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Hello readers! I hope Tuesday has been good to you :) Mr Llama is going to write on the sequel to the previous post.

Today, we are going to look at different plans that Unit Trust platforms offer.
And, the focus will be to compare each plans together, and work out what's best for you!

There are 3 main schemes of offer:
1. Model Portfolio
Source: DollarDex - What we offer?
This is an automated investing solution. First, you will have to undergo a simple questionnaire to classify yourself into an Aggressive, Moderate, or Conservative investor. Next, you will be able to invest a minimum of $1,000 for the initial set-up.

The $1,000 will be put into a portfolio of selected bond or equity funds, around a total of 11 different Unit Trusts.

Mr Llama will be analysing this against with Robo-Advisor schemes and sharing with you soon :)

2. Regular Savings Plan
Source: DollarDex - What we offer?
 This plan is rather straightforward. On a stipulated date every month, you pay an amount, say $1,000 in the example, and it is used to buy a specific fund. I believe the picture explains it well.

So, after a year, you will have an average price of the units you hold, instead of basing your investments off a one-time price. In this way, you are able to average out the price of your holdings.

3. Value-Averaging Plan
Source: DollarDex - What we offer?
Value-Averaging plan is a little more complicated compared to Regular-Savings plan. This allows you to have a fixed amount of Unit Trust holding at the end of a time-frame.

You will be made to buy less in an uptrend market, and buy more in a down trend market. In short, you are buying more when market is low, and buying less when market is up.

Investment Models for RSP & DSP

From Mr Llama's previous post, it was decided that Nikko AM Singapore Dividend Equity Fund is chosen as a desired investment. (Assuming you require a monthly payout of dvidends)

Mr Llama has ran a model according to full 2018 Net-Asset value information and actual dividend pay-out amounts. Model is from 1st Jan 2018 to 31st Dec 2018.

Fund: Nikko AM Singapore Dividend Equity Fund

Regular Savings Plan 1
Purchase $1,000 worth of Unit Trust on every 1st of each month. Next working day applies if 1st of month falls on a weekend.

Total units purchased:7,540.5
Amount invested across 12 months: $12,000
Dividends earned: $258.36
(*Dividend pay out only begins on 1st Feb 2018 as Dividend Ex-date falls on 1st of every month too.)

Avg Price of Units: $1.591
Value of holdings: $11,054.44 as of 9 Jan 2019
Overall performance: -5.73% (dividend gains accounted for)
Gain/loss: -$945.55
Source: Llama Finance - RSP at every 1st of month
Regular Savings Plan 2
Purchase $1,000 worth of Unit Trust on every 15th of each month. Next working day applies if 15th of month falls on a weekend.

Total units purchased:7,643.8
Amount invested across 12 months: $12,000
Dividends earned: $255.77
(*Dividend pay out only begins on 15th Feb 2018 as Dividend Ex-date falls on 1st of every month.)

Avg Price of Units: $1.570
Value of holdings: $11205.86 as of 9 Jan 2019
Overall performance: -4.49% (dividend gains accounted for)
Gain/loss: -$794.14
Source: Llama Finance - RSP at every 15th of month
Value-Averaging Plan 1
Purchase enough Unit Trusts to ensure that value of portfolio rises $1,000 by 1st of each month. Next working day applies if 1st of month falls on a weekend.

Total units purchased:8,064.516
Amount invested across 12 months: $12,774.18
Dividends earned: $270.83
(*Dividend pay out only begins on 1st Feb 2018 as Dividend Ex-date falls on 1st of every month too.)

Avg Price of Units: $1.584
Value of holdings: $11,822.58 as of 9 Jan 2019
Overall performance: -5.33% (dividend gains accounted for)
Gain/loss: -$951.60
Source: Llama Finance - VAP at every 1st of month


Value-Averaging Plan 2
Purchase enough Unit Trusts to ensure that value of portfolio rises $1,000 by 15th of each month. Next working day applies if 15th of month falls on a weekend.

Total units purchased:8,275.862
Amount invested across 12 months: $12,955.15
Dividends earned: $280.80
(*Dividend pay out only begins on 15th Feb 2018 as Dividend Ex-date falls on 1st of every month.)

Avg Price of Units: $1.565
Value of holdings: $12132.41 as of 9 Jan 2019
Overall performance: -4.18% (dividend gains accounted for)
Gain/loss: -$822.73
Source: Llama Finance - VAP at every 15th of month
Conclusion

Source: DollarDex NAV history of Nikko AM Singapore Divdend Equity Fund

Above is Price history chart for your reference. Performance were marked to 9 Jan 2019 NAV of 1.466.
It seems that Value-Averaging plans work out to better performance. VAP 1 did 0.4% better than RSP 1, while VAP 2 did 0.31% better than RSP 2. However, more funds were required for VAP plans in general, while RSP only required the fixed amount you plan to invest monthly.

Hence, if you have sufficient funds, Mr Llama suggests you to go for VAP. If your financial habits only allow you a fixed sum of spare cash, RSP is more suitable for you.

Personally, Mr Llama does not adopt both RSP and VAP. Instead, Mr Llama has his own set of indicators for each Unit Trust purchase made. He shall write about how he self-manages his portfolio soon :)

Please help by commenting below if you find anything amiss, or reach out if you have queries!
Always happy to learn and share :)

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