Wednesday, July 7, 2010

CIMB launches first two foreign ETFs

CIMB will launch first two foreign ETFs on this Friday, July 09:-

(1) CIMB FTSE Xinhua China 25

(2) CIMB FTSE ASEAN 40 Malaysia

The reception has been extremely cold. You won't see any coverage by the major media. I hope that my highlights will bring about some awareness.

Fund facts

I am not going to narrate on the charts as I think my smart readers are very good at it.

(click on the images to enlarge).

I welcome CIMB moves to launch these two foreign ETFs.

This is a good news to small investors who want to buy foreign stocks with limited capital. Participation can be as low as RM 2,000 vs. at least RM 15,000-20,000 per transaction for cross border transaction.

Transaction cost is around 0.84-1.4% round trip for paying brokerage charges. Foreign mutual funds will have an initial charge of 5.5%.

Low management fees. They charge 0.6% annual management fee for FTSE Xinhua 25 but did not mention for ASEAN 40 fund. I do not expect the fund management fees for ASEAN 40 fund more than 1%.

These funds are suitable for both active(trade) or passive(buy and hold) or dollar averaging.

Chances of your fund go to zero value is NIL unlike playing with some speculative penny stocks when they visit PN 17 jail.

The benchmark value will always determine the true value for investors as reference. Unlike some closed end fund, trading for deep discount to NAV is almost impossible or unheard of . This will provide liquidity to exit with little penalty.

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