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The Right Partner In Your Investment Journey

The Right Partner In Your Investment Journey

Investors can sometimes overlook their risk appetite in the pursuit for returns. This can potentially lead them to make the wrong judgement in who they put their trust in and ultimately fall victim to poor investment decisions.

Some older investors may well recall, the Global Financial Crisis saw thousands of local investors lose their entire retirement savings to Lehman-linked products. In the investigation report released by the Monetary Authority of Singapore (“MAS”), findings revealed that there were extensive mis-selling of Lehman products, even to the vulnerable investors.

It became Déjà vu all over again with the Hyflux saga in 2018, this time implicating 34,000 mom-and-pop investors who bought into perpetual notes and perpetual shares (“Perps”) issued by the embattled water treatment company. In one of the most high-profile debt restructuring cases seen in the city state, the amount owed to retail investors totaled over $900 million, dwarfing the $500 million in dues from the Lehman collapse. Yet to this day, no resolution has been reached after multiple deals fell through one after another, and investors are still left hanging.

On top of all these, retail investors are also vulnerable to illegitimate investment ruses that we so often hear about. In fact, according to the Singapore Police Force, victims were cheated of at least $1.6 million investing in fake loan schemes in January to March 2020. The largest amount cheated in a single case was $92,000.

Spotting Red Flags

The thing with any investment is that it comes with risk. The rewards of greater returns are simply the compensation to investors for taking on greater amount of risks. This “risk-return trade off” is an investment principle since time immemorial.

As with all unsound investment schemes though, the most obvious red flag that should set your radar off is always the promise of high returns to low or no risk.  As the old adage goes, “if it is too good to be true, it probably is.”

Another common tactic used by illicit operators is the offer of exceptionally attractive commissions, bonuses or discounts for referring friends and families. Illegitimate schemes often put up money incentives to dupe their victims as a quick way to enlarge their investor base.

In order to steer clear of shady investments or unlicensed brokers, investors should research to verify legitimacy of any investment scheme before investing in it. There are some publicly available records kept by the MAS that can be useful for such purposes. For instance, the Financial Institutions Directory keeps a list of regulated financial institutions, while the Investor Alert List  keeps records of unregulated persons or entities who may have been wrongly perceived as being licensed or regulated by the MAS.

The MAS also keeps a Register of Representatives (“the Register”), a public record of individuals who conduct regulated activities. Investors are strongly advised to check the Register to verify a representative’s credentials to avoid dealing with an unauthorized person.

Finding The Right Partner Goes A Long Way

As illustrated by the above examples, many retail investors that had lost money investing in Lehman-linked products or Hyflux Perps did not fully comprehend what they were investing into. In both cases, many had claimed that they had been misled to perceive such products as straight bonds when they were in fact much more complex.

Since not everyone is well-equipped to navigate the wide swath of technical investment options themselves, it may well be beneficial for this group of investors to entrust investment decisions to a competent and trustworthy fund management company (“FMCs”) that can better help them secure their financial well-being. 

At Phillip Capital Management (“PCM”), prudence and rigorous due diligence serve as the bedrock for all of our investment decisions. As stewards for our clients’ monies, we undertake the role of helping them discern good investments from bad ones. For our various actively managed funds, we further bring value to clients by navigating uncertainties, and identifying opportunities when the market is inefficient and where assets do not reflect their intrinsic value.

For investors that prefer the passive approach to investing, PCM has also brought to market, some innovative exchange traded funds (“ETFs”) with investment strategies that were once not typically offered by other FMCs.

Regardless whether one wants to build an income portfolio or growth portfolio, clients can gain access to professional investment solutions through the various product structures or investment vehicles in PCM’s ecosystem.

Important Information

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM. An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details. Investments are subject to investment risks including the possible loss of the principal amount invested, and are not obligations of, deposits in, guaranteed or insured by PCM or any of its subsidiaries, associates, affiliates or PDs. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved. Any use of financial derivative instruments will be for hedging and/or for efficient portfolio management. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products. The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <> for more information in relation to the dividend distributions. The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice. The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. This advertisement has not been reviewed by the Monetary Authority of Singapore.

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