It's Dec, Load Up Your PRS and Save RM720 in Taxes!

Did the title grab your attention? :) Well it is true that you can save RM720/RM570 if you are earning at least RM80k/RM60k annual chargeable income before RM3,000 PRS Relief.

Recently Fundsupermart wrote a good article on An Overview of PRS Fund Performance (2 Dec 2016) (see link) which I concur of their analysis. Here's a summary of it and some of my own comments:

Growth Fund
CIMB-Principal PRS Plus Asia Pacific Ex Japan Equity-Class C (highest Sharpe 0.89 but highest volatility 10.2% - China/HK exposure). This fund feeds into 100% of CIMB-Principal Asia Pacific Dynamic Income Fund-MYR. Aboi has holdings in this fund.

Balanced Fund
Affin Hwang PRS Moderate Fund (highest Sharpe 0.56 with volatility 4.7%). This fund feeds into [1] 25% of Affin Hwang Select Asia Pacific (ex Japan) Select Balanced Fund [2] 25% of Affin Hwang Select Bond Fund [3] 19% of Affin Hwang Select Dividend Fund [4] 11% of Affin Hwang Select Asia (ex Japan) Opportunity Fund and [5] 10% of Affin Hwang Select Balanced Fund.

Conservative Fund
AmPRS-Tactical Bond Fund-Class D (75% exposure to MYR denominated bonds, Sharpe 0.66 with volatility of 3.4%). This fund feeds into 100% AmTactical Bond- Class B (MYR).

Others (REIT)
AmPRS - Asia Pacific REITs - Class D (property Asia including Japan). This fund feeds into 100% AmAsia Pacific REITs - Class B (MYR). Aboi has holdings in this fund.

Notes
- The choice of funds have overseas exposure which is better in terms of distributing risks as well as more diversified investment opportunities.

- In lieu of Trump victory and higher likelihood of inflation to return, AmPRS Tactical Bond Fund wouldn't be a good choice given the current investing climate where possibility of an interest rate hike is almost certain. Bond prices have an inverse relationship with interest rates.

- In Budget 2017, our dear Bijan increased the Youth Incentive (see link) from RM500 to RM1000! With an initial investment of RM1000 you can afford to lose 50% and still retain your initial investment. It never occurred to me that our Supreme Leader would actually do something beneficial for the Rakyat.

- Cross checked Morningstar Fund Quickrank for PRS (see link). Public Mutual PRS funds did not outperform any of the above in their respective categories. (3 year period). Sorry agents I know I'm not doing you any sales favour here.

- Public Mutual/Manulife funds have the highest TER (total expense ratio). This actually eats away your annual fund return rate like a virus.