Can Bond Fund get 13.4% Annualized Return a Year? – AMB Income Trust Fund (AMBITF)

Recently there’s people talking about AMB Income Trust Fund (AMBITF) getting an annualized return of 13.4%. As we all know, bond fund is usually lower risk with lower return. But an annualized return of 13.4% is almost as good as the performance of equity fund. So the question is
Is it possible?  
Before explaining, let’s have a look at the fund itself. 
AMBITF – source from iFAST
From a scale of 0 to 10, AMBITF belongs to the lower risk of 1, which under the Asset Class of Fixed Income. According to the risk rating, “1-Lower Risk” means fund that invest mainly in Malaysia bonds with limited foreign currency exposure are exposed to interest rate risk. 
So is it possible to get annualized return of 13.4%?
AMBITF – source from iFAST
Yes, AMBITF could get it! In fact, if you look at the total return for each particular, surprisingly most of them are above 10%
But, the next question we should ask is why?
Things happen for a reason and we should always find out why, especially when it is too good to be true. Of course, in this case, it is true! But let’s see why! 
AMBITF – source from iFAST
Above is the comparison with some other Fixed Income funds.
Risk Rating 1 : AMBITF, AmIncome Plus, KAF Enhanced Bond Fund
Risk Rating 2 : Eastspring Investments Bond Fund, AMB Dana Arif Class A-MYR, KAF Bond Fund
Looking at the graph, you would noticed that AMBITF climb the highest with a few surges, while all the other fixed income funds are climbing at almost the same pace with some doing slightly better. This is where we should begin to be suspicious! So here it is why!
AMBITF Annual Report
If you from read from the annual report, you would noticed that the high return of AMBITF actually contributed by the recovery of defaulted quoted fixed income securities. Tracked back to previous year annual report, AMBITF is actively engage with the defaulted issuers, namely, Kerisma Berhad, Intelbest Berhad, Tracoma Berhad and Ace Polymer Sdn. Bhd. 
How long can it last? 
Again, after finding out the reason, of course we would want to know how long the write-backs would last or can the high return maintain and continue for a few years? From the annual report, the AMBITF management team stated that they will continue to engage actively with the defaulted issuers and take necessary actions, in order to improve the recovery of the defaulted bond. Unfortunately, recovery of defaulted bonds are usually not guaranteed and the recovery rate is not certain as well. So we might not know how long it could last. 
Lesson #1: Always find out the reason! 
Lesson #2: Always know what you are buying!
Lesson #3: Always know the risk that you are involve in! 
#yourfinancedoctor is just a sharing and doesn’t indicate if buy or not to buy a particular fund. 
Till then. 😉
Earn, Save, Invest, Repeat!

UK employment at record high

UK unemployment at 7 year low
A quick 45 second update on what’s going down in the Old Dart.
The latest round of employment data from the UK Office for National Statistics (ONS) showed employment continuing its uptrend, at 31.1 million, a record high.

The unemployment rate is now 5.5 per cent, the lowest level seen since 2008.

And the number of unemployed person just keeps on falling, down by a further 43,000 to 1.81 million. 

A good set of numbers again.
Employment rates are pushing record highs, and actually are at record highs for women.

Wages grew by 2.7 per cent both including and excluding bonuses, which is the best result since August 2011 (inflation is running at close to zip, so in real terms these are very much decent wage price gains).

UK housing market

The UK housing market has long since rebounded from its post-financial crisis malaise in most regions, but it has been very much a two-speed recovery with London and the South East of England driving the bulk of the recovery.
The rate of gains had really begun to accelerate through to 2014, with London in particular recording some monster gains between March 2013 and August 2014.
With fears of a nascent property bubble rising, regulators effectively “gummed up” the market with the Mortgage Market Review (MMR), which entailed a series of stalling and box-ticking measures.
It certainly had the desired effect.
Prices in England are up by 4.5 per cent since a year ago on the ONS index, which represents a material slowdown in price gains.

London prices have seen a slowdown on this index too, slowing from an annual growth rate of 11.2 per cent in March to just 4.3 per cent in the year to May 2015.

Mortgage approvals rebound post MMR
Ostensibly the housing market appears to have slowed quite sharply.
However, it is worth remembering that there are still loan products out there which allow some borrowers to grab money at a rate of under 2 per cent – there is even a two year fixed rate product on the market at a ridiculously cheap 1.07 per cent since the end of May!
Meanwhile, unemployment is at a seven year low, employment is surging to record highs, and there is a looming chronic housing shortage in the South East of England, where prices are up 7.2 per cent year-on-year.
More significantly, the latest round of mortgage data from the Bank of England revealed £11.1 billion of mortgage finance written in April 2015, with some 68,087 loans approved. 
This is the strongest monthly jump we have seen in more than six years and the greatest number of loan approvals since February 2014, so calls of a housing market correction seem likely to be premature.
In short, the impact of the MMR is now receding into the rear view mirror, and with the election uncertainty now also out of the way borrowers are likely to take advantage of some of the cheapest loan rates in UK history.

Eight Facts About Filing Status

The first step to filing your federal income tax return is to determine which filing status to use. Your filing status is used to determine your filing requirements, standard deduction, eligibility for certain credits and deductions, and your correct tax. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child.

Here are eight facts about the five filing status options the IRS wants you to know so that you can choose the best option for your situation.

  1. Your marital status on the last day of the year determines your marital status for the entire year.
  2. If more than one filing status applies to you, choose the one that gives you the lowest tax obligation.
  3. Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law.
  4. A married couple may file a joint return together. The couple’s filing status would be Married Filing Jointly.
  5. If your spouse died during the year and you did not remarry during 2010, usually you may still file a joint return with that spouse for the year of death.
  6. A married couple may elect to file their returns separately. Each person’s filing status would generally be Married Filing Separately.
  7. Head of Household generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.
  8. You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2008 or 2009, you have a dependent child and you meet certain other conditions.

There’s much more information about determining your filing status in IRS Publication 501, Exemptions, Standard Deduction, and Filing Information. Publication 501 is available at or by calling 800-TAX-FORM (800-829-3676). You can also use the Interactive Tax Assistant on the IRS website to determine your filing status. The ITA tool is a tax law resource on the IRS website that takes you through a series of questions and provides you with responses to tax law questions.

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Employment surges, but Iron Triangle "wiped off the map"

Employment jumps
Both good and bad news for jobs growth today.
The Labour Force figures were released this morning and they showed total employment jumping by a better than expected +2.0 per cent in the year to May 2015.
This was a considerably better than expected result, and Aussie share markets closed up by more than 1.4 per cent.

Let’s take a look at the employment figures in the usual 3 short parts…

Part 1 – Employment up

Total employment increased by a surprisingly strong +42,000 to a new survey high of 11,759,600.

Over the past seven months total employment has surged higher by +196,000, an impressive average of more than 28,000 per month.

The May result was comprised of +14,700 full time jobs, and +27,300 part time jobs.

So, a jolly good data print, all things considered.

Part 2 – State versus state

The May result was predominantly driven by a rebound in employment from previously weaker months in Queensland (+18,700), and an ongoing surge in New South Wales jobs (+15,300).

Over the past year employment growth has been driven overwhelmingly by New South Wales with a super-strong (+87,600), and Victoria with a similarly strong (+84,700).
On the flip side, the southern states are really struggling to gain any traction at all.
Tasmania has not created any employment growth on a net basis for fully half a decade, while South Australia has not added a single job since Virgin Australia was still Virgin Blue, all the way back in the first half of 2011.

Iron triangle “wiped off the map”
In March 2013 I spent oodles of time detailing in characteristically tedious fashion why real estate speculation in South Australia’s so-termed “iron triangle” (Port Augusta, Whyalla and Port Pirie) was bad idea, despite the repeated recommendations of other commentators, concluding in the final paragraph the potential for “severe financial loss”.
If you are so inclined, you can track back and find other similarly themed posts on this blog page dating from the first quarter of 2013.
Of course, nobody is really that interested in listening to such musings and warnings when mining investment is still on the way up, but now we are coming down the other side, things could get very messy.
Such is the nature of commodity cycles.
Median house prices in Whyalla have now declined by 9 per cent in the last 12 months to be lower than they were five years ago, with further adverse news in the post.
The median house price in Port Augusta is now a paltry $168,000 having declined horribly by 16 per cent over the past five years – a disastrous result – while unit prices have been crushed, down by a horrific 43 per cent to $117,500 over the same time period.
And over the past three years, the median house price in Port Pirie has dropped 11 per cent lower to just $187,500, despite a moderate recent bounce having been reported.

The last three years have been grim enough, but there is more sobering news in the post over the next three years, with it being announced today that Port Augusta’s two power stations and the Leigh Creek coal mine are expected to close by 2018.

This will cost another devastating 438 jobs, a terrible outcome for the local economy. 
Coming in addition to a swathe of cancelled projects, it’s been a miserable time for much of the region.

Part 3 – Unemployment

Finally for today, moving on to unemployment, it was great to see the seasonally adjusted national unemployment rate declining to 6.0 per cent in May, while unemployment decreased by 22,000 to 745,200.

6 per cent is a 12 month low for the seasonally adjusted unemployment rate. ticking back from 6.3 per cent in January.

Even before today’s closure announcements, at the state level South Australia already had by a wide margin the highest unemployment rate at 7.6 per cent.
In New South Wales, the unemployment rate declined to 5.9 per cent, which merely underscores the strength of Sydney’s economy given the elevated levels of unemployment in Newcastle and the Hunter (also related to coal industry woes).
Queenslanders were heartened today to see the Sunshine State unemployment rate decline from 6.6 per cent to 6.3 per cent in May.
I’m not sure what’s happening with Western Australia, but the decline to 5.1 per cent just “feels” wrong (and the ABS essentially acknowledged as much in its release notes).

Smoothing the data on a 6mMA basis, we can see that Western Australia is still in an unemployment rate uptrend, despite today’s low-ball result.
The outlook has improved significantly for Tasmania as the Aussie dollar has declined, but South Australia’s economy continues to be in a real muddle.

Elizabeth in Adelaide is ground zero for capital city unemployment in Australia as the car manufacturing industry shuts up shop, but now we can add the disintegration of the “iron triangle” to the long list of challenges facing the state.

The wrap
Overall, this was a very worthy headline set of numbers with another 42,000 jobs added, which suggests that low interest rates are to some extent leading to stronger employment growth, although perhaps jobs of the lower paying variety.
However, drilling down to the regional level we can clearly see that there is likely to be some blood on the streets, particularly in many of the resources focussed regions.

Record visitors to Australia (Asian century)

Record visitors
The ABS has been playing catch-up on its Overseas Arrivals and Departures stats, releasing three months worth of data almost in as many weeks.
The February figures revealed an enormous 602,800 short term arrivals into Australia in February, comfortably the greatest figure we have ever seen on this survey.
And note that February is the shortest month of the year at only 28 days, if I recall my childhood mnemonics correctly.
Also note that these are the seasonally adjusted figures – the “original” data revealed that there were more than 807,000 visitors to Australia in the month December alone!
Over the last 12 months we have seen some 6.95 million visitors to these shore – also a record – as the lower dollar drives the tourism sector into robust growth territory.

China drives short term arrivals
If you’ve been following this blog over the past year or so you’ll know I’ve been suggesting that the number of Chinese visitors into Australia must surely be growing exponentially (unless my eyes aren’t working properly).
The February data confirmed as much, with an extraordinary 86,600 Chinese visitors in only one month, smashing all previous monthly records by nearly 10,000.
Over the past year there have now been 873,500 Chinese short term visitors to Australia, an annualised figure which appears to be heading to above 1 million in due course.

At the current rate of progress Chinese short term arrivals will have overtaken Kiwis as the number one country within only a couple of years.

There were also a record 559,400 US visitors over the past year, the Americans very much enjoying the shift in foreign exchange rates no doubt.
Of the 7 million or so short term arrivals, 5.16 million came for holidays or to visit family – others came for business, conferences, employment, education or other pursuits.

Population growth to rebound

On a rolling annual basis net long term migration has declined from a recent peak of 411,160 in January 2013 to 304,690 in February 2015.
While this rolling annual downturn may have a little way to run yet, the most recent two months of data point to a very healthy rebound.
In the first two months of the year we have seen 156,610 permanent and long term arrivals but only 72,220 such departures, thereby implying an annual pace of net long term migration which is set to bounce very strongly.

Asian century for Oz
No chart better illustrates the accelerating changes in Australia’s demographics than the one below.
Only 650 Poms came to settle in Australia in February, way down from the heady monthly peak of 2,490 in October 2008, the currency having played a significant role here too.
On the other hand February saw 1,870 Indian settlers and some 1,910 Chinese. Big, big numbers.

Finally, over the past year while the number of settlers from Oceania has declined to only 21,350 and Europeans to 15,190, Asian settlers have consolidated at a rolling annual figure of 71,500, accounting for by far and away the greatest share of immigration Down Under.

2015 Income Tax Rate

Recently #yourfinancedoctor has heard some rumors regarding income tax for 2015, a lot of people are saying that “Income below RM5,000 is not tax liable under the Income Tax Rate 2015“. Are you one of them too? And most importantly, is that true?
2015 Income Tax Rate
How do They get the Magic Number – RM5,000?
Of course, as an analytical-thinker type of person, I would always ask why and how? And as usual, most of the people would answer me “because XXX said so” without even bother to find out the fact. But most surprisingly, some get the magic number from the 2015 Tax Rate table. From the table, they claimed that below RM5,000, the tax rate is zero!  
2015 Tax Rate Table – source from LHDN Website
Is that TRUE?
For a second, I thought I was wrong all these while! LOL! But after confirming with my Tax Guru – Luporti (if you need accountant can find him), fortunately, it is not true! The Chargeable Income in the table is counted annually, which means you still gotta take RM5,000 multiply by 12 months to get RM60,000. It is not their fault for misunderstanding the table. After all, who to blame when we didn’t get the right-proper education on personal finance, not in school, not in university, definitely not at work too!(except for those finance and accounting students) But hey! That’s why you need #yourfinancedoctor! 😉
So What’s the Right Number?
So here’s the right number for you. In my rough calculation, the tax relief will just consider those that will get for sure, which are personal relief (RM9,000) and EPF (max RM6,000). Here are two scenarios, namely single and married but spouse not working.
Maximum Income that is Not Tax Liable
Single = RM3,180 / monthly
For married but spouse not working scenario, the only differences are the additional of RM3,000 tax relief for spouse and RM400 tax rebate for spouse. 
Maximum Income that is Not Tax Liable
Married but Spouse not Working = RM4,210 / monthly

**p/s: rough estimation based on round number** 

Now you know what’s the minimum! So if your salary is higher than the scenario above, then you might want to consider some tax saving methods! Same as any other personal finance, it varies from one individual to another! But at the end of the day, all we want is just to Earn More, Spend Less, Invest More and Reach Goal Earlier! Too lazy to go handle it yourself? Contact #yourfinancedoctor! =p
Earn, Save, Invest, Repeat!
Till then. 😉

Most popular posts

Here is a list of the top five most popular posts on over the last week…and a bonus link to a posting that does not appear in the top five.

1. The most popular post of the last week was this macro selection which gave some thought on Greece, China and Australian house prices. Link here.

2. The second most popular post of the last week was my write up on Michael Kors where I try to work out if it is cheap or not.  Link here.

3. The third most popular post of the last week was another macro selection which covered Greece, IPOs, demographics and the euro/PPPs.  Link here.

4. The fourth most popular post of the last week was Monday’s wrap which touched upon British regional PMIs, the latest Ericsson Mobility Report and the DAX moves into correction zone… Link here.

5. The fifth most popular post of the last week was Tuesday’s wrap including thoughts on Visa, HSBC and sector performance in the US. Link here.

And a bonus link?  This week something different, a bonus advertisement: watch out later today for the latest Financial Orbit Speaks my enhanced podcast on global investment and related matters.

Ten Tips for Deducting Charitable Contributions

When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. If you made qualified donations last year, you may be able to take a tax deduction if you itemize on IRS Form 1040, Schedule A.
The IRS has put together the following 10 tips to help ensure your contributions pay off on your tax return.

  1. Contributions must be made to qualified organizations to be deductible. You cannot deduct contributions made to specific individuals, political organizations and candidates.
  2. You cannot deduct the value of your time or services. Nor can you deduct the cost of raffles, bingo or other games of chance.
  3. If your contributions entitle you to merchandise, goods or services, including admission to a charity ball, banquet, theatrical performance or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.
  4. Donations of stock or other property are usually valued at the fair market value of the property. Special rules apply to donation of vehicles.
  5. Clothing and household items donated must generally be in good used condition or better to be deductible.
  6. Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution. For donations by text message, a telephone bill will meet the record-keeping requirement if it shows the name of the organization receiving your donation, the date of the contribution, and the amount given.
  7. To claim a deduction for contributions of cash or property equaling $250 or more you must have a bank record, payroll deduction records or a written acknowledgment from the qualified organization showing the amount of the cash and a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift. One document may satisfy both the written communication requirement for monetary gifts and the written acknowledgement requirement for all contributions of $250 or more.
  8. If your total deduction for all noncash contributions for the year is over $500, you must complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return.
  9. Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which requires an appraisal by a qualified appraiser.
  10. To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A.

For more information on charitable contributions, refer to Form 8283 and its instructions, as well as Publication 526, Charitable Contributions. For information on determining value, refer to Publication 561, Determining the Value of Donated Property. These forms and publications are available at or by calling 800-TAX-FORM (800-829-3676).

  • Search for Charities or download Publication 78, Cumulative List of Organizations
  • Publication 526, Charitable Contributions (PDF 178K)
  • Publication 561, Determining the Value of Donated Property (PDF 101K)
  • Form 1040, U.S. Individual Income Tax Return (PDF 176K)
  • Schedule A, Itemized Deductions (PDF)
  • Form 8283, Noncash Charitable Contributions (PDF)
  • Instructions for Form 8283, Noncash Charitable Contributions (PDF)

YouTube Videos:
Charitable Contributions:  English  |  Spanish  |  ASL
Haiti Earthquake Donations:  English  |  Spanish  |  ASL 

This material is for informational purposes only and not intended and financial, legal or tax advice. Please consult your finance, legal or tax professional to confirm the accuracy of all information.  

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Business loans at hazina development trust

I have been covering mostly on interest accruing business and or personal loans for a while now but today I have decided to highlight something about interest free loans.What? Yes, I mean loans which will never attract interest.

If I say interest free loans it’s rarely supposed to be from the government but mostly always from Shariah compliant financial institutions which is the reason for this post.Here in Kenya, I know there are many big and established shariah compliant banks like Habib bank, Gulf African bank , First Community bank , Bank of India and many others which I will cover sometimes later but due to the nature of the people am dealing with (poor micro entrepreneurs),I will cover Micro-finance institutions starting with Hazina Development Trust for this post.

Hazina Development Trust was founded in the year 2011 by Mr Hassan an experienced financial consultant with its headquarters located at Takaungu, a small roadside town along Mombasa-Malindi highway. The sole goal of the initiative was to relieve the area residents of Takaungu (especially women and youths) of their longtime povertiness by providing consultancy in micro-enterprise and financial management.

Loan Facilities.
After noticing their positive impact in the community, Hazina Development Trust turned to a fully Micro-finance institution and started expanding it coverage along the coastal region reaching Mtwapa, Mombasa city and Likoni in South Coast. Being Shariah compliant all its credit facilities accrue no interest. You only share the profit and that is only if it grows above ksh5000.There are about four loan packages fully functional now.

Mkopo nibebe-This is the biashara start-up loan which is the most popular as it allows women or youths groups to put their first step into owning and running a business. The maximum amount one group can borrow is ksh15000 and there’s no collateral required.

Graduate biz loan- it’s called biashara Imara loan as it targets groups which have successful repaid their first loan .Individual members can borrow too.The maximum loan amount is ksh100000.

Hazina Hassanah credit- it’s a special kind of loan given to very poor members of the Hassanat division, a group receiving mentorship services at the Hazina Development trust.The credit facility is 100% interest free thus named 0% social development loan.

Joint investment partnership- Targets people with valid business dreams.It can be a group project or a merchant investment plan that you want support for.

Due to their closeness to the community, this trust developed other loan packages including; school fees loan,medical cover(afya bora loan) and festival loans which are yet to be full mature.

Thinking to reach them? You can just do that through the following contacts;

Formax Centre in Mombasa.
Cellphone; 0706247815/0713529199.
Email; or

Mtwapa- Misha Plaza.
Cellphone; 0706780066/0726296977

Takaungu Adjudication centre.
Cellphone; 0706780062/0723365409

Ramadhani Kinudi Building, Majengo Mapya- Likoni.
Cellphone; 0706780065/0724705549

Please share to friends or leave a comment. Thanks.

Five Ways to Obtain IRS Forms and Publications

The Internal Revenue Service has free tax forms and publications on a wide variety of topics. If you need IRS forms, here are five easy methods for getting the information you need.

  1. On the Internet You can access forms and publications on the IRS Web site 24 hours a day, seven days a week, at
  2. By Phone You can call 1-800-TAX-FORM (800-829-3676) Monday through Friday 7:00 am to 10:00 pm local time – except Alaska and Hawaii which are Pacific time – to order current year forms, instructions and publications as well as prior year forms and instructions. You should receive your order within 10 days.
  3. At Convenient Locations in Your Community During the tax filing season, many libraries and post offices offer free tax forms to taxpayers. Some libraries also have copies of commonly requested publications. Many large grocery stores, copy centers and office supply stores have forms you can photocopy or print from a CD.
  4. By Mail Order your tax forms and publications from the IRS National Distribution Center at 1201 N. Mitsubishi Motorway, Bloomington, IL, 61705-6613. You should receive your products 10 days after receipt of your order.
  5. Taxpayer Assistance Centers There are 401 TACs across the country where IRS offers face-to-face assistance to taxpayers, and where taxpayers can pick up many IRS forms and publications. Visit and go to Contact My Local Office on the Individuals page to find a list of TAC locations by state. On the Contact My Local Office page, you can also select TAC Site Search and enter your zip code to find the IRS walk-in office nearest you as well as a list of the services available at specific offices.


  • Publication 910, Guide to Free Tax Services (PDF 636K)
  • Publication 2053A, Quick and Easy Access to IRS Tax Help and Forms (PDF 40K)
  • Order Publication 1796, Federal Tax Products on CD-ROM, from NTIS — the National Technical Information Service.
  • State tax forms
This material is for informational purposes only and not intended and financial, legal or tax advice. Please consult your finance, legal or tax professional to confirm the accuracy of all information.  

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