Friday, August 11, 2006

NTUC Income ILP Funds perform better than other funds

In the S&P website, the ILP funds of NTUC Income give a higher return than similar funds managed by other insurers. The difference is about 2 percent per annum.

Is it because NTUC Income fund managers were more skilled or perhaps more lucky? I do not think so.

The most likely reason is that our funds have lower costs. Dr Money has made an analysis of the cost. It is posted in his website,

If you invest $100,000 for 10 years, what is the difference of 2% per annum in yield?

It is $34,000. This is the difference between earning 5% and 7% per annum. Yes, it is a lot of money. Yes, you can earn $34,000 more by investing with NTUC Income (and earn a 2% higher return), due to our lower charges.


James Ong said...

Dear Sir,

From a neutral point of view, I strongly feel that you are misleading the general public.

First of all, I agree that a lower expense ratio is a benefit to investors.

With that said, I must point out the fact that there are many funds with higher expense ratios that outperformed NTUC funds with low expense ratios. For e.g, Aviva Emg Countries Gr (SP), Manulife Gldn Regional China, AXA Life-Fortress, Greatlink Enhancer and many more...

All returns are subjected to the future performance of underlying funds. By comparing past performances of funds based solely on the 3-year period only, we are only telling a small part of the story to the general public.

Therefore, as much as we welcome funds with low expense ratios, we should not condemn other funds with higher expense ratios, esp if they have been consistently outperforming NTUC funds.

Justin Lim said...

Hey James,

If you have not already noticed, "Income is the Best" on this "Personal View" blog. I have highlighted that TKL's view are extremely bias and at times, misleading.

Things are simple here...
Cheap = Good
Cheaper = Better
Cheapest = Best
However, we all know in the real world, this is full of crap.

You expect advisers to be professional, upgrade, do financial planning, etc... The market place is getting complicated. Customers are well read / well-informed. Pay peanuts and you will only get monkeys.
Unless you expect agents to only take order and process the paperwork... How is the industry going to progress??? How are we to catch up with UK and Australia...?

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