AMB Value Trust Fund (AMBVTF) - 2013 Income Distribution

Despite Bursa FBM KLCI against which AMBVTF is benchmarked,  having an uptrend this year, the 2013 gross income distribution declared on 06 September 2013 did not assume the same direction. Last year's distribution at 10 sen per unit was the last of a string of stellar performance since 2009 for the fund.

 All the same, the seven (7) sen per unit declared gross income distribution is translated into about 11% total return based on the calculation of capital return and income return. This is less than last financial year (2011/2012) as there was a decrease of about 8% in NAV recorded over the 2012/2013 financial year. Will have to wait for the report to see the actual total return.

The third week of July 2013 saw the NAV registering a high of 0.5699 and it gradually went down along with the  market's downward movement and just before the declaration of dividend,  it was at 0.5444 on 30 August. As expected after the dividend payment, the NAV decreased to 0.4709 on 02 September. And that was time to accumulate more units be it at 6.5% sales charge or if you acquired it online from FundSupermart, the sales charge is lower at 2%. My calculation shows that if I purchased 50k units at 0.4709 at sales charge of 6.5%, it is cheaper than if I were to purchase the same number of units at a higher NAV, say 0.5000 even at a discount rate of 3% sales charge.

As my initial fund is purchased from Maybank, I have decided to stick with it mainly owing to familiarity with the banker who goes out of her way to remind me regularly when the best time to purchase the units. The personal touch is important.

As stated in the prospectus the main focus of this fund is for capital growth as opposed to income distribution and the medium term period suggested is three to five years. The reason I like about this fund is the compulsory reinvestment of units generated by annual dividends. This suits me fine as I have set my target period of investment.

From May to November 2012, I had made four purchases at 3% sales charge. My first gross income distribution, duly reinvested, was at 10 sen per unit in September 2012. And as at end of financial year on 31 August 2013, with the second reinvested income distribution of seven sen minus fixed charges, my capital appreciation is approximately 15%. It is clear that  investing in this fund has given me  double the returns of all the other individual ASNB funds over a 15 -month period.

The return has motivated me to remain with the fund for the longer term despite the following examples of specific risks faced by AMBVTF (or any other mutual fund for that matter) :

• Market - volatility
• Individual Stock - fluctuation
• Credit/Default - on fixed income securities
• Interest Rate - up and down
• Currency - changing in value
• Country - socio-political turmoil
• Manager - non-compliance/fraud

Suffice to say the Fund has in place mitigation measures to reduce those risks.

True indeed!

But, really if you are worried about the risks, you should put your money regularly in the bank at 2-3% interest per annum with PIDM protection ( make sure you know the set maximum savings though). You may sleep better but you will have to work harder to create wealth and take longer to achieve your financial freedom.

Happy investing!