Fund managers have had to work hard over the past years to boost the performance
of their investment portfolios amid the growing competition in the investment industry.
Aside from achieving good performance on their portfolios, fund managers are constantly
looking for new ways to boost income. Players in the unit trust industry are constantly
launching more innovative products in order to capture a bigger share of the market.
We have witnessed that the performance of some local unit trusts have been volatile
for the past several years under different market conditions. Some fund managers
blamed the poor performance on the volatility of the market trends. But the more
obvious reason could be the fund manager's ineffectiveness in stock selection in
different market conditions.
There are other funds which have been performing well despite the ups and downs of
the market trend. There were funds which outperformed the KLCI over a longer period.
But there were other funds which have even managed to fall below the fixed deposit
rates amid positive stockmarket environment. To support this view, in 1996 there
were funds that underperformed the KLCI severely and even managed to fill below the
average fixed deposit rates.
There are more than 70 funds to choose from in the local unit trust industry. Investors
should be wise in selecting what is best for them. Instead of relying on fund managers
and their fees, probably you should learn some basic skills to enable you to start
managing your personal investment portfolio.
Start your own portfolio management. Execute simple financial planning. Effective
stock selection is key to enhanced investment performance and thus, you will have
to pay extra attention on this area. Buy some shares, let's say, 5 companies. Be
a long-term oriented investor that is built in a strong foundation with holdings
in 5 solid blue chip companies and probably add additional stocks for effective diversification.