Need ur advise: buy fund
Hihi,
Assume i have no investment knowledge and experience (actually really not much), want to buy fund to store money, can bear just relatively low risk. Any advise how to kick start?
1. Buy from HSBC account ok? Or from other bank / fund house? Or not much difference? In terms of variety / management fee / service charge?
2. Where to find a list of available fund? And the historical return?
3. For different investment period, say 1yr, 1-3yr, or monthly investment for long term, any exact recommendation?
4. Shall i just make appointment to talk with HSBC investment sales / manager? Useful or reliable?
4 則留言:
1. Buy equity fund => rely on fund manager's stock-picking skills. History shows that they are no better than a monkey picking stocks by throwing darts on a chart of stocks.
2. Buy equity fund => You paid 100, the subscription fee is usually 5, showing by default you pay 100 and only get 95 at the beginning... no good.
3. Buy index fund will be better than equity fund - (a) subscription fee is lower, (b) risk is relatively lower I think. Option: Tracker Fund (2800.HK), brokerage commission is only 0.25% (vs equity fund 5%)
4. If you can accept some more risks, put all you money in HSBC. You won't regret in the long run. The average dividend yield is close to 5%, and the capital gain can be substantial in the long run. The only problem is evey board lot costs about $50,000, you can either buy a board lot every quarter/semi-annually. Alternatively, there are many monthly saving plan which you paid as low as $1000 to buy a particular stock like HSBC. HSBC, BoC and other major banks offer this service. The brokerage commission/service charge is relatively high for this service, but still far below than that charged by fund house I think.
Good luck.
some views to share too:
1) some HK equity funds do perform better than tracker funds / HSI
2) most banks BoC/HASE/HSBC/DBS offer discount on fund subscription fee (~2-3% off)
3) funds also allow exposure into international markets (e.g. US, Europe, APAC, BRIC, etc) and across different asset classes (e.g. bonds, FX)
4) putting all money into a single stock seems violate the golden rule of diversification. Think about HKT (0008), in 10-20 yrs ago, it was the largest blue chip.
nevertheless, i m still wondering which approach (fund vs stock) is the best.
further thoughts:
1. some hk equity funds do perform better than tracker funds - but it will not be easy for you to find one which consistently beat the trackers, after deducting the management fee and up-front subscription fee they charge
2. the discounted subscription fee still eats a lot of your gain, not to mention the annual management fee / performance fee they are going to charge. If you are buying fund of funds, then you will need to pay twice the management fee.
3. good point - if you want international exposure then funds probably are the right choice at the moment - as a small investor even though you may be able to access to broker with international execution capability (e.g. using e-trade), you won't have the energy / time to do the research for overseas markets.
4. diversification works some time but not all the time (say if market goes south as a whole). buying a few stocks for your portfolio (instead of 20) will provide adequate diversification you need - the marginal benefit decreases tremendously as you add more stocks to your portfolio.
having said that - at this stage I probably won't put all my eggs in one basket... but, if you are choosing between funds and HSBC I will definitely go for the latter, though it just reached its historical high.
three links worth to have a look:
tracker fund:
http://www.hk.morningstar.com/hkg/fund/FundQT.asp?Symbol=F0000000BO&Section=TOTALRETURN
first state:
http://www.hk.morningstar.com/hkg/fund/FundQT.asp?Symbol=F0000000GZ&Section=TOTALRETURN
schroder:
http://www.hk.morningstar.com/hkg/fund/FundQT.asp?Symbol=F0000001IW&Section=TOTALRETURN
a book worth reading too:
Strategies for Investment Success: Index Funds
http://www.amazon.com/Strategies-Investment-Success-Index-Funds/dp/0471221392/sr=1-1/qid=1160314772/ref=sr_1_1/104-0932550-3658319?ie=UTF8&s=books
i agree most of the time, (especially in US market) index funds are good alternatives for mutual funds, but at this moment, i still don't think HSI is a good index to follow.
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