Get some good advice and educate yourself. Charges are one thing but will be massively overshadowed by wrong choices.
I've been holding Allianz Income and Growth for a number of years, both the HKD version that pays HKD dividend, and the AUD version that pays AUD dividend. It has done OK, paying out consistently 10% dividend in monthly instalments. Over the last 12 months, with a bit of a crash in second half of last year has reduced the NAV of the fund, but a total return around 6.5% so it's OK.
I hold them with Standard Chartered rather than through some internet mob, not so much for safety and security, not so much because they give me 700 Asia miles a month just for holding them, not so much because I've negotiated 1% front load fee, but mainly because this is what enables my multicurrency overdraft (wealth pro) facility. As well as Allianz, I have a couple of bond and property funds, and basically by holding these, SC allows me to redraw 70% of value as a multi-currency overdraft with low interest rates 1%-2%.
I plan to buy Templeton Global Total Return Fund. Is it worthwhile to buy? Please advice.
I have some experience with this fund it is pitched as giving you "7-8%" dividends, but watch out for a slow loss in the asset value.
With any of these funds or etfs or whatever, I'd say - read the risk disclosure. If you can understand the terms and how the fund works - and this is acceptable to you. Go for it.
Thanks for your advice. The Templeton global total return fund AUD NAV hits its 10 years or so low, at approximately 8.72. The dividend is 9.4%. I plan to buy and keep it for long term. Besides, I also has the EUR version with dividend of 9.48% and its NAV value falling to 7.57 (I buy at 7.66). I do not know how low the NAV will decline. In view of the declining NAV, is it wise to buy the AUD version of templeton? Please advise. Thank you!
I have been holding EMIRATES NBD 18/28 MTN with 2.97% yield to maturity. I would like to sell the bond and buy the templeton global total return fund. Is it wise to do so? Please advise. Thank you!
1. as Shri points out, the NAV has been slowly dealing - the USD version of the fund has lost just over 30% of NAV over the last five years;
2. it's a bond fund. Given current interest rates, I have difficulty believing that the fund's historical yields can be maintained over the longer term - I can't think of any fixed or floating rate bonds that pay anything like 7-8% that I'd want to be caught holding when the next recession rolls around and the fund needs a whole portfolio of bonds yielding these rates to maintain the dividend (unless they draw down capital). With over 23% of assets in cash and equivalents and a "weighed average maturity" of 1.45 years at the moment I am very skeptical;
3. it's heavily weighted towards emerging market bonds - Brazil is the biggest weighting at 15% of total assets. Rather oddly, the USA has a negative 2.95% weighting. However, 78% of assets are "Local Currency Government / Agency Bonds so maybe the credit risk isn't all that high but then again, the average credit quality is BBB+ which implies a reasonable amount of the 255 bonds in the portfolio is rated lower than this
4. there is obviously currency risk but given the fund can hedge I have no idea how to quantify that risk. That said, about 72% of the fund's assets are in USD so maybe not that high.
After writing this, I did some more poking around and learned that 10 year Brazil Government bonds currently yield around 7.37% which after deducting the fund's TER of 1.38% leaves 5.99% for investors. Two year bonds (closer to the fund's average maturity) yield 5.66% which leaves 4.28% for investors (before currency risks and/or hedging costs). The yields from the next two highest weighted countries (Mexico and India) are lower than Brazil.
For entertainment, 6.3% of the fund's assets are invested in Argentina which offers an eye-popping estimated 25.5% yield on 10 year government bonds ... accompanied by this statement: "Current 5-Years Credit Default Swap quotation is 4,865.17 and implied probability of default is 81.09%." (emphasis from source - not me)