Monday, December 28, 2009
Unit Trust Dividend Investment (Failed)
Results: Half Failed
Note: After going through the historical records, after dividends payout, the fund price will reduce to similar amount also.
[Updated 5 Apr 2010] Note: Except for this Bond: Ftif-templeton Glb Bond A(Mdis) Sgd
Do you know that some unit trust gives out dividends?
Their dividends is quite fixed and you can actualy 'predict' their next dividend payment. Because of this, you can actually make a quick profit.
Previously the profit is not much because of the switching limitation; where extra charges will be incurred.
Now that FSM has no-limit switching, we can actually switch to the dividend paying funds just before the ex-Date and switch back out on the ex-Date itself.
E.g. Fund A declares Dividend ex-Date 1st october 2009 (Thursday).
You need to purchase the fund before 1 October, i.e. you funds must be transacted on or before 30 September 2009 (Wednesday).
For cash purchase it'll usually takes T+1 day and for switching it'll take T+2 days.
Purchase (T+1 day)
If I want to buy Fund A to enjoy the dividend, I will have to place an order, including transfer of funds before the cut-off time (3pm for FSM), on or before the 29 September (Tuesday).
So that my transaction date will be on 30 September 2009 (T+1).
Switching (T+2 days)
So if I want to switch my Fund B to Fund A to enjoy the dividend, then I have to switch my fund latest by 28 September 2009 (Monday).
So that my transaction date will be on 30 September 2009 (T+2).
For the month of January, I will recommend to switch your funds to:
1) 2 January: AllianzGI RCM Glb High Payout(SGD): Avg Dividend 4.24%
Risk 8; Minimum $1000; CPF, SRS; 2% Sales Charge
2) 2 January: Schroder Emerging Markets Bond Fd: Avg Dividend 2.97%
Risk 5; Minimum $1000; SRS; 1% Sales Charge
On 2nd January, you can switch all your funds back to your normal allocation.
Finally managed to compiled the list of all the funds that I think it's worth investing.