Unit Trusts Monthly Investment Plan (MIP)

What is the Unit Trust Monthly Investment Plan?

With a Unit Trust Monthly Investment plan, a fixed amount is debited from your account each month to purchase units of your selected Unit Trusts. You can choose from a wide range of funds with various asset classes managed by different fund houses, and make regular contributions to a fund within a specific timeframe or amount to be accumulated for your investment.

Why is the Monthly Investment Plan right for me?
Saving is necessary, and investing is just as important. Investing should be an integral part of your future plans to grow your wealth. A dollar saved today may buy you less in five or ten years time, because of inflation it is crucial that advanced planning is made to maintain the value of your dollars. In addition, the cost of essentials like education, housing and medical services may rise faster than your savings.

The Monthly Investment Plan (MIP) was created so that you could build your portfolio steadily through regular monthly contributions. This translates to you being able to accumulate your wealth and have a peace of mind that you are well-covered for your future needs.

Benefits

Smooth out market volatility and benefit from the effects of Dollar Cost Averaging.
Enjoy preferential pricing for online subscriptions.
Flexible to define your contribution period according to your budget and spread your intended sum of investment over a period of time, which saves you the hassle in timing the market

How does the Monthly Investment Plan work?

With a Monthly Investment Plan, you will invest over a period of time and acquire units at different prices. When the unit trust prices go down, your monthly contribution buys more units. When the price goes up, fewer units will be bought, but your total unit trust portfolio holding will benefit from the rising market. Over time, the average price that you have paid for units is likely to be lower than the market price because you will have bought more units at lower prices.

This investment method is called dollar cost averaging, and it enables you to buy unit trusts at close to their average price over a period if time. It helps smooth out the peaks and troughs, offsetting market volatility, so the risk arising from short-term market fluctuations will be reduced.

Example:

Month	Investment (BND)	Unit Price (BND)	Number of Units
January	1,000	1.00	1,000
February	1,000	0.89	1,124
March	1,000	0.90	1,111
April	1,000	1.01	990
May	1,000	1.08	926
June	1,000	0.96	1,042
		0.973 (Average market price)*

In the above example, you invest a total of BND6,000 to purchase 6,193 units over six months at an average unit cost+ of BND0.969. Dollar Cost Averaging therefore enables you to buy units lower than the average market price of HKD0.973 over the period.

The figures provided in this example are for illustrative purposes only and are not indicative of the actual result of the investment.

*average market price = sum of unit prices ÷ number of periods
+average unit cost = total investments ÷ total number of units purchased

Getting started

Where should I start?

The first thing you should do is figure out how much you'd like to save and the reason for saving. For example, your plans will vary in fund types and time frames if you’re saving for that overdue holiday, planning for your child's future, or sitting back and enjoying life permanently. It is important that you have an estimated amount in your head as it will dictate how much you are able to put aside regularly each month.

How much risk should I take?

Each person has their own level of risk that they are willing to take. To help you determine what is yours, HSBC has in place a free financial planning review that can help you assess the types of funds that are acceptable in relation to your objectives and risk appetite.

Which types of funds are right for me?

Here are some types of funds that you might be interested in:

Equity funds in general have a good record in terms of long-term returns, followed by bond funds. Equity funds are considered volatile in comparison to bond funds.
Regional equity funds have fewer risks than single-market equity funds, and exhibit less volatility.
As a rule of thumb, the greater the return, the greater the risks.
Bond funds are more appropriate for people who want a stable income from their portfolios.

Basic Information:

Minimum initial investment*	BND1,000 per fund
Minimum monthly contribution via direct debit*	BND100 per fund
Minimum monthly contribution via credit card*	BND200 per fund
Maximum monthly contribution via credit card*	BND500 per fund
Initial fee on Unit Trust*	3% - 5.5%
Annual management fee on unit trust*	0.25% - 2.5%
Direct debit date	1st of the month (through a bank account) 1st of the month (through credit card)
*Subject to Key Feature Documents and Fund Factsheets

Numerical example of how units are allotted
Your investment of BND1,000 less BND52.50 (initial sales charge of 5,25%) at an issue price of BND1.00 will give you a net investment amount of BND947.50 and 947.5 units.

How do I contribute monthly?

Payments can be made through your bank account automatically via direct debit or via your credit card. After your contributions have been cleared, your units will be issued within five business days.

Can I change the monthly contributions amount?

The monthly investment plan is all about flexibility therefore you are able to increase or decrease your monthly contributions, redirect fund allocations, redeem your units or even altering the debit date with hassle-free. All of these services are available to you free of charge.

Quarterly statements

During each quarter, you will receive your portfolio statement. For customers that have an Investment Services account with us, your MIP portfolio can also be seen in your monthly Investment Services account statement.

How do I get started?

Visit any of our branches today for a free financial planning review or call 2 252 252 for more information. You could also set up a Unit Trusts Monthly Investment Plan (MIP) online. All you need to do is log in / register onto our Personal Internet Banking and send a secured message via our 'Contact Centre' menu with 'Investment and Unit Trust' as the subject.

Please note:
Investment involves risk. The prospectus of the funds should be read for further details. The price of units or shares and the income from them may go down as well as up and any past performance figures shown are not indicative of future performance. The information contained on this website is intended for Brunei Darussalam residents only and should not be construed as a distribution, an offer to sell, or a solicitation to buy any securities in any jurisdiction where such activities would be unlawful under the laws of such jurisdiction, in particular the United States of America and Canada. Please refer to the full Unit Trust disclaimer for further important details.

The above is for general information and is not meant to constitute and therefore should not be construed as advice on any matter. Due professional advice analysing individual facts and circumstances should be sought before taking any decision. Whilst reasonable care has been taken in compiling the information, HSBC makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. No obligation or liability of any nature whatsoever is assumed by HSBC in releasing this information.

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