Regular Investment

Invest regularly at a specific interval takes the guess work and emotion out of investing. The disciplined approach of Ringgit cost averaging in a Unit Trust Fund of your choice evens out fluctuation in unit price. Investors could save themselves a lot of time, effort and money by beginning a plan.


What is Ringgit-Cost Averaging (RCA)?
RCA is a strategy in which you invest a fixed amount on a regular basis, usually monthly purchase of units in a unit trust fund. Your regular investment purchases less units when prices are high and more units when prices are low. By averaging the unit price paid, your average cost per unit will be lowered.

How Does It Work In Unit Trust Investment?

The table below shows investor A consistently invests RM3,000 on monthly basis into a unit trust fund for 10 months.


Month----NAV per unit (RM)----Monthly investment (RM)----Units accumulated
------------------------------------------------------------------------------------------
1 ---------------0.8876------------------------3,000------------------------ 3,379.90
2 ---------------0.8963----------------------- 3,000------------------------ 3,347.09
3 --------------- 0.9231-----------------------3,000------------------------ 3,249.92
4 --------------- 0.8756-----------------------3,000------------------------ 3,426.22
5 --------------- 0.8428-----------------------3,000------------------------ 3,559.56
6 --------------- 0.8289-----------------------3,000------------------------ 3,619.25
7 --------------- 0.7936-----------------------3,000------------------------ 3,780.24
8 --------------- 0.9981-----------------------3,000------------------------ 3,005.71
9 --------------- 1.0169-----------------------3,000------------------------ 2,950.14
10 -------------- 1.1231-----------------------3,000------------------------ 2,671.18
----------------------------------------------------------------------------------------------
---------------------------------------Total: 30,000------------------------ 32,989.23

Results:
Average cost per unit: RM0.9094
Average NAV (10 months): RM0.9186

As illustrated, with a monthly investment amount of RM3,000, investor A is able to accumulate more units when the NAV is low and fewer units during the time NAV rising. During the 10 months, investor A accumulated 32,989.23 units at average cost of RM0.9094. The average cost is lower than the average NAV for the same period which is RM0.9186.

Before you begin

1. Decide how much money you wish to invest monthly, making sure that you are able to invest consistently

2. Select the Unit Trust Fund(s) applicable to your risk profile

3. Select your preferred payment mode which allows auto-deduction from your bank account or credit card on a monthly basis

Types of Payment Mode for Regular Investment

At CIMB Wealth Advisors, we take away the hassles of investment by allowing regular investment via:

(a) Auto-Payment through your CIMB Bank MasterCard

(b) Progressive Payment Instruction through your Savings or Current Account maintained with CIMB Bank

(c) Auto debit service through your Savings or Current Account maintained with Maybank, Bank Simpanan Nasional, RHB Bank, EON

For more info please contact me.