P2P Financing — First Case of Default
In my previous blog post, I mentioned I had my experience of deliquency in P2P financing, in one of the sub-investment in B2B Finpal. Well, the company had paid back the money, and the whole loan was completed.
As I said, I tightened the criteria by restricting the investments to high grade borrower as well as limiting the loan tenure to 3 months maximum. I had been monitoring closely on the status of these investments.
I guess the business environment must be quite tough out there. Funding Societies reported one of my loan investment had been categorized as Default because the borrower has been unable to repay the late interest charge carried from Nov 2018 & Jan 2019. Funding Societies is doing the necessary to deal with company.
The problematic loan was one of my earliest sub-investment. It had a loan tenure of 12 months. It is in the 6th payments. Meaning another 6 payments to go. Funding Societies reported amount in default is RM58. With my investment of RM1,000, this mean 5.8% gone if, in the worst case, it is going to be totally unrecoverable. Certainly I hope it won't. Anyhow, even if it does, it only means my total return is drag down by one investment. Right at the moment, Funding Societies reported my returns is 9.2% per annum. I started since July 2018, so it is only 7 months old.
As I read in Funding Societies' FAQ, default will somehow happen. Investors can reduce the risk by limiting the investment amount into each sub-investment, and spreading into more sub-investments. I further tightened the grade and tenure.
So far, I am quite satisfied with the return and how the funding companies had been communicating with investors. The auto-investment feature also relieved me from manual decision making.
If you too want to diversify some money into P2P Financing, you may consider them. All the two companies provide referral scheme. And mine are:-
Funding Societies:- http://promo.fundingsocieties.com.my/referral-program/?r=jjqsmwav
Funding Societies rewards the introducer and new investors with RM50 when new investor sign up and invest a minimum of RM1,000. So it benefits both of us.
B2B Finpal :- Put IN001029-Teo Soon Ann in the last column Referral Code when doing registration at https://prod.b2bfinpal.com/investor/registration.
Thursday, February 21, 2019
Monday, January 7, 2019
141 B2B Financing — First Case of Delinquency
B2B Financing — First Case of Delinquency
As mentioned before, I put a little bit of money in two B2B financing companies — Funding Societies and B2B Finpal. About four months has passed.
Recently when I opened my accounts to check, I found one of the investment in b2B Finpal showed "Delinquent". As I googled the meaning, "delinquent" means "being overdue in payment". So, I had came across my first case of "non payment".
I remembered a famous blogger's posting about a default in one of his crowdfunding investment. The crowdfunding company take efforts to identify the problem and keep in contact with borrower to arrange for payment. In my case, I am sure B2B Finpal will do the necessary to discuss with borrower to repay the money.
The table of my investments showed the borrower is expected to repay by 11/1/2019. But on 3/1/2019, I received email from B2B Finpal saying the problematic investment had been repaid. And I checked in B2B Finpal investor's website, yup it had been paid.
Following that, I reviewed my investment criteria. I decided to tightened the investment quality. Initially, I set for Grade A, B and C with different exposure percentage. As I see the interest rate difference between Grade B and C is about 2%–3%, I decided to tightened to invest in Grade A and B only. Temporary, I will leave out Grade C investment.
If you too want to diversify some money into B2B Financing, you may consider them. All the two companies provide referral scheme. And mine are
Funding Societies:- http://promo.fundingsocieties.com.my/referral-program/?r=jjqsmwav
Funding Societies rewards the introducer and investors with RM50 when investor sign up and invest a minimum of RM1,000. So it benefits both of us.
Fundaztic:- https://p2p.fundaztic.com:443/generalize/regist?member=e1hvJ8%2Fctu1o9eb9s9%2FZXA%3D%3D,
B2B Finpal :- Put IN001029-Teo Soon Ann in the last column Referral Code when doing registration at https://prod.b2bfinpal.com/investor/registration.
As mentioned before, I put a little bit of money in two B2B financing companies — Funding Societies and B2B Finpal. About four months has passed.
Recently when I opened my accounts to check, I found one of the investment in b2B Finpal showed "Delinquent". As I googled the meaning, "delinquent" means "being overdue in payment". So, I had came across my first case of "non payment".
I remembered a famous blogger's posting about a default in one of his crowdfunding investment. The crowdfunding company take efforts to identify the problem and keep in contact with borrower to arrange for payment. In my case, I am sure B2B Finpal will do the necessary to discuss with borrower to repay the money.
The table of my investments showed the borrower is expected to repay by 11/1/2019. But on 3/1/2019, I received email from B2B Finpal saying the problematic investment had been repaid. And I checked in B2B Finpal investor's website, yup it had been paid.
Following that, I reviewed my investment criteria. I decided to tightened the investment quality. Initially, I set for Grade A, B and C with different exposure percentage. As I see the interest rate difference between Grade B and C is about 2%–3%, I decided to tightened to invest in Grade A and B only. Temporary, I will leave out Grade C investment.
If you too want to diversify some money into B2B Financing, you may consider them. All the two companies provide referral scheme. And mine are
Funding Societies:- http://promo.fundingsocieties.com.my/referral-program/?r=jjqsmwav
Funding Societies rewards the introducer and investors with RM50 when investor sign up and invest a minimum of RM1,000. So it benefits both of us.
Fundaztic:- https://p2p.fundaztic.com:443/generalize/regist?member=e1hvJ8%2Fctu1o9eb9s9%2FZXA%3D%3D,
B2B Finpal :- Put IN001029-Teo Soon Ann in the last column Referral Code when doing registration at https://prod.b2bfinpal.com/investor/registration.
Monday, October 29, 2018
140 Comparing the performance of unit trust funds and investment-linked funds
Comparing the performance of unit trust funds and investment-linked funds
Unit trust (UT) funds and investment-linked (IL) funds are two type of funds that are similar to each other. Unit trust funds are managed by, well, unit trust companies. Investment-linked funds are managed by insurance companies. Of course, there are some structure difference between them but we won't go into them in this article.
We often see clients like to compare UT funds and IL funds. Their common observation was IL fund price kept on climbing while UT fund price seems like not moving or even falling. We always like to explain UT fund prices will be adjusted accordingly when they declare a distribution (or dividend in layman understanding). And to make up for the distribution paid, total units will be added. So although the price "falls", the units actually "increased".
However, the anchoring bias is so strong that what clients remember is only the price. And they are so sensitive to the movement of price and not the the whole value of investment. Indeed, without a proper comparing tools, it is very hard to judged which type of funds is better.
In a recent training, I learnt a tool to compare both type of funds. And it is Lipper Leaders. So, let's do some comparison and see how it goes.
Let's head to http://www.lipperleaders.com/index.aspx.
Let's try and screen using Malaysia Equity. Below "1. I’d like to search for Lipper rated funds:" let's select "Malaysia" under "Universe:", "Equity" under "Asset Type", "Equity Malaysia" under "Classification".
Under "2. Select a time period:", let's select "10 Year". Then click "Display Funds".
OK, we do see some names of insurance companies. Let's try to sort them by their 10 performance. Let's click on "10 Year Return" twice to sort them descendingly. The first two pages are filled with funds that has no 10 year performance, so let's click 'Next" until page with 10 year data.
What we observed from here is that the top ten spots are taken by UT funds that returned 177%-329% for their investors. Manulife takes the 11th spot with 176%. This shows in terms of performance wise, UT funds are ahead of IL funds.
Now, let's be a bit more stringent and try to screen for the best-of-the-best funds. What do we mean by that. You notice there are some number under the columns of "Total Return", "Consistent Return", and "Preservation". The numbers shows their rating, with 5 being the highest and 1 the lowest.
To do a fresh screening, we have to go back to http://www.lipperleaders.com/index.aspx.
Below "1. I’d like to search for Lipper rated funds:" let's select "Malaysia" under "Universe:", "Equity" under "Asset Type", "Equity Malaysia" under "Classification".
Under "2. Select a time period:", let's select "10 Year". Then click "Display Funds".
Below "3. Choose Lipper Leaders that match your goals:", we will select "5 - Lipper Leader" for "Total Return", "Consistent Return", and "Preservation".
Then we click "Display Funds". Only 6 funds make the list, and all of them are UT funds.
Well, maybe the screen was too stringent. Let's try to loosen one of the criteria. We choose "4 or better" for "Preservation".
This is what we see. 11 make the list, with top 8 spots taken by UT funds (177%-329%). The subsequent 2 spots are taken by IL funds (153%-176%).
This goes to see UT funds are better in terms of performance, and the outperformance can be as much as 87%.
So, why not start comparing your investment-linked funds if you do have one. Maybe you will want to go for the best funds. Well, if you can afford to send your kids to the best school, will you settle for something lesser?
Unit trust (UT) funds and investment-linked (IL) funds are two type of funds that are similar to each other. Unit trust funds are managed by, well, unit trust companies. Investment-linked funds are managed by insurance companies. Of course, there are some structure difference between them but we won't go into them in this article.
We often see clients like to compare UT funds and IL funds. Their common observation was IL fund price kept on climbing while UT fund price seems like not moving or even falling. We always like to explain UT fund prices will be adjusted accordingly when they declare a distribution (or dividend in layman understanding). And to make up for the distribution paid, total units will be added. So although the price "falls", the units actually "increased".
However, the anchoring bias is so strong that what clients remember is only the price. And they are so sensitive to the movement of price and not the the whole value of investment. Indeed, without a proper comparing tools, it is very hard to judged which type of funds is better.
In a recent training, I learnt a tool to compare both type of funds. And it is Lipper Leaders. So, let's do some comparison and see how it goes.
Let's head to http://www.lipperleaders.com/index.aspx.
Let's try and screen using Malaysia Equity. Below "1. I’d like to search for Lipper rated funds:" let's select "Malaysia" under "Universe:", "Equity" under "Asset Type", "Equity Malaysia" under "Classification".
Under "2. Select a time period:", let's select "10 Year". Then click "Display Funds".
OK, we do see some names of insurance companies. Let's try to sort them by their 10 performance. Let's click on "10 Year Return" twice to sort them descendingly. The first two pages are filled with funds that has no 10 year performance, so let's click 'Next" until page with 10 year data.
What we observed from here is that the top ten spots are taken by UT funds that returned 177%-329% for their investors. Manulife takes the 11th spot with 176%. This shows in terms of performance wise, UT funds are ahead of IL funds.
Now, let's be a bit more stringent and try to screen for the best-of-the-best funds. What do we mean by that. You notice there are some number under the columns of "Total Return", "Consistent Return", and "Preservation". The numbers shows their rating, with 5 being the highest and 1 the lowest.
To do a fresh screening, we have to go back to http://www.lipperleaders.com/index.aspx.
Below "1. I’d like to search for Lipper rated funds:" let's select "Malaysia" under "Universe:", "Equity" under "Asset Type", "Equity Malaysia" under "Classification".
Under "2. Select a time period:", let's select "10 Year". Then click "Display Funds".
Below "3. Choose Lipper Leaders that match your goals:", we will select "5 - Lipper Leader" for "Total Return", "Consistent Return", and "Preservation".
Then we click "Display Funds". Only 6 funds make the list, and all of them are UT funds.
Well, maybe the screen was too stringent. Let's try to loosen one of the criteria. We choose "4 or better" for "Preservation".
This is what we see. 11 make the list, with top 8 spots taken by UT funds (177%-329%). The subsequent 2 spots are taken by IL funds (153%-176%).
This goes to see UT funds are better in terms of performance, and the outperformance can be as much as 87%.
So, why not start comparing your investment-linked funds if you do have one. Maybe you will want to go for the best funds. Well, if you can afford to send your kids to the best school, will you settle for something lesser?
Thursday, September 20, 2018
139 Claiming estate through Amanah Raya Bhd
Claiming estate through Amanah Raya Bhd
In Malaysia, once a person passed away, his/her assets will be frozen and can only be distributed according to his nomination (for insurance policies, KWSP and PRS), his will or Distribution Act.
For a person who does not leave behind a will, i.e. intestate, Distribution Act will decide who are entitled and their portion size. Refer to below table for details.
To claim estate under Distribution Act, the family needs to apply for Letter of Administration (LA). To get LA, the family need to go through the below processes. The biggest problem in this process is the 2 sureties that has to guarantee gross estate value for Administration Bond. Meaning should the Administrator run away with deceased's assets, sureties has to come out with their own to pay the family. Basically, nobody wants to be a guarantor.
Another alternative that are more commonly used by general public is to seek Amanah Raya or Harta Pusaka Kecil (under Pajabat Tanah dan Galian). Harta Pusaka Kecil only deals with estate that has at least some immovable properties (house, car, land etc). Amanah Raya can deal with estate with immovable and/or movable properties.
Amanah Raya is a public trustee, thereby requirement of 2 sureties is not needed. Amanah Raya will require some documents and fees when public seeks their service.
Documents needed
The following documents are needed for processing:-
1. Deceased's death cert (original and photocopy)
2. Deceased's birth cert
3. NRIC of deceased's parents, spouse and children
4. Copy of birth cert of deceased's children
5. Copy of death cert deceased's parents (if demised)
6. Copy of marriage cert
7. Photocopy of movable / immovable assets
8. Amanah Raya's forms
Therefore, it is very important to ensure all family member's birth cert, marriage cert and NRIC are readily retrievable. You never know when you will need any of them. Relationship between family members can only be proven with birth cert and marriage cert. So don't lose them.
Make extra copy so that in case of loss, you can still bring the photocopy to JPN to request for replacement. This is especially important for parents or grandparents that are born around independence time. JPN may need to manually search for cc copy in their offices. So, a photocopy will assist their job a great deal.
Fees
1. Deposit of between RM150-RM1000 depending on the type of assets
2. Administraton fee of between 1%-5% depending on type and size of assets
Time
Waiting of 4-12 months depending on the size and type of assets.
Observation
Although Distribution Act provide a structure of dividing assets, it is still best to make a proper will according to your needs. With a will, you decide who gets what and their portion. Example, you may want to allocate more for child / parents that need extra care.
Parents with young children also can decide the guardian and the age the are entitled to inherit the assets. A child age 18 who inherit big assets may suddenly be surrounded with many investment advice (or worse, spending advice).
I still remember a friend's wife who lamented it is very tiring and time-consuming to go to various banks and government offices to make enquiries and submissions. On top of that, she has to take care of her two children. So during will-writing time, I always ask my clients whether they want their spouse to go through the same ordeal.
There are many areas that needs to be considered to ensure the future events are not burdening the family members. Always seek professional help to plan your assets distribution.
In Malaysia, once a person passed away, his/her assets will be frozen and can only be distributed according to his nomination (for insurance policies, KWSP and PRS), his will or Distribution Act.
For a person who does not leave behind a will, i.e. intestate, Distribution Act will decide who are entitled and their portion size. Refer to below table for details.
To claim estate under Distribution Act, the family needs to apply for Letter of Administration (LA). To get LA, the family need to go through the below processes. The biggest problem in this process is the 2 sureties that has to guarantee gross estate value for Administration Bond. Meaning should the Administrator run away with deceased's assets, sureties has to come out with their own to pay the family. Basically, nobody wants to be a guarantor.
Another alternative that are more commonly used by general public is to seek Amanah Raya or Harta Pusaka Kecil (under Pajabat Tanah dan Galian). Harta Pusaka Kecil only deals with estate that has at least some immovable properties (house, car, land etc). Amanah Raya can deal with estate with immovable and/or movable properties.
Amanah Raya is a public trustee, thereby requirement of 2 sureties is not needed. Amanah Raya will require some documents and fees when public seeks their service.
Documents needed
The following documents are needed for processing:-
1. Deceased's death cert (original and photocopy)
2. Deceased's birth cert
3. NRIC of deceased's parents, spouse and children
4. Copy of birth cert of deceased's children
5. Copy of death cert deceased's parents (if demised)
6. Copy of marriage cert
7. Photocopy of movable / immovable assets
8. Amanah Raya's forms
Therefore, it is very important to ensure all family member's birth cert, marriage cert and NRIC are readily retrievable. You never know when you will need any of them. Relationship between family members can only be proven with birth cert and marriage cert. So don't lose them.
Make extra copy so that in case of loss, you can still bring the photocopy to JPN to request for replacement. This is especially important for parents or grandparents that are born around independence time. JPN may need to manually search for cc copy in their offices. So, a photocopy will assist their job a great deal.
Fees
1. Deposit of between RM150-RM1000 depending on the type of assets
2. Administraton fee of between 1%-5% depending on type and size of assets
Time
Waiting of 4-12 months depending on the size and type of assets.
Observation
Although Distribution Act provide a structure of dividing assets, it is still best to make a proper will according to your needs. With a will, you decide who gets what and their portion. Example, you may want to allocate more for child / parents that need extra care.
Parents with young children also can decide the guardian and the age the are entitled to inherit the assets. A child age 18 who inherit big assets may suddenly be surrounded with many investment advice (or worse, spending advice).
I still remember a friend's wife who lamented it is very tiring and time-consuming to go to various banks and government offices to make enquiries and submissions. On top of that, she has to take care of her two children. So during will-writing time, I always ask my clients whether they want their spouse to go through the same ordeal.
There are many areas that needs to be considered to ensure the future events are not burdening the family members. Always seek professional help to plan your assets distribution.
138 Funding Societies — Fully invested and rewarded with bonus
Funding Societies — Fully invested and rewarded with bonus
In my article Funding Societies—my first investment in P2P financing company, I mentioned that I and my referrer will receive RM50 bonus reward once RM1000 of my investment is disbursed for lending.
Well, all my RM1000 has been disbursed and I was rewarded with the RM50 bonus. Meaning the person who refer me is also rewarded as well.
Funding Societies is the only one that reward both parties.
Referral Scheme
I joined three P2P companies and they all provide referral scheme. Mine are
Funding Societies:- http://promo.fundingsocieties.com.my/referral-program/?r=jjqsmwav
Fundaztic:- https://p2p.fundaztic.com:443/generalize/regist?member=e1hvJ8%2Fctu1o9eb9s9%2FZXA%3D%3D,
B2B Finpal :- Put IN001029-Teo Soon Ann in the last column Referral Codewhen doing registration at https://prod.b2bfinpal.com/investor/registration.
In my article Funding Societies—my first investment in P2P financing company, I mentioned that I and my referrer will receive RM50 bonus reward once RM1000 of my investment is disbursed for lending.
Well, all my RM1000 has been disbursed and I was rewarded with the RM50 bonus. Meaning the person who refer me is also rewarded as well.
Funding Societies is the only one that reward both parties.
Referral Scheme
I joined three P2P companies and they all provide referral scheme. Mine are
Funding Societies:- http://promo.fundingsocieties.com.my/referral-program/?r=jjqsmwav
Fundaztic:- https://p2p.fundaztic.com:443/generalize/regist?member=e1hvJ8%2Fctu1o9eb9s9%2FZXA%3D%3D,
B2B Finpal :- Put IN001029-Teo Soon Ann in the last column Referral Codewhen doing registration at https://prod.b2bfinpal.com/investor/registration.
Subscribe to:
Posts (Atom)