Nov 21st, 2007 by AhYap
ICAP is listed in the KLSE as a company under the Closed End Fund section. All companies listed in the KLSE will belongs to a section, i.e. plantations, hotels, properties, financial, etc.
It used to have only 2 stocks listed under the closed-end fund section – ICAP and AMANMFB. But funny enough, AMANMFB has closed shop a few weeks ago. AMANMFB performance sucks from day 1 and they looked even uglier when ICAP is launched 2 years ago. So instead of keep hiding their head under the table, the fund manager decided to terminate the fund.
Most people are not familiar will a closed end fund because most funds that we buy are open-ended funds. Please read the article “Closed End Fund vs. Unit Trust Fund” to learn more about them in details.
To make a quick explanation, an open-ended fund doesn’t have a fixed amount of units. Today it can have 13 million units and tomorrow it can have 10 million units, depending on how many people have bought or sold the funds. The price that you buy or sell an open-ended fund is based on the NAV of the fund, which is calculated daily by the fund companies and is published daily on the newspaper. [NAV = Net Asset Value = how much the fund is worth = the exact price of the fund]
As opposed to an open-ended fund, a closed-end fund has a fixed amount of units. For example, ICAP has a fixed 140 million units available. Tomorrow, it will still be 140 million units no matter how many people sell or buy it. The bid and ask price do not depend on the NAV but actually depends on supply and demand.
When you buy a Public Mutual fund, you are buying from Public Mutual directly at the NAV + entry fee (6.5%). If you sell, you are selling to Public Mutual directly at the NAV. You don’t need to worry whether there are buyers or sellers available, Public Mutual will always buy or sell to you.
Since ICAP only has a fixed 140 million of units, you can only buy from an existing ICAP holders who wants to sell to you (sorry, AhYap is not selling his to you). And so the price is determined by supply and demand.
The above image shows that there are 152 lots available for sale at RM2.40. If you are already holding ICAP and want to sell them, you can sell 148 lots at RM2.39 right now. A lot means 100 units/shares.
Where do you buy and sell ICAP? You do that exactly the same way you buy or sell other stocks such as GENTING or DIGI. That’s either through a reminsier or do-it-yourself via a discount broker such as HLeBroking.com. You need to pay brokerage fee, stamp duty & clearing fees when you buy or sell ICAP just like your buy or sell other stocks in KLSE.
Since ICAP is also a fund, it also has its own NAV. But instead of being calculated and published daily like other mutual funds. ICAP NAV is calculated on every Wednesday and will be published end of Thursday on icapital.biz and klse.com.my (’Listed Companies’ Menu -> Company Announcement -> Announcements -> Current -> ‘By Company’ Tab -> ‘I’ Button -> ICAPITAL.BIZ BERHAD).
From website iCapital.biz, it will look like this
Latest NAV – RM2.10
(as at 14/11/2007)
From klse.com.my, the announcement will read like this
On behalf of the Board of icapital.biz, we wish to announce that the NAV per share of icapital.biz as at 14 November 2007 was RM2.10.
If you are smart enough, you will notice that ICAP is actually selling at RM2.40 right now while the NAV is only RM2.10! What does that means? Demand is so strong that there are actually idiots trying to buy it at RM2.40 (Yes, I mean Idiots).
Logically, ICAP should be bought or sold around the NAV. So if the NAV is RM2.10, buy and sell should be around that amount. As a buyer, you want to buy it as low as possible. If you are a seller, you want to sell it as high as possible. If the NAV is RM2.10 and you pay RM2.20 to buy it, you are actually paying a premium to buy it. It is OK to pay a premium to buy a good fund. When you buy a mutual fund, you need to pay 6% to 7% entry fee as well which is also a premium. However, paying 19% of premium to buy a fund is ridiculous to me.
The reason why idiots bid it so high right now is due to the lack of understanding to ICAP and the ignorance of a bunch of traders. A lot of trading software (including IntegraStocks promoted heavily by Bursa Pursuit) are giving buy signals to ICAP because it keep on breaking new high. So these traders, who know nothing about ICAP other than its s-p-e-l-l-i-n-g thought that this stock is the next stock that will go up 500% in the next few weeks. They will be proven wrong and burned hard.
ICAP is a registered company but it doesn’t has its own ‘business’. It’s ‘business’, is to own other businesses that is listed in the KLSE (they buy stocks!). ICAP is owning around 15 stocks right now, including PARKSON, PETDAG, UMW, PIE, BSTEAD, etc.
ICAP doesn’t has a single employee! Everything is outsourced. The decisions on what stocks to buy and sell are outsourced to Capital Dynamics Sdn Bhd, which is run and operated by Tan Teng Boo (the fund manager). The annual management fee paid to Capital Dynamics yearly is 1.5% of the NAV. Almost all mutual funds that you buy will will have such management fee paid to the fund manager ranging from 1% to 2%, 1.5% is most commonly used.
Tan Teng Boo publish an investment newletter weekly since 1988. And everyone can subscribe to this newsletter (of course you need to pay lah). The gem of this newsletter is that is contains a paper portfolio where he will tell you exactly what stock to buy and sell. He called this portfolio “Section C”. The performance of this portfolio is amazing, it has averaged a 21.73% compounded return since it is started in 1991! Remember that a 20% compound rate will grow your money 6 times in 10 years. Click here for the complete track record details with yearly breakdown and chart. Since this portfolio is make public to all subscribers since 1991, everything can be traced back to 1991 and thus the track record cannot be faked.
What makes ICAP so interesting when compared to other mutual funds in Malaysia?
The core philosophy of typical mutual funds is diversification. A typical fund will own a lot of stocks, probably hundreds or even thousands of them! What they do is buy a little bit of this and a little bit of that. Their reasoning behind this is that the risk can be reduced by ’spreading’ it over a lot of counters. What they are thinking is, if the fund own 300 stocks and 1 of them go down 100% to 0, the fund overall net loss is only 0.33%. This is known as “Don’t put all your eggs in one basket”.
Unfortunately, sword has a double edge. If your fund buy 300 stocks, 1 of them go up 100%, the effect of the superior performance of this stock only net to 0.33% to the overall fund performance! So there is nothing to be proud of when one of the stock go up 100%!
Warren Buffett, the world’s most successful investor (the #2 richest man in the world) who runs Berkhshire Harthaway that is worth over USD 200 billion ($200,000,000,000) owns only 39 stocks! So for a typical mutual fund that is worth RM100 million to diversify as much as 300 stocks is meaningless.
When mutual funds owns too many stocks, their performance will be much or less same as the overall market! So if you read the headline and the stock market tumbled 3%, most probably your fund will also tumbled 3%. This is because the fund owns so many stocks that it is actually the stock market itself! If KLSE has only 1,500 stocks and your fund owns 500 of them, it is very logical that your fund price will drop when the overall market drop.
Look at Public Growth Fund (red) vs the KLSE Composite Index (blue). Look how close they mimic each other. This is because they own too many stocks. So they will have a high correlation to each other.
As ICAP owns only 15 stocks, its performance will not rely too much on what the overall market is doing. So it has lower correlation when compared to typical mutual funds. This can be seen clearly on the ICAP performance beginning at April 2007. While the market is going flatline, ICAP is able to appreciate continuously.
Performance of a value investor doesn’t depends on the market but the earning performance of the underlying companies. The companies that ICAP owns keep making good earnings on that period and thus the price is reflecting that. Note that I am using the NAV of ICAP and not the stock price of ICAP because NAV is the real value of the fund and not the price (which is insane right now).
* A mutual fund that holds too many stocks will not be able to outperform the market in a large margin for the long run. But an intelligently value investing portfolio that focus only on a few well researched stocks can easily outperform the market by a large margin in the long run. *
Before I continue, I will now write my responds to Boyboycute’s comment. He takes a great effort on researching more about ICAP which I salute (a lot of people either listen and forget, or listen blindly).
Icaptal.biz was listed 2 years ago on 19 Oct 2005. Whatever ICAP is doing, it will be under scrutinized by Bursa starting from that date only. Before the listing, ICAP self-claimed in http://www.icapital.biz/english/trackrec_1.asp about the performance of Capital Dynamics without any supporting documents or evidence. No one can certify the performance of Capital Dynamics before the listing of ICAP. Since ICAP has two years of track record only, I cannot make any good judgement about the fund. By the way, did you read the disclaimer in the website? Past performance is not an indication for future performance. See it here: http://www.icapital.biz/english/disclaimer.asp
As you have read earlier, the track record of the paper portfolio ‘Section C’ is hard to faked because he publish his newsletter weekly and everything can be traced back. Unless he can time travel and know the stock prices today in 1991, he can only make his buy and sell decision based on his investing skill at that moment.
While the paper portfolio is started at 1991. The performance is so good that people want Tan Teng Boo to manage their real money! So Tan got his fund manager license in 1997 and start managing real $$$ begining 1998. At that time, you can ask Tan to manage your money if you have RM500,000. This minimum amount has been increased many time and today if you want him to manage the money for you personally, you will need to have RM4 million (RM4,000,000). Oh…
Tan actually did better with the real portfolio than his paper portfolio. His real portfolio (published in CDAM.biz) indicated that he has been compounding at 27.52% from Apr 1998 to Sep 2007.
The problem is, most people don’t have RM4 million! I am asking people to save RM100,000 in 5 years and most think it is so tough! What about RM4 million? Many people want Tan to manage their money buy they don’t have the money! So Tan come up with the idea of closed-end fund so that each of us can pool the money together so he can manage for all of us (the poor ones) at one time!
The IPO happened 2 years ago and it raised RM140 million, which consist of 140 million shares/units at RM1 each. Tan than use this RM140 million to invest on our behalf and make money for us. This RM140 has now grown to RM294 million (based on NAV of RM2.10).
Boyboycute mention that “No one can certify the performance of Capital Dynamics before the listing of ICAP”. Listing on the KLSE itself is not a simple and easy matter, especially as a closed-end fund, because closed-end fund is a new company without any track record! If it is easy, there should be a lot of closed-end fund in the KLSE! There are thousands of mutual funds available (see the newspaper) but only 1 closed-end fund listed in KLSE. I would like to run my own closed-end fund too if KLSE will approve me! I can show them my blog!
And yet, ICAP is the 2nd company in KLSE that obtains the fastest approval for listing on the main board! The first one is Maxis. This is because the reputation of Tan and his performance is so convincing.
All funds need to have the disclaimer “Past performance is not an indication for future performance” as required by the regulations, including Public Mutual, OSK-UOB, etc. So there is nothing unordinary.
United States is a country that people like to blame and sue each other. I just came home from Los Angeles last week and to my surprise, the amount the disclaimers is insane! Every hotel and building has a disclaimer that says ‘enter at your own risk’ because it might contain chemicals and toxin and such that may cause you cancer or serious brain damage, etc. etc. [I think they are referring to nicotine from cigarettes] and the drugs advertisement on the TV will always end with the ‘eat at your own risk’ disclaimer. Disclaimer, is used to cover one’s ass from legal law suit.
Fund management fee paid to a related party Capital Dynamics Asset Management Sdn. Bhd has doubled from RM638,479 in 2006 to RM1,363,494 in 2007. Can Tan Teng Boo explain this? Is the Board of Directors trying to take money from the shareholders in ICAP through CDAM? From loss after taxation of RM1.217 million in the last financial year, ICAP Fund recorded an after tax profit of RM14.600 million in 31 May 2007. A simple calculation shows that 9.34 % of the net profit goes to the fund management’s pocket. Will the management fees given to CDAM increase in the next financial year? We shall see then.
Wow, big misunderstanding! As mentioned earlier, annual fund management fee for ICAP is 1.5% of the NAV. All mutual funds in Malaysia charge an annual management fee and 1.5% is the most commonly used. The fee is paid quarterly at 0.375% each (1.5% / 4) based on the NAV.
Loss after taxation of RM1.217 million are the cost and expenses for listing ICAP on KLSE. Since the IPO raised RM140 million, that is merely 0.87% of the entire fund! It is very common for a lot of IPOs to spend more than 20% of their raised money in IPO cost! ICAP is one of the listed companies that spend the most little in IPO expenses to keep as much raised money as possible for the shareholders. They didn’t spend money on making big marketing and promotions on their IPO. And yet, the IPO is oversubscribed by 11 times! He already built up a big fan base before the IPO through his newsletter.
Basically, you take out RM100 from your pocket and RM1 will go for the IPO expenses (1%). RM99 will remain as your investment. If you have bought a mutual fund, says Public Growth Fund, your RM100 will be left with RM935 because they are charging you RM65 fee to buy! So who is stealing your money? ICAP or Public Growth Fund?
The after tax profit of RM14.6 million is realized from selling Digi, AsiaTic and Kumpulan Guthrie. The accounting method that we are using today is very weak in measuring the performance of a fund because our accounting method assumes that money is made ONLY after you sell the stock. But ICAP is a value investing fund and they don’t sell that often. It usually buy and hold for year! If say ICAP never sell a single stock in 2007, but the portfolio has appreciate 50%, in accounting, ICAP didn’t make any money! So it makes no sense to value ICAP based on the profit and loss. One needs to look at the NAV, which is exactly what it is worth based on the market price of its holdings. The same way you will look at a mutual fund.
ICAP is taxed at the statutory tax rate of 27%. Compare with other types of funds, ICAP is losing a big chunk to taxes. In 2007, the tax is RM2,153,669, which is about 14.75% of the net profit reported. In long term, ICAP’s performance will be affected by taxation compared with other funds which have tax advantages.
This is true. But since ICAP is a value investing fund for the long term, most stocks will be hold for a long term and there will be not much selling. For over 2 years, ICAP has only sold 3 stocks (probably 4 by now, they should have sold LIONDIV after it spin-off PARKSON by now). No selling = no tax.
Mr. Tan Teng Boo has a total of 525,700 shares in ICAP (indirectly). Assuming he bought it during IPO at RM 1.00, he only has RM 525,700 in ICAP. He cannot even make it to the 30 largest shareholders’ list. Is he poor? Does he feel uneasy putting his whole wealth in ICAP? Will you put your whole wealth in ICAP? Then, why he urged for more loyal and bigger shareholders? Meanwhile, Warren Buffet has almost 99% of their wealth tight down to Berkshire Hathaway. That is what you want from a fund manager. A quick browse on the thirty largest shareholders shows that the total ownership of the thirty largest shareholders does not exceed 30%. The thirty largest shareholders must have attended annual meeting in ICAP. What did they see, hear or feel there? If they are convinced by ICAP, shouldn’t they already increase their holdings after the 1st annual meeting? What does this tell you as a retail investor?
Haha, another big misunderstanding. But that shows you are incredibly smart when you think of this because I think of that too when I started to research ICAP! [This sentence is trying to tell people I am smart too, haha]
As mentioned earlier, before Uncle Tan launched ICAP, he is already running a stock market newsletter business since 1989. And in 1998, he is managing others people money with a minimum investment of RM500,000. He will make 1.5% yearly from the investment amount as management fee. Today, the rules has changed. Not only that you need RM4 million to have him manage your money, he will also take 20% of your profit on top of the 1.5% fee! He has also launched his new global fund that needs a minimum investment of USD200,000. He is making hell a lot of money from these.
The biggest reason why Tan doesn’t own a big chunk of ICAP is because he is not supposed to do so! That’s is not what ICAP designed for. The reason ICAP exist today is to allow small retail investor to be able to invest with Tan! Small investors pool together with a big pile of money and Tan will manage all as one. Instead of managing RM2.59 from Ah Beng and RM340 from Ali Baba. If he comes in and buy a big chunk of it, it will reduce the stock availability to other retail investors. So it doesn’t make sense. ICAP is oversubscribe by 11 times at the IPO!
Furthermore, top 30 investors doesn’t have a large percentage of money in the fund because if they have RM4 million, might as well open a private account with Tan! This way they can have more control on their money (and privacy!). Or they can buy Tan’s new global fund at USD200,000 minimum.
Uncle Tan drives a BMW 7 Series and a Lotus race car! Hopefully he won’t drive his Lotus too much because we need him to run the fund! Uncle Tan, you are already 52 year old and you are not young anymore lor! Racing is not your game anymore. Let me drive your lotus lar, I am only 27. Let me take the risk from you. :p
“In appraising the performance of your Fund, its net asset value (NAV) is the key variable to focus on. The NAV of your Fund rose from RM1.13 per share on 31 May 2006 to RM1.65 per share by 31 May 2007 or an impressive gain of 46%. The KL Composite Index rose 45.1% for the said period”
This performance is during KLSE bullish time. So, ICAP makes money during bullish time. What is so impressive? KLCI rose 45.1% while ICAP 46%. My mutual fund rose about 45.5% too. You called that IMPRESSIVE? I would say it’s normal. ICAP will try to beat the frequently efficient market. Can ICAP do it? I’m not so sure about that. We’ll see after 5 to 10 years.
This is until May 2007, the performance is achieved while still keeping RM60 million in cash! What that means is that the stock picks in ICAP has actually appreciate a lot more than 46%! Cash only appreciate at fixed deposit rate (3%). As value investor, we buy only when we found value and we will always want to keep some cash aside so that we have the money to buy when the chance arrived.
For an all equity mutual fund (means they buy only stocks and not bonds), usually 90% of their money is invested at anytime, leaving less than 10% in cash. If the stock market tumbled tomorrow, they will not have the opportunities to grab a lot of bargains on sale.
Also as mentioned earlier, From April 2007 to November 2007, while the KLSE is going sidelines and can hardly break 1,400, ICAP’s has continue to surge and beat KLSE by a big margin. A lot of other mutual funds are going sideline as well.
And again, be reminded that ICAP is holding only around 15 stocks and it still have a lot of cash to invest (RM43 million as at 31 August 2007)!
And yes, we will see after 5 to 10 years!
ICAP depends solely on Tan Teng Boo.If he involved in an accident and die tomorrow, what will hapen to ICAP. Any successor?
The performance of ICAP in the future depends heavily on Tan Teng Boo as we can say that it’s a really a “One Man Show”, something like RAMBOO. Same as Warren Buffett who runs Berkshire Hathaway. Warren Buffett is 76 years old and people has been worrying about his death for 50 years. And yet he is still eating ice cream and drinking vanilla coke happily everyday without a successor.
There is no qualify successor for Tan Teng Boo and Warren Buffett right now. If they die, you really need to figure out what to do with your money. But you will have plenty of time to decide what you want to do because as a value investor, the most critical part is to BUY a wonderful company at a great discounted price. It is the buying part and not the selling.
If Tan got hit by a truck tomorrow, Petronas Dagangan will continue to serve petrol and the mamak store will continue to cook with Petronas gas, UMW will continue to sell his Toyota Vios to those who don’t want to save RM100,000 to compound, BSTEAD will still be collecting rentals from all the tenants in The Curve and it’s 2 Royale Bintang hotels … All the businesses will continue to run without Tan Teng Boo, when we own ICAP, we are just indirect shareholders of these wonderful companies through ICAP. Warren Buffett has never sell any of his Coca Cola stocks since he bought it in 1988.
Trust me, I am 100% sure of this, I will bet hard with you! Sooner or later, he will have to die! No one leave this world alive. Not even a fly. So what I want to say is that, in value investing, buying the right stock at the right time already completes 90% of the work. And Tan has done the 90% for us. When he die later, we can then figure out what to do by then. That’s why you should subscribe to my blog as I will definitely say something when that happen, given that I don’t die before him lar!
Also on the next annual general meeting, I will suggest Tan to give me his Lotus to avoid him crashing in his own car. I may also suggest the fund to use 1% of the money to buy a life insurance for Tan and assigned it to me. Haha.
Should You Buy ICAP?
Yes and No!
Yes – When the price is right.
No – When the price is wrong.
The price now is definitely wrong. Worst, the price can remain wrong for a long time, given that there are enough fools to buy from other fools. But since this is a long term fund, there will always be a panic time that put the fund on reasonable price and you will always have the chance to buy some.
Here is another way to look at ICAP. If Tan is able keep on his record of 25% compounded return in the coming years, ICAP should perform around this
(Oct 2005) Staring – 1.00
(Oct 2006) 1st year – 1.25
(Oct 2007) 2nd year – 1.56 – we’re here
(Oct 2008) 3rd year – 1.95
(Oct 2009) 4th year – 2.43
Did you see the problem? ICAP has appreciated so much that the compounded return is 45% for 2 years (based on NAV of RM2.10). This kind of performance is too good that it will not last for the long run. In the long run, it will be pull back to around 20% to 30% which is more reasonable and is the track record for most gurus in the world. Best record are Peter Lynch (retired) and Eddie Lampert (still young and working hard). Both done 29% for 18 years.
So what I want to bring out is at one point, it will have to trace back to the reasonable rate of return. That doesn’t mean that ICAP will drop back to 1.56, I would say 99.9% chance it won’t! What will happen might be like the KLSE index right now, it will have time that it might go sideway or just drop a bit. If ICAP just stays the same for 1 more year (NAV 2.10), its averaged compounded return will still be as high as 28%! That means for people who buy at RM1.00 3 years ago, his compounded return is 28%. For those who buy today (say he can buy at NAV 2.10), the return is 0% for 1 year later since it stay the same.
So what I am telling you is that, you ‘might’ be late to the boat.
Investing return is not like a fixed deposit or Amanah Saham which can gives you a consistent rate year to year. Below is the rate of return for Tan’s paper portfolio dated back to 1991 until 2007.
There is actually 5 negative years! This is part of the game. And did you notice that for some years, its return can go over 50% to 77.98% and 125.88% (the big years)! And what we are experiencing right now in 2007, is this kind of great return. In the coming years, ICAP will give a 3.3% return or even a negative return. It’s part of the game.
Even with 5 negative years, this paper portfolio has averaged a compounded return of 21.7%! if you can do 21.7% for 10 years, RM100,000 will become RM712,000! That’s what I have stressed again and again and again and again, investing is something that you will want to do for the long term, not 1 year, 1 months, 1 day or 1 minute! Don’t caught up to become a trader. There is nothing to brag about if you can make 1 big gain in a short time. Able to grow your money consistently over the long run is what matter.
So again, should you buy ICAP? Are you really late to the boat?
Lets’ look at it another way. If you don’t buy ICAP, most probably you will buy another mutual fund. But unless there is another great fund manager coming out from Malaysia (maybe AhYap or Boyboycute or soufulow, haha), chances of another mutual fund outperform ICAP in the long run is very slim.
While ICAP has chalked up an explosive gains last year (one of the big years), so as other mutual funds! If ICAP is having an unsustainable growth right now, so as other mutual funds!
Public Mutual makes a lot of advertisement in the newspaper a few months ago telling people they are the best mutual funds because they make 100% return for the last 5 years. 100% return for 5 years means 15% compounded return. But what they didn’t tell you is that almost 50% of the return came from 1 single year alone and that’s the most recent year! If you have sold 1 year ago, your return for the first 4 years is only a pity 50% (for 4 long years!) which is equivalent to only 7.5% compounded, far from the 15% compounded if you just miss 1 year!
Since I am very comfortable with ICAP, the philosophy of value investing, Tan Teng Boo, his Lotus if he gives it to me, and the stocks currently owned by ICAP, I would prefer to own ICAP instead of other mutual funds. If you buy a mutual fund, we usually don’t know much about the fund manager. Most probably we will know the fund salesman and the name of the fund only. And the fund manager that operate your fund this year might run away to another fund company and another Ah Beng will come and take over! And you also don’t know the portfolio of your mutual fund (do you know all the stocks your fund owns right now?) Does your fund organize an annual general meeting to let you meet with the fund manager and discuss about the future of your fund?
I would say the strategy is, if you are going to buy a fund anyway, why not buy ICAP and pay not more than 6.5% above the NAV? Since everytime you buy a mutual fund, you will have to pay 6.5% entry fee. For example, ICAP NAV is now RM2.10, you can buy it at RM2.23 (2.10 x 1.065), and then just hold it for the long term (5+ years) to see the results. It will easily outperform all other funds. Or you may even pay 10% premium if you think it is logical to you, but definitely not more than 10%, and not right now (19%)!
Writing this section on “buy or don’t buy” is very hard for me. As I always feel like someone who buy now might be late to the boat, you have miss the 1 big year. But the problem is, there might be a few great years coming on and this is only the beginning! When I bought earlier this year at RM1.55 and if I think I am late to the boat, I would have miss out a lot!
And if one evaluate the overall stock market as a whole (including global markets except China), everything is still selling very cheap in comparison to the companies earnings (the overall PE). All the stocks that ICAP owns right now look so cheap as well, there are stocks that is selling at PE10 but has the potential to grow over 20% per year!
So the only conclusion I can make is that if you have to buy a fund anyway (including the ridiculous Amanah Saham Wawasan 2020) buying ICAP at not more than 6.5% of the NAV (even up to 10%) is always better than buying any other mutual funds. A typical mutual funds that hold too many stocks will not be able to perform so well as compared to a focus portfolio. Thus a fund that invest only in KLSE will have merely no chance on beating ICAP in the long run. And any all-bonds fund or funds partial-bonds (know as balanced fund) will definitely not be able to perform better than ICAP in anywhere! So as all capital guaranteed fund and structured deposit. Only global funds that invest fully on equity (stocks) may have a chance. Other funds are just in underweight league.
But don’t be despair on this. Because I have a better solutions for those who are keen on saving RM100,000 for the next 5 years and see their money grow 36 times in 20 years, making themselves RM3.6 million! If you don’t know what I am talking about the RM100,000 and the RM3.6 million, you haven’t read AhYap’s New Economic Policy! Read it now.
Update! This article is written in 2007, you must read the update on Tan Teng Boo and his new i Capital International Value Fund.