Dr Chong Yoon Sin, a Consultant Cardiologist at ParkCity Medical Centre highlights the effects of heart disease and the importance of its prevention.
Heart disease has long been acknowledged as a silent killer in Malaysia, affecting a large number of the population each year. According to the Department of Statistics Malaysia, heart disease is the main cause of death among Malaysians and has remained so for the past fifteen years. In 2019, 16,325 victims of heart attack made up 15 per cent of medically certified deaths. Furthermore, the onset age for heart disease has also alarmingly lowered in recent years, with the disease being the leading cause of death for people aged between 15 and 64 years old.
Although there are many ways in recent years to catch heart disease quickly and ample treatment options available for patients, the adage “prevention is better than cure” holds true for the disease.
Understanding Heart Disease
Ischemic heart disease, also called coronary heart disease (CHD) or coronary artery disease (CAD), is the term given to heart problems caused by narrowed coronary arteries that supply blood to the heart muscle. A heart attack, or myocardial infarction, occurs when the blood supply to part of the heart muscle is severely reduced or stopped. This occurs when one of the coronary arteries is blocked by an obstruction, such as a blood clot that has formed on plaque due to atherosclerosis.
Dr Chong Yoon Sin
When the blood supply is cut off drastically or for a long time, the heart’s muscle cells suffer irreversible injury and die, causing disability or death to the patient depending on how much of the heart muscle is damaged.
“Sometimes, a coronary artery also temporarily contracts and goes into spasm, causing it to narrow and decrease or stop the blood flow to part of the heart muscle. The spasm can occur in blood vessels blocked by atherosclerosis or regular blood vessel, and when severe causes heart attack,” says Dr Chong.
Effects of Heart Disease
It is important to know the warning signs of a heart attack: chest pain, breathing difficulty, profuse sweating, giddiness, epigastric pain, and loss of consciousness. If you notice yourself or someone around you experience these symptoms, it is important to immediately rush to the hospital for treatment.
“Upon treatment, recovering after a cardiac arrest is a process that requires patients to be committed to avoid a repeat of the incident. Most of the time, after a heart attack, there will be some degree of muscle damage. If the damage sustained by the heart is small, patients will be able to return to an almost normal life except for a stricter diet and medication. However, if the damage is significant, the heart will be weak, causing patients unable to exert themselves as much as they were able to before. Other effects even include breathlessness and inability to drink a lot of water immediately,” explains Dr Chong.
Preventing Heart Disease
In Malaysia, heart disease is proven to be caused by the sedentary lifestyle led by a large portion of the population. In addition, Malaysians are also prone to various heart disease risk factors, such as smoking, obesity, hypertension, diabetes, and high cholesterol.
Many scientific studies show that certain characteristics increase the risk of coronary heart disease, with the four major modifiable risk factors being smoking, high blood cholesterol, high blood pressure and physical inactivity. It is crucial that people control their modifiable risk factors to keep heart disease at bay. Furthermore, if you experience chest pain continuously even if you practise a healthy lifestyle, it is vital that you pay a visit to the doctor.
“Nowadays we’re seeing patients in their 30s with heart disease due to their lifestyle practices. That’s why I always emphasise on the importance of early detection by going for screenings especially if you have lifestyle or genetic risk factors. It is also important to lead a healthy lifestyle by always exercising at least 30 minutes every day, not smoking, practising a healthier diet by eating more vegetables, fruits, lean meat, fish, beans and so on. Also, cut down on high-fat food, always stay hydrated, and manage your stress better. Once you practise a healthy lifestyle and go for screenings consistently, you will be fine,” assures Dr Chong.
Would you trust artificial intelligence toinvest your hard-earned cash for you?
Robo-advisors are fast gaining popularity in Malaysia, and while the concept of digital wealth management platforms have been around since 2008, it has taken much longer for such services to reach our shores.
StashAway was the first robo-advisor to enter Malaysia in 2018, a year after it first launched in Singapore. Today, there are seven robo-advisors or digital investment managers (DIM) recognised by the Securities Commission Malaysia, suggesting that the industry is beginning to mature and grow exponentially. So what fuelled this sudden growth and how does it bode for the future of retail investors?
A Time-Saving Option For Investors
Contrary to a lot of investment products which tend to champion the rate of return, one of the main selling points of robo-advisors is the time that can be saved by using their services. The typical image of a full-time investor can often be one of multiple screens set up in a room, with hours spent analysing graphs and charts. In short, it is essentially a full-time job, especially for the most successful investors.
“To build a case for investing, an individual would need time to learn the in’s and out’s of investing, which can be overwhelming for certain individuals,” says Wong Wai Ken, country manager, Malaysia of StashAway.
“Robo-advisors offer individuals an alternative to this, as they are able to offer guidance to picking the right portfolio whilst charging much lower fees compared to traditional unit trusts. It is also a convenient manner to invest, as it gives investors a platform to get exposure to global markets.”
With such convenience at investors’ fingertips, it appeals greatly to individuals that are keen to save time and have disposable income that they can invest, a notion that is backed by the demographics.
“Our main demographic are white collar professionals in the financial services, tech, consulting, and oil and gas sectors,” shares Wong.
“64% of our customers are the main financial decision-makers of their household, while 43% are male and 57% are female. The range of our demographic varies however, as StashAway is built for those focused on building long-term wealth.”
And while a time-saving investment product may be thought of as appealing to the younger generation who are more tech savvy, it seems that seasoned working professionals are also coming round to the idea of alternative investments and are willing to explore. The time they save by leaving investing to algorithms can then be utilised elsewhere, be it into their careers, families or personal goals.
Emotion-Free Investing
One of the key tenets of robo-advisors is that it is not swayed by emotion, unlike humans who are often influenced by market movements in either direction. Regardless of market sentiment, the AI simple executes buy and sell orders as determined by its risk algorithms, which can provide peace of mind for more passive investors.
The links between mental health and physical health are very deeply intertwined, and there are significant overlaps between these chronic conditions.
Smart Investor sat with Azran Osman-Rani. ” As an entrepreneur, CEO and Ironman triathlete, many only see my public persona of strength, resilience and energetic enthusiasm to embrace life’s challenges and opportunities. Hardly anyone knows about the recurring anxiety attacks and chronic stress that can leave me either bed-ridden or feeling disengaged and withdrawn.”
Many do not understand that mental health is just like physical health. Some days we feel physically strong, and other days we become sick – either from an infection that may heal in a few days, or when we are struck with a lifelong or life-threatening disease.
This can either be from a genetic or inherited condition, or even from being unhealthy from our own lifestyle choices like getting diabetes or hypertension because of poor diet, lack of exercise, smoking and stress.
Mental health also exists on a spectrum. There’s positive mental wellbeing – when someone is optimistic and curious, focused and resilient, and socially connected. On the other hand, feeling depressed, anxious and stressed is completely normal.
Most of us can self-regulate and feel better after a few days, but others suffer from clinical levels of depression and anxiety because the triggers that lead to these feelings are either prolonged or so intense that the body can no longer return to normal. It is similar to diabetes where consuming a lot of sugar can cause our blood glucose to spike. If it is only occasionally, for example, having a slice of chocolate cake, the body’s insulin hormones normalise blood glucose.
However, prolonged and excessive sugar consumption impairs the ability of insulin hormones to regulate glucose and that leads to diabetes. Over time as diabetes progresses, it can cause kidney failure, blindness and even death. Similarly, other hormones control our mental and emotional state, like serotonin and oxytocin. Prolonged stress and pressure, or even intense trauma, can interfere with the functioning of these hormones, causing clinical disorders.
Other mental health conditions can be brought about by genetic and biological factors, leading to illnesses like psychosis, schizophrenia or bipolar disorders, just like auto-immune diseases or cancer which affect our physical heath.
The links between mental and physical health are very deeply intertwined, and there are significant overlaps between these chronic conditions. This can be seen, for example, in the relationship between diabetes and depression, or anxiety and heart diseases.
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With the rise of self-employed entrepreneurs, here are some tax compliance obligations and common oversights.
There has been a dramatic growth in recent years on the number of self-employed entrepreneurs in Malaysia. From 2017 to 2018 alone, this number increased from 2.57 million to 2.86 million, an increase of 11.3% (source: Department of Statistics, Malaysia). In 2018, the self-employed are the second largest category (19.3%) in the Malaysian workforce out of a total of 14.8 million working adults.
Malaysia adopts a self-assessment system where taxpayers are responsible to determine their own tax liability and to submit their tax returns accordingly. As the number of self-employed entrepreneurs continues to grow in the Covid-19 economy, it is important for the self-employed to be aware of one’s tax obligations especially in the area of tax compliance. Failure to do so could result in penalties and additional tax payable.
A self-employed person is an independent contractor or a sole proprietor. The self-employed consists of sub-contractors working in the trades or construction sectors to professionals such as doctors, lawyers, accountants, engineers, and management consultants. Recent iterations include freelancers working in the commonly named “gig economy” (such as e-hailing drivers).
Here are some tax compliance obligations a self-employed individual should take note of:
1. Registration of Tax Identification Number (TIN) and submission of tax return
A self-employed individual should register for a TIN when the person has taxable income which exceeds a threshold of approximately RM28,000 per annum. A TIN can be registered at the nearest Inland Revenue Branch (IRB) branch or via e-Daftar at the IRB website.
For entrepreneurs running a business, the income tax return (Form B) will need to be submitted by 30 June the following year (eg. Form B for the year of assessment 2020 is due by 30 June 2021*extended to 30 September 2021 due to Government movement control, IRB website)
2. Estimate of Tax Payable
Under the Malaysian tax regime, a taxpayer pays income taxes on a “Pay-As-You-Earn” basis. Where an individual taxpayer receives other than employment income, the IRB may issue a Form CP500 setting out the estimate of tax payable under an instalment scheme. The Form CP500 is determined based on the tax liability of the previous year. What should you take note of:
The tax estimate is six (6) bi-monthly instalments commencing from the month of March every year.
Each tax instalment payment needs to be made within 30 days from the due date.
The remittance slip (Form CP501) should be submitted together with the instalment payment.
Should there be a need to revise the tax estimate which affects the instalment amount, you must submit Form CP502 to the IRB not later than 30 June each year on the revision payments. The IRB will issue a Form CP503 if the application is successful.
The penalty for late payment of 10% shall be imposed on the unpaid amount if the tax instalment payment has not been paid within 30 days from the due date.
Where there is a difference between the revised tax estimate submitted and the final tax liability which exceeds 30% of the tax payable, the difference will be subject to a penalty of 10%.
The following illustration shows the impact when an estimate of tax payable is inaccurate.
3.Employer’s Responsibilities
As an entrepreneur, you might hire employees to expand your business. In this case, you will be considered as an Employer for tax purposes. The responsibilities of an Employer are as follows:
The Employer is to inform IRB of any new employees within one month from the date of commencement of employment.
Submission of Return of Remuneration by an Employer (Form E) to the IRB on or before 31 March each year. <continues…>
Schroders identifies eight themes that could transform the world, but how are these being affected by the coronavirus?
At the core of thematic investing at Schroders is the belief that the most powerful and persistent investment themes are those where human ingenuity ignites innovation to address imbalances in the world. These imbalances may be between populations and resources, or between supply and demand in individual industries.
As we all know, necessity is the mother of invention. As coronavirus throws the whole world into turmoil, humanity’s ingenuity and powers of innovation are being mobilised to fight the disease, care for our populations and adapt our work and home lives to a new set of economic, political and social realities.
Covid-19 is exacerbating existing tensions between populations and finite resources and dislocating supply and demand relationships in countless industries. Bearing this is mind, we examine the impact of this crisis on the eight investment themes that we think have the potential to transform the world we live in:
1.HEALTHCARE INNOVATION
“Crisis highlights importance of healthcare innovation”
This pandemic underscores the critical societal importance of healthcare innovation as countries seek to prevent and cure disease while wrestling with ongoing demographic and budgetary challenges. Central to our investment thinking in this area is the belief that science and technology will be crucial as companies harness data, computing power and medical knowledge to meet these goals.
We believe this will drive further breakthroughs in advanced therapies, medical technology, and healthcare services as well as in digital healthcare where technology in the form of ‘telehealth’ has shown its worth during this crisis as a means of making healthcare provision more responsive and efficient. As governments realise their vulnerability to pandemics, the drive to spend more on healthcare in the future can only intensify.
2.SMART MANUFACTURING
“Smart manufacturing essential as demandfluctuates”
Amid the acute demand and supply shock experienced by the global economy, manufacturers are also having to innovate. We expect to see companies developing local supply lines alongside their existing global networks while investment in data analytics will be imperative as a means of understanding and managing volatile demand and disrupted procurement in the future.
Investment will also take place in other smart manufacturing themes, including advanced manufacturing such as 3D printing, automation in the shape of robotics, sensors and controls, and advanced materials like lightweight composites as companies harness exciting innovations in hardware, software and materials to deliver greater agility.
While manufacturers face undoubted short-term headwinds, the disruption caused by Covid-19 demonstrates the importance of manufacturing innovation to ensure responsiveness and productivity in both good times and bad
3.CHANGING LIFESTYLE
“E-commerce and well- being are growing lifestyle trends”
What you should look out for and how to not fallfor these malicious schemes.
The economic impact brought on by Covid-19 has led many people into financial distress.
Those looking for quick gains could easily fall into investment schemes that take advantage of their desperation and fears. Some of the victims might use all of their life savings or even obtain bank loans to participate in such schemes.
For the perpetrators, their goal is simple: profit from the plight of their victims. While the stealing of private information and hard-earned savings are not new, such investment schemes are regularly updated and amended so as to portray a look and feel of legitimacy.
People should educate themselves about the investments they are considering. Perhaps, start with being mindful about content and marketing scams. Here are some useful tips that help with identifying new scammer methods:
TREND #1: MARKETING GURU SCAMS[…]
TREND #2: CRYPTOCURRENCY SCAMS[…]
TREND #3: VIRAL FAKE NEWS THAT CAN PHISH AND USE BEHAVIOURAL TRACKING[…]
Homegrown e-commerce platform PGMall aims to compete with the big boys with its long-term growth strategy.
Being part of the booming e-commerce industry, PGMall is the fastest growing e-commerce platform in Malaysia.
However, this entirely homegrown operation has quickly established itself as one of Malaysia’s leading marketplaces and has big plans for expansion.
We sat down with Jerry Ng, the chief operating officer of PGMall as he outlines his vision.
Smart Investor: You studied physics for your degree and scientific computing for your Master’s, both in the UK. How did you find the transition from such contrasting industries to e-commerce?
Jerry Ng: Yes, I had a passion for physics and computing while I was pursuing my studies. After completing my studies, I secured a job in the UK as a software developer. This was definitely an extension of my passion in computing and I really enjoyed the experience.
And to be honest, I found that this transition over to e-commerce was not that big a jump. This is because whatever you need to do in the e-commerce industry, you need that technological understanding. This includes the operational side on the backend, as well as how to scale a marketplace platform from small volume of consumers, sellers and transactions to a much higher volume.
For me, my experience working as a software developer meant that I gained valuable technical knowledge while working on similar websites and companies. I believe this knowledge will help me guide PGMall in the coming years to the next level as we aim to transform into a highly scalable and cross-national entity.
SI: When talking about e-commerce, there are many other companies in the market. So what sets PGMall apart from these other marketplaces in Malaysia?
JN: The biggest thing that sets us apart is that PGMall is a fully, locally owned and operated company in contrast with the other two companies which have ties to China and Singapore. We are very proud to say that right now we are the number one local e-commerce player in Malaysia.
All things considered, we are doing well against our competitors considering that we are the third largest platform in Malaysia. We are delighted that we have managed to achieve significant growth over the past few years, alongside the explosive growth of the e-commerce market. We are also confident about our business model as our customer base is stickier than that of other platforms. This is because we reward our customers based on their behaviour; anytime they buy or spend on our platform, we will reward them accordingly.
If you’ve done your research on how to invest in Malaysia, there’s a good chance that you’ve come across the usual investment products such as unit trusts, the stock market, investment properties and other well-championed financial tools.
You may also have heard of the term REIT before, but it’s definitely not as popular as the other products. There’s a good chance you’ve had a relative or friend recommend hot stocks to you or recommend properties to invest in. But have you had the same people recommending Malaysian REITs to you? So what exactly does REIT stand for and what is this product that isn’t very well-known to the general public?
What is a REIT?
REIT stands for real estate investment trust and is a form of financial product that allows investors to get exposure to the real estate market. When it comes to investing in real estate, most people think of purchasing property to rent out to others, but real estate investment trusts offer many of the same benefits with less of the hassle.
You simply purchase shares in the REIT and leave the headaches of rental negotiation and collection, tenant sourcing, and property maintenance to the professionals, while collecting dividends a few times a year!
In fact, the average dividend distribution rate for some REITs even outpaces the rental yield of the average residential property, making it hard to argue against investing in REITs as opposed to purchasing your own property.
Fancy owning property in Kuala Lumpur without the hassle? REITs may be the answer.
For some individuals, they may even prefer investing in REITs as there’s no need to monitor the stock exchange news, revenue growth of companies and other time-consuming research. At most, they’ll just have to read the quarterly or annual reports published by the REITs about the current performance and yields.
There are currently 17 REITs listed on Bursa Malaysia for investors to buy shares in. REITs are considered a good investment for beginner investors as the initial entry price is low and dividends are consistently paid out at regular intervals. This also makes it a good defensive investment to hold in times of uncertainty.
For example, let’s say a REIT is selling at a share price of RM0.53. This means you just need RM53 to start investing. However, a more expensive REIT may cost much more, with some even priced above RM6 per share. This means investors need at least RM600 to start investing in those premium REITs.
So Which is the Best REIT in Malaysia?
If we could tell you, we’d all be rich investors! There’s no hard and fast rule to determine which is the best REIT as it depends on what you’re looking for when investing, just like when doing research on the stock market. If you have a higher risk tolerance, you may want to focus on a REIT that is less diversified (eg. retail only) but if you prefer steady dividends, you may want to invest in a REIT spread across several industries.
Here’s a quick and complete guide to the top 10 REITs in Malaysia to help you learn more about what’s available in the market:
Unlike many other REITs, the KLCC REIT only has three properties in its portfolio but these are enough to make it the largest REIT in Malaysia based on market capitalisation. It includes the PETRONAS Twin Towers, Menara 3 PETRONAS and Menara ExxonMobil, all of which have a 100% office occupancy rate as of the end of 2020. The only exception is the retail section of Menara 3 PETRONAS, which has a still healthy occupancy rate of 93%.
Another point to note is that it’s the most expensive REIT to own by far based on the prices on Bursa Malaysia. This can be attributed to its stable dividends and occupancy rates, making it an attractive option for investors on the lookout for REITs to invest in.
Notable properties: Mid Valley Megamall, The Gardens Mall
One of the most popular Malaysian REITs around, the IGB REIT is made up of only two shopping malls in its portfolio. However, these two malls are Mid Valley Megamall and The Gardens Mall in Kuala Lumpur, two of the most renowned shopping centres in Malaysia.
According to its latest annual report, the occupancy rate of Mid Valley Megamall stands at 99% while The Gardens Mall is at 92%. To maintain such numbers throughout the Covid-19 pandemic is impressive, but it remains to be seen if it can maintain this with the numerous Movement Control Orders that have been implemented.
Notable properties: Sunway Pyramid Mall, Sunway Medical Centre, Sunway Putra Mall, Sunway University
Another of the highly popular Malaysian REITs, it comprises of properties under the Sunway Group in a variety of industries, including retail, hospitality, corporate offices and education. Its retail and office properties currently boast a healthy occupancy rate despite the pandemic, but unsurprisingly the hospitality properties are currently struggling with travel not allowed under the Movement Control Order.
The diversity of the Sunway REIT could prove a crucial factor for potential investors, and could be a key mitigator against restrictions brought about by the pandemic. Whether reduced foot traffic will have a huge impact on the occupancy rates of its retail properties remain to be seen.
Notable properties: Pavilion Mall, The Intermark, Da Men Mall
The Pavilion REIT may only have five properties in its portfolio, but they’re some of the most recognised landmarks in the Klang Valley, including Pavilion Mall, Pavilion Tower, Intermark Mall, Da Men Mall and Elite Pavilion Mall.
With the properties covering the retail and corporate office sectors – two of Malaysia’s most dependable industries – it’s no surprise that its market capitalisation currently hovers over RM4 billion, demonstrating the trust that investors have in these evergreen industries. According to its latest annual report, the occupancy rate of most malls is above 80%, with only Da Men Mall lagging behind at 68.9%.
Notable properties: Menara Axis, Axis Business Park, Bukit Raja Distribution Centre, Tesco Bukit Indah
The Axis REIT is one of the largest in Malaysia based on market capitalisation, with the current figure standing at over RM2.8 billion! Its property portfolio current consists of buildings in various industries spread out across Peninsular Malaysia, including corporate offices, logistics warehousing, manufacturing, and retail.
Thanks to its diversity, it’s well-placed to mitigate the effects of the Covid-19 pandemic, with its dividend distribution consistently above 5% in the years prior, only dropping to 4.31% in 2020. These encouraging numbers are a key reason why this is one of the most popular REITs in Malaysia.
Notable properties: JW Marriott Hotel Kuala Lumpur, The Ritz-Carlton, The Majestic Hotel Kuala Lumpur
As the name suggests, the YTL Hospitality REIT is in the hospitality industry with a slew of hotels and resorts across Malaysia in its portfolio. An interesting note for investors is that the YTL Hospitality REIT offers international exposure as it owns multiple properties in Niseko, Japan and three branches of the Marriott Hotel in Australia (Sydney, Brisbane, and Melbourne).
It first acquired its Australian hospitality properties in 2012, while The Majestic Hotel Kuala Lumpur was taken over in 2017, making it the tenth property managed by the YTL Hospitality REIT in Malaysia. In 2018, it ventured to Japan with the acquisition of The Green Leaf Niseko Village. While the pandemic means that REITs focused on hospitality and tourism will take a hit in the short-term, it could potentially prove to be a shrewd investment in the long-term when borders are allowed to reopen and travellers can move around.
Notable properties: The Mines, Sungei Wang, Gurney Plaza
One of the foremost Malaysian REITs, there are only five properties in the Capitaland Malaysia Mall Trust REIT, all of which are shopping malls. However, there are currently 1,146 leases within those five malls, meaning the properties have an occupancy rate of 85.1% at the time of writing.
It also boasted healthy foot traffic of 32.4 million throughout 2020, making it a good option for those that are keen on healthy rental cash flow in their REIT portfolio. Whether it can maintain these numbers in the wake of the pandemic is another matter altogether. This could also bounce back in the long-term when lockdowns are eased and retail returns to normal, so investors with a higher risk appetite may consider purchasing shares while prices are lower.
Notable properties: Platinum Sentral, Menara Shell, Plaza Mont Kiara (partial), TESCO Building Jelutong
The majority of SENTRAL REIT’s properties in its portfolio is in the corporate office sector, with the remainder in retail assets and car parks. In total, it manages over 2.1 million square feet of lettable areas across its properties, with an average occupancy rate of 93% as of December 2020.
It remains to be seen if the Covid-19 pandemic and various MCOs imposed in Malaysia will affect its revenue in 2021, but its healthy office tenancy rate should help to maintain a sense of stability.
Notable properties: KPJ Damansara Specialist Hospital, KPJ Healthcare University College, Nilai, Jeta Gardens, Aged Care and Retirement Village (Australia)
The Al-‘Aqar Healthcare REIT is mostly made up of properties in the healthcare sector, with a total of 20 hospitals and care centres spread across Peninsular Malaysia. However, it also diversifies into the education sector, with KPJ Healthcare University College, Nilai, and KPJ International College, Penang being the two higher education properties in its portfolio.
Investors that want some exposure to foreign markets will be pleased to note that the Al-‘Aqar Healthcare REIT also manages a single retirement village property located in Australia. This offers investors potential foreign exposure, which could be key to mitigating risk.
Notable properties: UOA Corporate Tower, UOA Centre Parcels, UOA Damansara II
With the six properties in its portfolio all comprised of corporate offices, it’s clear which sector the UOA REIT focuses on. According to its latest publicly available annual report, the average occupancy rate is over 90% as of December 2019, and it is probably safe to assume that this number has dropped since the pandemic began.
However, its Q1 2021 report highlights the acquisition of the UOA Corporate Tower as a reason for the increase in gross rental income, which could be attractive for potential investors once the pandemic is over.
This article is provided for general information purposes only, and is not intended to be or constitutes financial advice from Smart Investor or our affiliates. We do not represent or claim that content in this article is accurate, complete or up to date. Data taken from bursamalaysia.com, klse.i3investor.com, and respective REIT companies.
A good financial plan creates a roadmap or a guiding light for your financial life journey. It’s more than money and gives you an overall picture of where you stand financially and where you’re heading to. It should include financial details about your cash flow, savings, debts, investments, insurance, and any other aspects of your finances.
Financial planning is an ongoing process that allows you to get your money and life under control so that you can reduce stress, fear, and worries about your future life. I think everyone should have one, and it can be done in your own style or with a financial planner. Remember, financial planning is not only for the wealthy or people earning a high income.
You don’t need sophisticated software or tools to draw up your own financial plan; instead a blank piece of paper will help you to kick start the process. Start by listing down what you have (assets eg. savings account, EPF, investment account, investment property, business, etc.) and what you owe (liabilities eg. mortgage loan, car loan, personal loan, credit card, study loan, etc.), income (cash inflow) and expenses (cash outflow). This will give you a snapshot of whether you’re at a financial surplus or deficit, making it easier to work out a financial plan – covered in the next step.
Setting goals for your financial plan
This is where you decide how to design your own life. When crafting your own financial plan from the viewpoint of what your money can do for you, you’ll make saving and investing feel more intentional than overspending it. Your goals should be inspirational, measurable, and realistic – ask yourself where do you see yourself in five years’, 10 years’ or even 20 years’ time? It’s important because it gives you direction to achieve your financial goals at different life stages and it also influences how you plan your career as well.
For example, there will be different needs when doing financial planning in your 20s, 30s, 40s and 50s. In your 20s, you might want to make sure you have sufficient emergency savings that lasts for at least three to six months so that in emergencies you won’t be running on credit. Don’t forget to factor in insurance and ensure you get adequate coverage for personal accidents and a medical plan.
In your 30s to 50s, you’ll likely be experiencing high commitments due to getting married, raising kids, preparing university tuition fees, and funding your retirement fund. As you progress from different life stages, you’ll need to regularly keep an eye on your allocations for investing and spending. If you know that these things will happen in your 30s to 50s, you may save and invest more in your 20s or prolong the retirement age from 55 to 60.
Monthly budgeting for your financial plan
The next step is to allocate your monthly budgeting – what is coming in and what is going out to understand your spending habits and only able to take a balance between spending and savings. It depends on where you live and how you spend – living in an urban area may result in spending more due to higher rent, eating out more etc. If you don’t spend more than half of your income, then you can start saving enough to fund your goals. Of course, you can’t own the whole world, but you can own the things that you value the most!
Executing your financial plan
This is all about allocating your resources or cash surplus to fund your goals. Saving and investing must come into play and you should consider the types of financial products, the risks, returns and liquidity, as well as understanding your risk tolerance. For example, if you set aside 15% of your gross income for long-term goals like retirement, you may consider investing in stocks or equity funds that aim for capital appreciation. For shorter goals like saving for an emergency fund, you wouldn’t put your money in a high-risk fund because you might need it quickly in an emergency. It’s best to have separate accounts for different funding purposes.
Review your financial plan
Lastly, review and monitor your financial plan regularly to ensure you exercise strict discipline with the flexibility to adjust accordingly in the future, especially when entering different life stages. It’s easy to talk and plan, but execution remains the most challenging task as we may not have the discipline to stay on track. So, reviewing, monitoring and fine-tuning acts as reminders of your goals all the time. It’s best if you can make it measurable so that you can reward yourself with small gift when you are on track!
A good financial plan is not a beautifully written document that is presented nicely to you. It’s a tool to track your progress and help you reevaluate plans after a life milestone such as getting married, raising a kid, buying your first property, upgrading to a new car, preparing for a kid’s college fee, or building your retirement fund. When everything is handled, you can enjoy living your life. The small steps you are taking now will definitely have a huge, positive impact on your future.
About the author
Eewen is a licensed financial planner and strongly upholds the belief that financial wellness is all about money bringing a positive impact into your life. She can be contacted at keaheewen@vka.com.my
Investing is a key component in building one’s wealth, and it’s widely known that the earlier you start, the better. With the Covid-19 pandemic causing many to lose their jobs and income, it’s no surprise that there has been a huge spark in interest in investing as people explore new ways of making money.
However, there are also plenty of pyramid schemes, “money games” and various other investment scams that have emerged, with unscrupulous individuals ready to take advantage of people’s desperation with promises of getting rich quickly.
Needless to say, you should be wary of such schemes and should look towards more established financial products like mutual funds, especially if you’re not a professional when it comes to investing.
What is a Mutual Fund?
A mutual fund is a form of financial product that involves multiple investors pooling money together to invest in shares of the funds, with the assets entrusted to investment management professionals.
This person or company will allocate assets accordingly depending on the mutual fund’s aims, which often include capital gains or income for investors.
In Malaysia, this tends to be in the form of the unit trust fund, whereby the funds pooled by investors is held by an independent trustee (which is often another bank), with any profits or capital gain paid out to individual investors instead of being automatically reinvested.
Investors typically earn money when they receive dividends from the stocks held by the funds, when the fund sells stocks that have increased in price, or when the unit trusts fund price increase, which can then be sold for a profit.
For best results, it’s wise to invest for the long-term, which usually means a time span of at least five years, if not more. Here’s a list of the 10 best mutual funds or unit trusts in Malaysia based on their performance over the past five years:
The TA Global Technology Fund is a unit trust run by TA Investment that focuses on technology assets, with a minimum of 95% of the net asset value to be invested into the Janus Henderson Horizon Fund – Global Technology Fund, while the remainder will be kept as liquid assets.
As of now, the top 10 holdings of this fund’s portfolio include Alphabet (the parent company of Google), Microsoft, Apple, Facebook, Taiwan Semiconductor Manufacturing, Samsung, Visa, Alibaba, Broadcom and PayPal.
This fund is suitable for investors that want to invest over the long-term, with specific exposure to the technology segment of the global economy.
The AmChina A-Shares – MYR unit trust is run by AmInvest, banking on the continued growth of the China market. A minimum of 95% of the net asset value will be invested Allianz China A-Shares.
Currently, the top sector allocations of this fund include financials, consumer staples and discretionary, industrials, materials, IT and healthcare, all of which are stable industries in China.
This fund is suitable for investors that want to invest over the long-term, with exposure to the upside potential of the China market.
Keep in mind that AmInvest defines long-term as an “investment horizon of at least 10 years” on its fact sheet, so it’s important to only invest money that you won’t need in the next decade. This is a key point to consider for any mutual fund or unit trust you are considering to invest in.
This unit trust is mostly made up of equities in US companies and is denominated in US dollars, which can be attractive to investors looking for greater exposure in a foreign currency.
Currently, the fund’s top ten holdings in its portfolio include Amazon, MasterCard, Microsoft, Apple, VISA, Alphabet, ServiceNow, NVIDIA, PayPal and Adobe – most of which are household names to Malaysians.
As seen from the minimum investment amounts needed, this mutual fund caters to a specific demographic of investors.
The good news is that there are plenty of mutual funds that are more cost-friendly, so don’t worry if you’re not able to overcome this particular barrier to entry.
The Franklin U.S. Opportunities – MYR unit trust is exactly the same as the funds above, with the only difference being the minimum investments needed to enter, as well as the denomination of the funds, which in this case is Ringgit Malaysia.
While it’s still not the most affordable funds to enter, it does offer more seasoned investors in Malaysia the chance to invest in the US market using local currency.
However, bear in mind that the minimum holding is 20,000 units while the minimum redemption amount is 2,000 units, which is double the requirements for the US dollar denominated fund which is 10,000 and 1,000 units respectively.
As the name suggests, the Principal Greater China Equity Fund – MYR invests in the Greater China region, and the low minimum investments make it a unit trust that is cost-friendly to beginners. Investors who have a medium- to long-term investment horizon and want exposure to Greater China markets can opt to invest in this mutual fund.
Currently, the top 10 holdings in its portfolio consist of Taiwan Semiconductor Manufacturing, Alibaba, Tencent, MediaTek, AIA Group, HSBC, Sands China, China Pacific Insurance Group, Great Wall Motors and Li Ning.
While some of these names may be more famous than others, the fund’s presence in a wide variety of industries means it is perfectly placed to mitigate risk, as well as ride any waves that emerge.
The Eastspring Investments Dinasti Equity Fund is a unit trust focused on growth, meaning it’s suitable for investors with a long-term investment horizon and have a higher tolerance for risk.
The majority of the fund is allocated to the technology sector, evidenced by the top five holdings in its portfolio – Taiwan Semiconductor Manufacturing, Tencent, Alibaba, Meituan and Mediatek.
An added bonus is that this is a Shariah-compliant unit trusts, making it suitable for Muslim investors who are eager to gain some exposure to Greater China markets.
The mutual fund aims to have a minimum of 70% of its net asset value in Shariah-compliant equities and equity funds related securities, with any balance to be held in sukuk and Islamic liquid assets.
The Manulife Investment Greater China Fund unit trust is run by Manulife and is suitable for investors with a medium- to long-term outlook for their investments, and want exposure to Greater China markets.
A minimum of 2% of the fund’s net asset value will be held in liquid assets, while anywhere from 70-98% of the fund will be allocated to equities and equity funds related securities at any time.
Currently, the fund focuses on investing in large companies with a market capitalisation of more than US$3 billion, as well as promising growth and earnings.
Consumer discretionary and IT make up over 50% of the asset allocation of this unit trust, while the top five holdings in its portfolio include Taiwan Semiconductor Manufacturing, Tencent, Alibaba, AIA and Meituan.
Manulife logo
8. Manulife Investment U.S. Equity Fund – MYR Class
Also run by Manulife, this unit trust is suitable for investors that want exposure to the US market and are willing to have a medium- to long-term investment horizon as well as a higher level of risk.
Currently, the majority of funds are allocated to the communication services, financials, consumer discretionary and IT sectors. The top five companies in its holdings are Amazon, Facebook, Apple, Alphabet and Cheniere Energy, most of which are well-known names in Malaysia.
While the minimum investment required for both Manulife mutual funds on this list are by no means the lowest, it’s still relatively affordable for those with some experience of investing and who want exposure to the world’s biggest market.
Affin Hwang Capital logo
9. Affin Hwang World Series – Global Equity Fund – MYR
As the name suggests, the Affin Hwang World Series – Global Equity Fund – MYR unit trust aims to provide investors exposure to global equities, with a heavy focus on the US markets.
A minimum of 70% of the unit trust’s net asset value will be invested in the Nikko AM Shenton Global Opportunities Fund, with a maximum of 30% kept in cash and liquid equivalents. At the time of writing, these figures stand at 97.8% and 2.2% respectively.
Investors will receive exposure to global equity markets in sectors like healthcare products and services, insurance, software, internet, home furnishings and food among others. The top holdings of the target fund include Microsoft, Amazon, HelloFresh, Livanova, Accenture and Sony to name a few.
Affin Hwang Capital
10. Affin Hwang World Series – Global Equity Fund – USD
This unit trust is exactly the same as the one above, except that the minimum unit trust investments required are much higher. Therefore, it’s more suitable for investors with a higher risk appetite and capital to invest, or those that own large amounts of US dollars.
Conclusion
There are hundreds of unit trusts fund in Malaysia, and it is wise to take your time to do your research in order to find the best unit trusts for you. This will vary based on your age, investment horizon, risk appetite and even personal beliefs.
Be sure not to rush into any unit trusts investment until you fully understand all aspects of what the fund is investing in, their past performance, and how it works, as well as the potential risk involved.
Be wary as well of eager fund managers or unit trust consultants that simply want to sell you unit trusts investments instead of having your best interests at heart.
While there’s nothing wrong with listening to professional fund managers’ advices or recommendations, it’s imperative that you study what you’re investing in yourself in order to gain a full understanding.
This article is provided for general information purposes only, and is not intended to be or constitutes financial advice from Smart Investor or our affiliates. We do not represent or claim that content in this article is accurate, complete or up to date. Fund performance data from fsmone.com.my and unit trust data from respective mutual fund houses.
