November 19, 2012

CIMB-Principal PRS Plus Funds Explained

CIMB-Principal PRS PlusCIMB-Principal is the second panel member that launch Private Retirement Scheme (PRS) to the public in Malaysia, after Hwang PRS Solutions.  CIMB-Principal PRS Plus comprehensive offerings comprise of five funds based on investors risk appetite and investment styles (do it for me vs do it yourself).

At launch time, three core funds, namely CIMB-Principal PRS Plus Growth Fund, CIMB-Principal PRS Plus Moderate Fund and CIMB-Principal PRS Plus Conservative Fund will be available to those investors who prefer do it for me investment style. This means that CIMB-Principal will manage the fund allocations depending on the preset investment objective and asset allocation. The other two non-core funds, CIMB-Principal PRS Plus Equity Fund and CIMB-Principal PRS Plus Asia Pacific ex Japan Equity will be available to investors who are comfortable with higher equity exposure and would like to manage their PRS portfolio in a more active manner.

CIMB-Principal PRS Plus Growth Fund is targeting those investors below age of 40 years old or have high risk profile, while for CIMB-Principal PRS Plus Moderate Fund is a balanced fund targeting those investors between the age of 40 - 50 years old or have moderate risk profile. CIMB-Principal PRS Plus Conservative Fund is a fixed income fund with a small portion of equity investment, is meant for those over 50 years old or have low risk profile. CIMB-Principal PRS Plus Equity Fund is a local equity fund while CIMB-Principal PRS Plus Asia Pacific ex Japan Equity fund feeds into existing CIMB-Principal Asia Pacific Dynamic Income fund. There is also another set of PRS Islamic funds available but i will not be covering these Islamic PRS funds in this article.

The summary of CIMB-Principal PRS Plus funds information is available below:

Note: If you need to open the spreadsheet in another tab, click here.

So, what's the difference between CIMB-Principal PRS Plus offerings and HwangIM PRS Solutions? Here's my attempt to summarize the differences:
  1. PRS Funds: CIMB-Principal offers more PRS funds, but all but one fund invest only in local equities. I like HwangIM PRS Solutions funds which i think offers local equities defensiveness with some potential upside due to some small allocation for Asia Pacific ex Japan dividend paying equities.
  2. Investor Class: CIMB-Principal PRS offerings are quite confusing to investors due to its investors classifications (which is depends on CIMB-Principal discretion) . Not to my likings.
  3. Sales charge: Big drawback for CIMB-Principal as it charges 3% sales charge as opposed to 0% by HwangIM PRS Solutions.
  4. Fees: This is the part that CIMB-Principal trump HwangIM PRS Solutions offerings. Annual management fee is generally lower than HwangIM PRS funds. PPA annual fee of RM 8 is absorbed by CIMB-Principal whereas in HwangIM PRS, investors have to fork up the fee individually. However, CIMB-Principal has their own account opening fees which can be waived if you invest at least RM 1000/contribution or setup monthly RSP contribution of at least RM 100.
  5. Fund Provider Performance: While no PRS providers have any performance track record so far, but based on recent years of unit trust funds performance, it seems like HwangIM is a better performer. Of course, past performance is not representative of future performance. Take this with a pinch of salt please.
To know more information about CIMB-Principal PRS Plus offerings, please visit the official site. To understand the difference between PRS and RSP, please visit this link.

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