend yield too low, less than 4%p.a. so not possible to have cashflow monthly.

2) UT. For Fixed income , capital appreciation usually non-existence (stagnation), but provide constant reliable monthly cashflow. Thus when selecting a monthly payout UT at least 6% p.a. Dividend yield.

Thus, IMO, is best to combine both method to strike a balance between capital growth and cashflow.