Dear Mr. Tan,
I invested in this product almost 5 years ago. It will mature in 2008.
Name of product: Star Track II SGD
Amount invested: $5,000
Period of investment: 5 years
Return on maturity: Currently, it is worth only $4,373.80. Guaranteed to return back principle invested sum of $5000 on maturity.
Why was the product unsatisfactory? It give a worse return compared to savings account.
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REPLY
I found the following information from the website:
Capital protection:
In order to provide investors protection for 100% of the capital invested, DBS Star Track II will invest a substantial portion of its net assets in a combination of debt securities issued by corporations, governments, government agencies or supranationals.
Participation in the upside of equity stocks:
To give investors the opportunity to obtain capital appreciation at
maturity on 5 November 2008, the remaining net assets of the Fund will be invested in an option (the "Option"), linked to the performance of a basket of equity stocks.
The selection of 3 top performing stocks will be done after the 1st anniversary of the Fund to form a "star" basket, another selection of 3 top performing stocks will be done on the 3rd anniversary.
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REMARKS: Apparently, the options did not produce any return. Hence, the investor obtained only the return of capital (from the debt instruments). The fund has an annual fee of 1% (which eats away from the return).
Where do you all think the 7.5 milliion pay of the CEO come from? In fact, if you have noticed, more ATMs are shut down and queues at their ATMs are getting longer and longer. In short, customers are being short-changed as service level goes down while they think of more ways to eat into your savings!!!
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