Unit Trust Funds DO provide better returns than ASB in the long run

You might wonder how unit trust investments would fare against Amanah Saham Bumiputera (ASB). It's really hard to say because the unit trust market is very unpredictable as opposed to ASB which gives out dividend at a consistent 7-10% every year. But, maybe I can use Public Ittikal’s actual performance as an example. However, please note, as usual, PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Public Ittikal is the oldest Public Mutual Islamic Fund, launched in 1997. As a result of that, it has gone through all the ups and downs of the unit trust market for the past 10 years. This include the 1998 economic crisis (‘gawat’ period), the 2001 dotcom bubble burst and 2003’s SARS when the returns sometimes even went into the negatives. However, you will see that even after taking all of those years into account, the returns from Public Ittikal after ten years are still higher than ASB. Let’s take an example of a lump sum investment of RM50,000 on the first year of investment (1997) in both ASB and Public Ittikal.

The table below shows the actual yearly returns of Public Ittikal in percentage for the past ten years, and the accumulated returns in RM for an initial lump sum investment of RM50,000.

Year	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006
Annual Return (%)	-10.53	22.27	29.99	-18.42	18.84	1.23	28.95	7.24	12.91	46.13
Accumulated Return (RM)	44735.00	54697.48	71101.26	58004.41	68932.44	69780.31	89981.71	96496.38	108954.06	159214.58

The table below shows the actual yearly returns of ASB (including bonus) in percentage for the past ten years, and the accumulated returns in RM for an initial lump sum investment of RM50,000.

Year	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006
Annual Return (%)	11.5	10.5	12	11.75	10	9	9.25	9.25	9	8.55
Accumulated Return (RM)	55750.00	61603.75	68996.20	77103.25	84813.58	92446.80	100998.13	110340.46	120271.10	130554.28

As you can see, the difference is almost by RM30,000. And that is if we just leave the money in the Public Ittikal fund and not do anything about it when there is a market crash. If there is a market crash and we protect our investment by following the methods I mentioned in here, we might do even better

So, it’s clear that saving in a Unit Trust Fund DO provide better returns than the other high performing investment vehicle out there