144 Birth Certificate is Important in An Intestate Estate Claim

Birth Certificate is Important in An Intestate Estate Claim

Previously, I shared about claiming estate for a person who does not leave behind a Will through Amanahraya.

In such a claim, the spouse, the parents and the children become the valid parties to inherit the estate. Therefore, the relationship must be established / proofed. The needed documents for this will be:-

• IC of all beneficiaries
• Marriage Certificate - to prove legal husband / wife
• Birth Certificte of deceased - to prove legal parents
• Birth Certificate of children - to prove legal children
• Death Certificate - in case where any parties is had pass away, death certificate is needed

For older peoples, especially those born before / right after independence, they may not pay high attention to Birth Certificate. They were more concerned with Sijil Kerakyatan, and blue IC. To be able to stay in Malaya with all the legal rights was the main concern. So they may not have / care to keep their Birth Certificate.

143 Dufu — High Accrual Ratios

Dufu — High Accrual Ratios

Dufu (7233) was in my portfolio, until it gave out bonus issue. I bought it because it fit Magic Formula criteria (it still is actually). I sold it because I don't quite like activities that increase shares outstanding that will dilute EPS.

Then, I read a blogger in i3investor commenting about Dufu. One of the point is about booking receivable as profit. I read the article and comments from others, all the points make sense to me. My problem is, in accrual accounting, companies will record a sales even though the payment will only be received in a later date. Anyway, since i have sold the shares, I didn't checked further.

Recently, I re-read the article. Refer back to Dufu Q3 report, both revenue and receivable increased by roughly 30%. It is also true the increased in profit is almost the same as in receivable. In Dufu Q4 report, further see inventories increased by whopping 60%. But both reports are showing positive free cash flow (FCF).

When I check in Morningstar or WSJ, I can't find any ratio that gives out alert signs. Dufu seems very healthy.

To know whether Dufu is still worth investing, I put the Q4 data into my spreadsheet.

142 P2P Financing — First Case of Default

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.

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.

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?