Value funds based in Singapore?

[opmi]

I want to set up a fund to help others invest their money. Before I can do that, i will need to set up some sort of track record.

Someone once told me that your CDP record is the track record. So, take pride and care for every single trade you made.

I also had this idea of setting up a fund but I killed it.
- marketing - capital won't flow in automatically, you will need to look for it.
- legal and compliance issues, e.g. you can't take money unless the investor is accredited (but there are more these days).
- responsibility - your clients' loss (realized or unrealized) is equally, if not more, painful to you.
- ethics - you will feel guilty to laze around.

Until the CDP track record can stand on its own, and above the other "helps" available, it's better to just help yourself.

Just my own experience...

My CDP statement is loaded with odd lots...hahahaha. My friends
was laughing at me for having a STI ETF replicated in odd lots....hahaha.

My track record in my CPF. Going negative soon on 'Amount used for Investments' balance. My friend already did that.

[yeokiwi]

For non-professionals, good record-keeping is mainly for bragging rights. CDP plus bank statements is usually a sufficient indicator of liquid assets.

I don't quite agree with that...

IMO, good record keeping is necessary even for non-professionals. I record every single transactions & dividend payout, both the dates & exact dollar value. I renew my spreadsheet every year to remove clutter.

For me, it helps to know not just my portfolio but also the individual stocks performance (P/L & Yield) and to make buy/sell/hold decisions.

For things that I am not that mightily interested, I naturally opt for being almost right than precisely right since it takes so much less time to do it.
It's kind of difficult, for example, to show anyone that every details of my investment record, but I can naturally easily quote a rough figure of return for the last ten years.
Or the entry price of the stocks since they just lodged inside my brains.

But, after going through my gmail, I realise that I could actually reconstruct my returns from all the electronics buy/sell statements that I have stored in the account since July 05.
But, that will mean that I have to process > 1000 mails and traced back all dividend payments, right issue, bonus issue, warrant issue, share splits, delisting offers, capital reduction....

Quite a monstrous activity. I gave up.

Luckily, having bad accounting does not affect the ability of stock selection and getting some doses of good luck.

[yeokiwi]

If you really want to help others + you are trustworthy + have gone thro' a couple of bust cycles and still have a positive enough XIRR, how about helping your immediate family members? Just an informal fund based on trust.. not sure if it's illegal...

Another way to do it is through an fixed term(5 years?) IOU with a defined interest rate per year if your relatives or family members have great trust in you.
Since the interest rate is pretty low, a fixed 3% interest rate should attract fund and typically, it is not difficult to get 3% annual return for good investors.
And if your motive is to help your family members, a performance bonus can be dished out in good years for them. In bad years, they just have to bear with the 3% return which is not too bad in current low interest rate environment.

I did that before for a relative but no IOU was issued though.

[d.o.g.]

Since the interest rate is pretty low, a fixed 3% interest rate should attract fund and typically, it is not difficult to get 3% annual return for good investors.
...
I did that before for a relative but no IOU was issued though.

Once you enter into a contract (whether verbal or written) to manage money for others (whether friends, relatives or strangers), you enter into the realm of fund management. If MAS comes knocking for whatever reason and there is evidence that you are managing money without a license/registration, you may face legal action.

And remember that people seldom complain when things are going well. In the capital markets, nothing is for certain and if you have a run of bad luck you could end up severely out of pocket. It may only be annoying if the amount is small compared to your net worth, but if the amount is too large to pay back you could be in big trouble if the relative complains to MAS. Even if the relative does not complain formally, you may find yourself ostracized at family gatherings until such time that you can make good all the losses.

I am not trying to scare anyone, but the law is what it is. Very inconvenient for those trying to raise money and build a track record, and for those simply trying to help people they care about.

The US actually makes exemptions for immediate family and employees to invest in a manager's fund, but in Singapore no such exemptions exist. The "individual managing for immediate family members" exception was removed when the laws were changed and fund management was restricted to companies only. The "employee investment" exception was requested by industry participants, but denied by MAS.

[intellect]

However, even ASSUMING it is legal to manage money for your family and not collect fees, I would counsel that blood is thicker than water and when (not if) you lose money (however temporarily) it will affect your family relationships.

I have an experience once during the period where china-linked companies were hot stuffs.

My old relative has requested me to help her to buy china-linked company stock as she did not has a stock-broking account and she don't really understand the procedures.

I warned her about the risk but she insisted as the return is good. So I helped her to buy the stock, thinking that it should be quite safe since Temasek is one of the shareholder.

Initially, she is very happy as the stock rocketed. But when the stock tanked, she complained that I lost her $$$ (even though it is her idea to buy). Eventually, I make good for the losses.

What D.O.G. said is right, after the incident, I refused to 'help' anyone on stock investment especially relatives who don't understand the concept of investment.

Morale of the story: It is prudent to draw a clear line when come to $$$

[KopiKat]

What an irony it would be if MAS, for whatever reasons, decide to charge someone, who, in the extreme case, is actually making money (plus not charging a single cent) for their close blood relative eg. old parents, who're illiterate (not just financially) while helping them to invest and on the other hand, decide to stay toothless while many loses hundreds of millions to scams in alternative investments...

[AlphaQuant]

Morale of the story: It is prudent to draw a clear line when come to $$$

i learnt the hard way the saying: "lend money to a friend - either you lose the friend or you lose the money"

same goes for managing $ for relatives/friends.

[yeokiwi]

I warned her about the risk but she insisted as the return is good. So I helped her to buy the stock, thinking that it should be quite safe since Temasek is one of the shareholder.

Initially, she is very happy as the stock rocketed. But when the stock tanked, she complained that I lost her $$$ (even though it is her idea to buy). Eventually, I make good for the losses.

What D.O.G. said is right, after the incident, I refused to 'help' anyone on stock investment especially relatives who don't understand the concept of investment.

Morale of the story: It is prudent to draw a clear line when come to $$$

The practice is prevalent - Family member invests on behalf of family members. In most cases, the disadvantaged party is always the "client" rather than the "fund manager" since the "fund manager" is holding the money and may refuse to return the money to the "client". Besides that, disputes always arise when the return does not meet the expectation or in many cases, the loss of capital.

An IOU with interest is basically a compromise when an investment need has arisen for whatever reason. The lender should not expect anything more than the interest and the borrower has no requirement to reveal nor report to the lender what he/she was going to with the sum of money.

In the case that the borrower refused to return the money, the lender has a IOU to sue the borrower for money. Not that it is a great way but the piece of IOU is at least legal binding.

In my case, the sum had already been redeemed long ago and since then, I am not "borrowing" nor "managing" anybody's money.
is it worth effort?? not really, the amount involved is small and would not have make much of a difference to me.

Anyway, I have always keep a low profile in investment discussions among relatives and friends and so, i seldom or rarely receive this kind of request. Great cos.. 谈钱伤感情 (money disputes hurt relationships.)

[Stocker]

Morale of the story: It is prudent to draw a clear line when come to $$$

i learnt the hard way the saying: "lend money to a friend - either you lose the friend or you lose the money"

same goes for managing $ for relatives/friends.

Fully agreed with you. I learned and learned and learned.
We were worried if we don't lend we will lose a friend, after lending we lose both money and friend.

[opmi]

Morale of the story: It is prudent to draw a clear line when come to $$$

i learnt the hard way the saying: "lend money to a friend - either you lose the friend or you lose the money"

same goes for managing $ for relatives/friends.

Fully agreed with you. I learned and learned and learned.
We were worried if we don't lend we will lose a friend, after lending we lose both money and friend.

Managing investments for others is a thankless job. If not for the leverage that comes from OPM, nobody would be interested.

If u take money from anyone, you are their 'bitch'