Bigger payouts for directors despite economic woes

 

When Malaysian investors once again got up very early in the morning this week to beat each other to yet another state-promoted unit trust, it says a lot about their beliefs in matters of facts.

Although it started selling soon after the unsold Bumiputera portion of the Amanah Saham Wawasan 2020 (ASW) were snapped up by investors, the Amanah Saham 1Malaysia (AS 1Malaysia) still attracted much interest.

The only possible reason, apart from it being launched close to the ASW, why response was relatively slower than other unit trusts of Permodalan Nasional Bhd (PNB) is that the approved fund size for AS 1Malaysia is quite large, at RM10 billion.

But the spirit shown by subscribers of the AS 1Malaysia was the same as that towards previous PNB unit trusts - its a worthwhile investment.

Trust funds like the AS 1Malaysia are not short-term investments. Unlike direct equities, you don't buy trust funds now and hope to sell at the end of the week for profit.

Promoters of unit trusts usually say it could take anything between five and 15 years before that trust fund you subscribe makes any meaningful gain.

So the act of buying a trust fund should be similar to when we buy life insurance policies. When purchasing life insurance policies, one must not only consider the product offered but more importantly whether the insurance company itself would still be around when its time to make a claim.

As a fund manager, PNB is solid as a rock. There has been no audible complaints so far about returns on the unit trusts it sold. That its unit trusts have been well received speaks volume about investor confidence in its strength.

By and large, PNB has been a prudent fund manager. It may not be as robust as some of the international funds, but it has been giving consistent returns to unitholders.

But more than that, investor confidence in PNB is also a direct result of their confidence in Malaysia's future.

Nobody in their right frame of mind would queue from four o'clock in the morning for a chance to subscribe to a long-term investment instrument if they don't believe in the country's future.

And we are not talking about queuing just to mark an 'X' next to a party symbol here. We are talking about voluntarily being up at four in the morning, joining a queue, to put our cold hard cash on the counter.

That's not mere confidence in the nation's future. That's more like conviction.