Government Sponsored Trust Funds

The second chapter in this research project is about the literature review related to the research topic which is the factors that influence the generation Y toward the government sponsored unit trust investment. In this chapter, the researcher will discuss about the important of government sponsored unit trust investment and the USA government sponsored unit trust. Besides that, the researcher try to search the journals or articles from other researchers that related to the topic mentioned above. The researcher will do the literature review from other researcher’s opinion and research founded about the factors included return, risky, tax benefits, liquidity, professional management that will influence the unit trust investment as well.

2.2 The Social Security Trust Funds (USA Government Sponsored Trust Funds)

The U.S.A government had issue a government sponsored unit trust fund called the Social Security Trust Funds. The Social Security Trust Funds system is a pay as you go system which refer to the payments to current retirees come from current payments into the system. The U.S.A government reports for excess paid-in participation from the workers and employers to the Social Security system which are not need to stock current benefit payments to the retirees, disabled people or survivors (Social Security Administration, 2011).

Paid-in participation that surpasses the required sum to fully fund current payments to beneficiaries are invested in the securities or assets issued by the U.S.A government. The securities form the assets of the Social Security Trust Fund and because under U.S.A federal law these securities are refer to future obligations that must be repaid. The part of the national debt that is not reflect “publicly held” portray the obligations bring on by the U.S.A government to itself (Wikipedia, 2011).

The word “Social Security Trust Funds” can explained to something of a misnomer as the Social Security Administration of U.S.A actually supervise two type of separate funds that hold federal government debt obligations related to what are traditionally thinking of as social security advantages. The larger of Social Security Trust Funds is the Old Age and Survivors Insurance (OASI) Trust Fund. OASI holds in trust those interest related securities that the federal government willing to fulfill to pay future benefits to the retirees or survivors. Besides that, the smaller fund is the Disability Insurance (DI) Trust Fund. DI Trust Fund holds in trust those securities that the federal government willing to fulfill to pay benefits to those who are disable and unqualified of productive work as well as to their life partner and family members (Social Security Administration, 2011).

The Social Security Trust Funds will benefits to the retired workers and the family member of deceased workers. The Social Security Trust Funds also will benefits to the disable workers and their family members are paid from the Disability Insurance (DI) Trust Fund. Based on the study, there was more than 98 percent of total payout in 2010 were pay for the benefit payments. The U.S.A government was set up a board of trustees to look after the financial operations of the trust funds and trustees will reports to the Congress on the financial performance of the trust funds annually (Social Security Administration, 2011).

Unlike a symbolic private pension plan, the Social Security Trust Fund does not hold any marketable assets to protected workers’ paid-in contributions while it hold non negotiable U.S.A Treasury bonds and securities which backed by the full trust and credit of the U.S.A government (Wikipedia, 2011).

From the economic view, if the Social Security Trust Fund makes the government expenditure increase then the trust fund is not advantage to national savings because no money is being preserved. On the other hand, if the government expenditure and tax rates are not influence by the trust fund then the trust fund has helpful to the national savings. If trust fund increases the national savings level then the trust funds has execute the objective of saving revenues for future national expenditure and this has been the subject of important dispute (Wikipedia, 2011).

2.3 Important of Government Sponsored Unit Trust Investment

Government sponsored unit trust is one of the unit trust investment which is sponsored by the government in way to achieve economic benefits of country, specific goal, and increase the number of trust holders. Government sponsored unit trust funds is differ with private unit trust funds. Government sponsored unit trust funds is more secure compare with private unit trust funds due to government sponsored unit trust funds is manage by a government related company and it is hard to hear that government sponsored unit trust funds facing losing in their portfolio investment or having trust funds financial problems. Peoples are more confidence to government sponsored unit trust fund investment because of the good performance of government sponsored unit trust in the rate of return. We can see nowadays many citizens are willing to buy government sponsored unit trust fund especially for the young generation as well. The stable and return rate which higher than banks fix deposit rate are the most factor to attract them to buy government sponsored unit trust funds (ASNB, 2011).

Nowadays, the unit holders of government sponsored unit trust investment between age 18 until 35 are getting more and more. They look for the government sponsored unit trust investment as a main way to increase their income. The 2008 global financial crisis was affected our country economic growth. Moreover, high inflation rate create price increasing on most of the daily goods and services in our country. Malaysia workforce especially generation Y is burden on this situation and they try to find way to increase they income to overcome the life. Low bank interest rate and high risk investment products are not attractiveness to them at all and they started feel that government sponsored unit trust fund investment is suitable for them since it is sponsored by the government and comfortable rate of return. They aware that become a unit holder of government sponsored trust fund is important and benefit to them to enlarge their income. The middle low income citizens can utilize this chance to invest in government sponsored unit trust funds to create more wealth in way to improve their economic condition since everyone has same opportunity in government sponsored unit trust investment.

The government sponsored unit trust fund investment deliver most of the important “know how” of investing to those best furnished to manage it which is the professional fund managers. The benefits that can get from the government sponsored unit trust funds investment are diversification, affordability, liquidity, professional fund management, wholesale investment costs, investment exposure, access to other asset classes and ease of regulation (FIMM, 2011).

Furthermore, invest in government sponsored unit trust can help the investor to cover the high cost of education for their children. The parent can reduce their burden on children’s education fees if they invest in government sponsored unit trust more early because this unit trust is a medium to long term investment. Next, government sponsored unit trust investment can also aid people to pay off the housing mortgage more early or able to buy another house. As people know that growing old and retiring is unavoidable and it is never too early to plan for retirement even though we have the Employees’ Provident Fund (EPF). The people should aware about the right and choice to retire in comfortable and ease environment in future so invest in government sponsored unit trust in the easy way for retirees to achieve their dream. Besides that, people can withdraw the cash from their unit trust account if happen any unexpected emergencies in future time (FIMM, 2011).

2.4 Selecting Criteria on Unit Trust Funds

According to Ooi Kok Hwa’s article publish in The Star Online (2009), unit trust always offer a desirable substitute to the investors who willing to get benefit from the unit trust investment diversification and enjoy the stable and higher return rate as compared to other type of investment. However, Ooi aware that many people are misunderstanding and misconception about the diversification nature of the unit trust funds. Some people simply choose any unit trust funds that they like to invest just because of the low risk in unit trust funds investment. Based on Ooi’s opinion, the investors should have some basic knowledge and understanding about the unit trust funds and do some research before they choose to invest in unit trust funds (The Star Online, 2009).

Besides that, every investor should know about their investment objective and risk tolerance levels very clearly before invest in unit trust funds. The retirees should look into the income funds which are more foreseeable while the young generation or parent should look into the growth funds which will gain high return but with high level of risk too. One of the key criteria they need to aware is investment strategy. Every fund has its own investment profile and strategy plan which the investors should know and understand about it to make sure that it suit to their investment objective and within the risk tolerance level (The Star Online, 2009).

Furthermore, the past performance of unit trust funds should be aware before making decision to invest on it. The investors should realize that good past performance will not repeated again in a very short future time and shun from overly arouse to see good performance on the new funds. Besides that, investors also need to aware about the cost of the funds. Some unit trust funds will charge administration fees or sale fees to the investors when they buy or sell the funds. Fund performance is a measure of the fund growth and if the fund managers always change by time, this will make some problem to the investors to make investment decision because different manager has different styles which will influence that performance of the funds (The Star Online, 2009).

Malaysia Unit Trusts

Malaysia introduced the unit trust idea relatively early compared to other Asian countries. The unit trust investment was first established by a company called Malayan Unit Trust Limited. The unit trust industry history in Malaysia can be divided into four periods (FIMM, 2011).

2.5.1 The Period from 1959 to 1979 (Formative Period)

The formative period in the history of the Malaysia unit trust industry were describe by leisurely growth in the sales of units and a lack of public concern in the unit trust products. In that period, there was only five unit trust management companies with a total of 18 funds introduced to public. The unit trust industry was managed by the Registrar of Companies, the Public Trustee of Malaysia, Ministry of Domestic Trade and Consumer Affairs and the Centre Bank of Malaysia. The state government sponsored unit trusts was appear at that period in response to the government objective to increase the domestic household savings level (FIMM, 2011).

2.5.2 The Period from 1980 to 1990

Malaysia government start participate in the Unit Trust Industry and they form a committee to manage and control the unit trust industry named the Informal Committee for Unit Trust Funds which included representatives from the Registrar of Companies, the Public Trustee of Malaysia, Centre Bank of Malaysia and the Capital Issues Committee (FIMM, 2011).

In 1981, the development of the unit trust industry was significant progress when the Scheme Amanah Saham National was introduced by the Permodalan National Berhad (PNB). The total units contribute by the public billowed to an unduplicated level due to the overwhelming response to the Amanah Saham National although only 11 funds being introduced during this period (FIMM, 2011).

2.5.3 The Period from 1991 to 1999 (Fastest growth)

The number of unit trust management companies established and funds under management was increasing rapidly and the unit trust industry was very prosperity in this period. on 1 March 1993, Securities Commission was established to centralize the regulations of unit trust with the implementation of the Securities Commission (Unit Trust Scheme) Regulations 1996. The Amanah Saham National and Amanah Saham Native (Amanah Saham Bumiputera) adopted marketing strategies to played key roles in produce unit trusts household products in Malaysia. Hence, the total asset value of funds grew from RM 15.72 billion at year 1992 to RM59.95 billion at year 1996. The greater product innovation and deregulation of the industry was founded in this period although the speed of growth of unit trust funds has slow down when the Asian financial crisis 1997 but it has notwithstanding keep on it potential to grow as well (FIMM, 2011).

2.5.4 The Period from 2000 to current

The unit trust industry grows with double digit from 2000 until 2007. The industry grows from RM 43 billion in year 2000 to RM 169 billion in year 2007. However, this strong performance has been prevent and affected by the World financial crisis happen in 2008 which starting from the fallout of the subprime loans in the U.S.A. In December 2008, the unit trust industry net asset value falling to RM 134 billion. While the industry net asset value has felled by 20 percent over the last 10 months. In other word, the unit trust industry drop is less stern than the fall in share prices in Bursa Malaysia due to the diversification of the unit trust investment (FIMM, 2011).

Permodalan National Berhad

In March 1978, Permodalan National Berhad (PNB) was established as an important instrument consistent with the Malaysia Government’s New Economic Policy to increase share ownership in the financial sector among the Malay native and offer more opportunities for qualified Malay native professionals to improve the economic condition of Malay native. Before established Permodalan National Berhad, the endeavors to increase Malay native share ownership in the financial sector were not successful and not satisfied as shares distributed to individuals were rarely held by Malay native. This is because most of the Malay native shareholders will no longer keep up their profits or reinvested after they sold out their shares (PNB, 2011).

Through Permodalan National Berhad (PNB), authentic shares gain in major Malaysian corporations from funds furnish by Native Investment Foundation were passing to a trust fund and sold to the Malay native in the type of smaller units. Permodalan National Berhad will assure that the shares are held will resulting in the developed of widespread savings nature and development of investment skills of Malay native. Permodalan national Berhad is the top leading investment institution which diversified portfolio of interests which cover unit trusts, institution property trust, asset management and property management (PNB, 2011).

The vision of Permodalan National Berhad is “We will be the world class investment organization, distinctive and successful in everything we do.” The mission of the Permodalan National Berhad is “We are the premier investment organization committed to enhance the economic wealth of the Malay native community in particular and contribute towards the growth and prosperity of the nation for the benefit of Malaysian (PNB, 2011).

2.7 Malaysia Government Sponsored Unit Trust Funds

In the late 1970, Malaysia government was founded the economic level between the Malay native and non Malay native was big different and this situation was not a good signal for the country economic growth and harmonious society development. To find out a solution on this, our government had establish a government related company which is Permodalan National Berhad with main objective to increase the ownership in corporate and finance sector for Malay native and create more opportunity for them to invest and participant in creation of wealth. The Permodalan National Berhad later on establish a professional fund management company call Amanah Saham National Berhad to manage all of the funds offer by Permodalan National Berhad. Malaysia government sponsored unit trust investment helped the Malay native has same opportunity with non Malay native to create wealth through government sponsored unit trust investment which is more secure compare with private unit trust investment in their eye.

2.7.1 Amanah Saham National Berhad

Amanah Saham National Berhad (ASNB) is a wholly-owned subsidiary company of Permodalan National Berhad (PNB). Amanah Saham National Berhad (ASNB) is the management company of government sponsored unit trust funds such as Amanah Saham National, Amanah Saham National 2, Amanah Saham National 3, Amanah Saham Gemilang Pendidikan, Amanah Saham Gemilang-Kesihatan, Amanah Saham Gemilang-Persaraan, Amanah Saham Bumiputra, Amanah Saham Wawasan 2020, Amanah Saham Malaysia, Amanah Saham Didik and Amanah Saham 1Malaysia (ASNB, 2011).

Amanah Saham National Berhad (ASNB) was established on 22 May 1979 to manage and control the government sponsored unit trust funds introduced by the Permodalan National Berhad (PNB). Amanah Saham National Berhad (ASNB) is already has experience in the unit trust fund industry for more than 30 years and Amanah Saham National Berhad (ASNB) has substantiate to preserve its position as a leader in unit trust market which has more than 40 percent market share (ASNB, 2011).

2.7.1.1 Scheme Amanah Saham National

Scheme Amanah Saham National is growth fund which categorize in equity. Scheme Amanah Saham National is introduced on April 20 1981 with the main objective to generate satisfaction level of income distribution to the unit holders through a diversification investments portfolio. The potential investors are those who understand investment risks and seeking growth of capital over the medium to long term period and it only offer to the Malaysian Malay native who age 18 and above. The fund size of Scheme Amanah Saham National is RM 2.5 billion units and the selling and buying price per unit is at net asset value. 5 percent sales charge per unit will be imposed upon a purchase of a unit (ASNB, 2011).

Table 2.0

Scheme Amanah Saham National Fund Performance

Year End 31 December

2008

2009

2010

Net Distribution per unit (sen)

5.50

5.20

6.00

Total Return (%)

(34.04)

43.41

18.73

NAV per unit Highest (RM)

0.9857

0.7715

0.8977

NAV per unit Lowest (RM)

0.5619

0.5389

0.7409

(Source: Scheme Amanah Saham National annual report, 2010)

2.7.1.2 Amanah Saham National 2 (ASN 2)

Amanah Saham National 2 (ASN 2) is same type with the Scheme Amanah Saham National. ASN 2 is only offer for those Malaysian Malay native who age 18 and above. The objective of ASN 2 is to provide unit holders with a satisfaction dividend yield as well as capital appreciation through investments made in accordance with the performance, the guidelines and securities law in a diversification of investment portfolio of securities mainly in Malaysian equity securities. The fund size for ASN 2 is RM 2.5 billion units and 5 percent sales charge per unit will be imposed upon purchase of units to the non EPF members while 3 percent sales charge per unit will be imposed upon purchase of units to the EPF members (effective on 1 January 2008) (ASNB, 2011).

Table 3.0

Amanah Saham National 2 (ASN 2) Fund Performance

Year End 30 June

2008

2009

2010

Net Distribution per unit (sen)

5.50

5.20

5.20

Total Return (%)

(0.39)

(2.53)

18.25

NAV per unit Highest (RM)

1.2029

0.9876

1.0267

NAV per unit Lowest (RM)

0.9758

0.7753

0.9073

(Source: Amanah Saham National 2 annual report, 2010)

2.7.1.3 Amanah Saham National 3 Imbang (ASN 3)

Amanah Saham National 3 Imbang (ASN 3) is a type of balance funds in the equity and other capital market instruments category. Amanah Saham National 3 Imbang (ASN 3) is introduced on October 16 2001 and it offer for those Malaysian 18 years and above. The objective for ASN 3 is to gain capital growth over the medium to long term period through invests in a balanced portfolio of investments. The fund size of Amanah Saham National 3 Imbang is RM 1.00 billion units. 5 percent sales charge per unit will be charge upon purchase of units to the non EPF members while 3 percent sales charge per unit will be charge upon purchase of units to the EPF members (effective on 1 January 2008) (ASNB, 2011).

Table 4.0

Amanah Saham National 3 Imbang (ASN 3) Fund Performance

Year End 30 November

2008

2009

2010

Net Distribution per unit (sen)

7.00

5.50

6.00

Total Return (%)

(17.96)

21.96

12.60

NAV per unit Highest (RM)

1.2314

1.0729

1.1426

NAV per unit Lowest (RM)

0.8742

0.8598

1.0062

(Source: Amanah Saham National 3 Imbang annual reports, 2010)

2.7.1.4 Amanah Saham Gemilang (ASG)

Amanah Saham Gemilang is a group of ASG-Amanah Saham Pendidikan, ASG-Amanah Saham Kesihatan and ASG-Amanah Saham Persaraan. Three of these funds are a growth and income funds which introduced on 17 March 2003. ASG-Amanah Saham Pendidikan is to give investment opportunity to meet part or all of the periodic liquidity requirements of the unit holders and empower them to execute the financial planning needed.

ASG-Amanah Saham Kesihatan is to furnish investment opportunity to meet the part or all of the immediate liquidity requirements to make sure the unit holders and their children meet their medical requirements in the long run while ASG-Amanah Saham Persaraan is to furnish investment opportunity which generates satisfaction long run growth and returns and a dependable income pour to enable the unit holders to meet part or all of their retirement needs in the future (ASNB, 2011).

Amanah Saham Gemilang has two type of account which account Adult is offer for those Malaysian 18 years and above while account Smart is offer for those Malaysian 18 years and above as guardian for minors age above 6 months old but below 18 years. The fund size of ASG is RM 1.00 billion units and 5 percent sales charge per unit will be charge upon purchase of units to the non EPF members while 3 percent sales charge per unit will be charge upon purchase of units to the EPF members (effective on 1 January 2008) (ASNB, 2011).

Table 5.0

Amanah Saham Gemilang (ASG) Fund Performance

ASG – Amanah Saham Pendidikan

Year End 31 March

2008

2009

2010

Net Distribution per unit (sen)

7.00

5.50

5.50

Total Return (%)

4.20

(15.45)

33.98

NAV per unit Highest (RM)

1.1290

0.9825

1.0111

NAV per unit Lowest (RM)

0.9583

0.7552

0.7605

(Source: ASG – Amanah Saham Pendidikan annual report, 2010)

Table 6.0

ASG – Amanah Saham Kesihatan

Year End 31 March

2008

2009

2010

Net Distribution per unit (sen)

7.25

6.00

6.00

Total Return (%)

4.58

(20.22)

37.42

NAV per unit Highest (RM)

1.2580

1.0638

1.0524

NAV per unit Lowest (RM)

1.0352

0.7664

0.7729

(Source: ASG – Amanah Saham Kesihatan annual report, 2010)

Table 7.0

ASG – Amanah Saham Persaraan

Year End 31 March

2008

2009

2010

Net Distribution per unit (sen)

6.75

5.00

5.00

Total Return (%)

5.28

(14.47)

31.06

NAV per unit Highest (RM)

1.1713

1.0212

1.0554

NAV per unit Lowest (RM)

0.9951

0.8059

0.8111

(Source: ASG – Amanah Saham Persaraan annual report, 2010)

2.7.1.5 Scheme Amanah Saham Bumiputera (ASB)

Scheme Amanah Saham Bumiputera (ASB) is an income funds in the equity category. Amanah Saham Bumiputera is only offer to Malaysian Malay native and divided into two account which is account Adult and account Teenager. The maximum investment units for account Adult is 200,000 units on other hand for account Teenager is 10,000 units. The price per unit is fix which is RM 1.00 and the fund size is unlimited. There was no any sales charge and redemption charge to unit holders (ASNB, 2011).

Table 8.0

Scheme Amanah Saham Bumiputera (ASB) Fund Performance

Year End 31 December

2008

2009

2010

Net Distribution per unit (sen)

7.00

7.30

7.50

Bonus per unit (sen)

1.75

1.25

1.25

(Source: Scheme Amanah Saham Bumiputera annual report, 2010)

2.7.1.6 Amanah Saham Malaysia (ASM)

Amanah Saham Malaysia (ASM) is an income fund in equity category which introduced on 20 April 2000. Amanah Saham Malaysia is offer to all Malaysian who age 6 months old above but below 18 years (account Smart) and 18 years old and above (account Adult). The price per unit is RM1.00 and has fund size RM 13.0 billion units. The maximum investment units of Amanah Saham Malaysia is unlimited but subject to the availability units of the fund (ASNB, 2011).

Table 9.0

Amanah Saham Malaysia (ASM) Fund Performance

Year End 31 March

2008

2009

2010

Net Distribution per unit (sen)

7.80

6.25

6.30

(Source: Amanah Saham Malaysia annual report, 2010)

2.7.1.7 Amanah Saham Didik (ASD)

Amanah Saham Didik (ASD) is a growth fund in equity category. It is introduced on 20 April 2001 with objective to provide investment opportunity that generates satisfaction long term growth and return. The price per unit of ASD is RM 1.00 and the fund size is RM 4.5 billion units. The maximum investment of Amanah Saham Didik is unlimited but subject to the availability units of the fund (ASNB, 2011).

Table 10.0

Amanah Saham Didik (ASD) Fund Performance

Year End 30 June

2008

2009

2010

Net Distribution per unit (sen)

7.00

6.30

6.35

(Source: Amanah Saham Didik annual report, 2010)

2.7.1.8 Amanah Saham Wawasan 2020 (ASW 2020)

Amanah Saham Wawasan 2020 is an income fund in equity category. It is introduced on 28 August 1996 with fund size RM 14.00 billion units. Amanah Saham Wawasan 2020 tries to furnish satisfaction level of customary distribution income to unit holders from investments. ASW 2020 is offer to all Malaysian who age from 6 months old and above which separate into account Adult and Account Teenager. The price per unit of ASW 2020 is fix on RM 1.00 and the maximum investment units of Amanah Saham Wawasan 2020 is unlimited but subject to the availability units of the fund (ASNB, 2011).

Table 11.0

Amanah Saham Wawasan 2020 (ASW 2020) Fund performance

Year End 31 August

2008

2009

2010

Net Distribution per unit (sen)

7.00

6.30

6.35

(Source: Amanah Saham Wawasan 2020 annual report, 2010)

2.7.1.9 Amanah Saham 1Malaysia (AS 1Malaysia)

Amanah Saham 1Malaysia is introduced by the current Malaysia Prime Minister, Dato Seri Najib Tun Abdul Razak on 31 July 2009 consistent with the idea that comes out from him which is “One Malaysia, People First and Performance Now”. Amanah Saham 1Malaysia is an income fund in equity category. Amanah Saham 1Malaysia seeks to provide consistent income stream while protected the unit holders’ investment capital through a diversification investment portfolio. This fund is offer to all Malaysian who age 18 years old and above. The price per unit is fixed on RM 1.00 with fund size RM 10.0 billion units. The maximum investment units are unlimited but subject to the availability of units of the Fund (ASNB, 2011).

Table 12.0

Amanah Saham 1Malaysia (AS 1Malaysia) Fund Performance

Year End 30 September

2010

Net Distribution per unit (sen)

6.38

(Source: Amanah Saham 1Malaysia annual report, 2010)

Tax Benefits from Unit Trust

Based on the Jennifer Chang and Azura Othman’s study, the unit trust funds manager will manage the investors’ money and investing based on the strategy and objectives of the unit trust fund. The return from the unit trust fund investment activities will give back to investors through distributions of the funds. The unit trust funds diversification allows the investors select the suitable unit trust funds to suit their own investment profile and objective. In Jennifer Chang and Azura Othman’s study, one of the factors that will affect an investment decision is the tax benefits on the investment (Jennifer Change et al, 2011).

Besides that, the unit trust investors are preferred that the tax benefits of their investments would not be drawback. The unit trust investors are willing to maximize their returns by investing in such unit trust investment products which may provide benefits to them as far as tax benefits is affected (Jennifer Change et al, 2011).

The main point in Jennifer Chang and Azura Othman’s study is about the unit trust tax benefits. Taxation of unit trusts investment is control under the law in Section 61 of The Income Tax Act (1967). The profits gain from the unit trusts investment is assessed and charged to tax segregate from the income of the unit holders. The income gain from unit trusts investment included of dividends, return on bonds and gain from sale of the investments. Based on the law, the gains on the unit trust investment from investors will not be charge to income tax. However, if the investment refers to the real properties and gains on release of such investments will be subject to real property gains tax at rates ranging from 5 percent to 30 percent which depends on the period of the ownership.

Malaysia government is try to promote unit trust investments especially government sponsored unit trust investment. Due to this, most of the income gain from the unit trusts investment will be excuse from income tax as well. Moreover, any interest and discount obtain by the unit trust investment guaranteed by the government or debentures approved by the Securities Commission are free from income tax (Jennifer Change et al, 2011).

Risks and Return on Unit Trust Investment

The price of the unit trust fund investments will change from day to day based on the market performance which will be able to influence the value of the unit trust funds. Investors can group the unit trust investment risks into two groups which are general risk and investment risk. General risks included management company risk, liquidity risk, results not guaranteed, loan financing risk, risk of non compliance and inflation risk. While the investment risks included interest rate ris