Category: Investments

There are many factors that expatriates must take into account when considering what to invest in.

Whether you are risk-loving, or not, Malaysia has a lot to offer expatriates for work, pleasure or retirement. How much time you choose to spend in Malaysia may depend on your work schedule, family commitments and the availability of legal status as a foreigner.

All these things change and so does the risk of investing in Malaysia. When you are deciding whether or not to invest in Malaysia, as an expatriate or a local, one way to make better decisions is to look at the risk and return on investment opportunities in Malaysia in a global context.

Malaysia Country Risk

Country risk is the uncertainty associated with investing in a particular country and, more specifically, the degree to which that uncertainty could lead to losses for you as an investor. Uncertainty can come from many different factors ranging from political and economic, to health and technological influences.

A rule-of-thumb to use when assessing country risk is a global, or Asian, country risk ranking. For Malaysia the recent country risk rankings are varied and comparable to their Asian neighbours. Risk rankings are based on a variety of political, sovereign debt, perception of ethics indices and a combination of business specific factors, but how useful are they to the individual investor?

Once you have taken the decision to invest yourself, your time and your hardearned money into Malaysia as an expatriate, then you can run through the list of assets that you might like to invest in and do a global comparison for each one.

Your Time In Malaysia

Is time more precious than money? It may be, depending on whether you have a busy job or are retired. Deciding how much of your time each year to spend in Malaysia and how much to spend in the rest of the world is a good way to assess your investment risk in Malaysia as an expatriate.

With high growth rates in Asian countries and, until recently, ease of travel across Southeast Asia, Malaysia is the perfect hub from which to do due diligence on other Asian investment opportunities.

Your Investment Portfolio

Most investors, expatriate and local, diversify their investments amongst different asset classes. Malaysia offers the same, or similar, assets as most developed countries, which now includes cryptocurrency exchanges, but does that mean that Malaysia should be a large proportion of your investment portfolio? The answer to this depends on your personal investment journey.

Entry, and exit, from Malaysia may be more complicated than you may have anticipated as an expatriate. If you are a Malaysian and see your future lying overseas, in Australia, the UK or elsewhere, then Malaysia may be a smaller part of your global investment portfolio.

Short-, medium-, or long-term stays in any country does not necessarily equate to how much of your investment portfolio should be held there, but it could be an important factor. Analysing typical economic variables over time can inform your investment decision.

The RINGGIT

The first thing most visitors to a country look at is the exchange rate risk. If it is favourable, you may be pleased but it is not likely to cause you to extend your time in a country. Holidays, travel, work or living in a foreign country are usually motivated by more than one factor.

In the case of Malaysia, the valuation of the ringgit against other foreign currencies is attractive for a holiday but does it make it a good investment for the medium- or long-term? Probably not; the Malaysian Ringgit is relatively weak, compared to major global currencies, and also volatile.

Buying on dips may be good for speculation but long-term accumulation of currency in Malaysia, like many other countries, faces the risk of tightened global exchange and transfer controls.

Real Estate

Buying real estate in Malaysia is relatively easier for locals than for expatriates. Limits on purchase price for real estate for foreigners vary from state to state, and legal status as well. Compounding these risks, oversupply of property in Kuala Lumpur is palpable, but there are some real gems to pick up in good locations at affordable prices if you take expert, local real estate advice.

Real estate in Kuala Lumpur is no longer below global market prices but there are many, great out-of-town locations still available at a fraction of global prices.

Tax Rates

Personal income tax and corporate tax rates are still relatively low in Malaysia. As an expatriate you can benefit from tax rates that are comparable to other neighbouring Asian countries and still below average global tax rates. A non-resident tax rate of 30% applies across Malaysia and 15% in Iskandar, Malaysia.

This compares favourably to many countries in Europe where marginal rates of tax can be 40% or higher. Any good investment advisor will tell you that there is no point in making 100% if you have to pay 40% of it in tax. It also leaves you more to invest from your Malaysian income.

Interest Rates

Bank fixed deposit interest rates in Malaysia are still competitive, at more than 2% per annum, whereas globally interest rates can be as low as 0.1%. If you have built up a significant amount of savings, holding them in a riskless bank account in Malaysia could be a good investment in these turbulent times.

Then there are higher interest saving options such as the EPF for salaried expatriates where annual interest rates, although variable in recent years, was a relatively attractive 5.2% per annum in 2020, with easy access to withdraw funds.

Future Investments

Crypto exchanges are nascent worldwide and Malaysia also has four regulated digital asset exchanges, namely Luno, MX Global, SINEGY and Tokenize. There is currently no capital gains tax on cryptocurrency profits in Malaysia, making it an attractive location to buy, hold and sell Bitcoin, Ethereum and other cryptocurrencies compared to other countries.

If you are smart (and lucky), you may be able to realise large, speculative profits when you buy and sell cryptocurrency assets in Malaysia then invest for the longer term.

Exit Strategies

Exit from Malaysia may prove more difficult than you may expect, so do your homework and be prepared to face changing rules and regulations just like most other countries. A smart expatriate should think twice before he, or she, or they, make a long-term investment decision in Malaysia.

One key country risk assessment that should be done before making an investment decision in Malaysia is your ability to transfer currency for foreign payments, or other uses. Such a country risk assessment involves weighing and assessing a variety of factors and potential, unforeseen future changes. If you are planning to retire in Malaysia, and never leave, then the only real risk is your inheritance. Due to the Covid-19 pandemic, and other factors, even this long-term view may need to be reassessed.

A key question locals may ask you as an expatriate in Malaysia is ‘What are you doing here?’ It’s a good question, so why not ask yourself, as an expatriate investor, ‘What am I doing investing here?’ A good way to answer this is to put your Malaysia investments in a global context, then take it from there.

Article by: Dr. Jonathan Di Rollo (PhD Econ)

First published : Smart Investor Issue 369

Capital Market Masterplan (CMP3) strives to build a capital market that is relevant, efficient and diversified to enable the Malaysian economy to emerge fitter and stronger.

The Securities Commission Malaysia (SC) launched the third Capital Market Masterplan (CMP3), which will serve as a strategic framework for the growth of Malaysia’s capital market over the next five years. It seeks to leverage on the strengths and potential of the Malaysian capital market to accelerate economic growth that is sustainable and inclusive.

The CMP3 was unveiled at a virtual ceremony officiated by Finance Minister YB Senator Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz.

Speaking at the launch, the Finance Minister said, “The CMP3 fits well into the nation’s aspirations as one of the key enablers that will pave the way for a wider population to participate in the nation’s growth by enabling more inclusive and accessible investment products and distribution channels. With the CMP3 as a strategic guide for our capital market over the next five years, I am confident that it will continue to play an important role in the Malaysian economy.”

Datuk Syed Zaid Albar, Chairman of the SC said, “Malaysia is now at a critical juncture in our post-pandemic journey. It is imperative for the capital market to continue to support the economy as we transition into an inclusive and sustainable nation. The progress in the capital market cannot be measured solely by growth and size, as it also has to serve the underlying needs and aspirations of the country and its people.”

The CMP3 takes into consideration global megatrends that will shape the recovery and growth of global and Malaysian economies as it steers the capital market towards three desired outcomes:

i. Relevant to the development of the economy and its stakeholders;

ii. Efficient in capital mobilisation and in achieving the desired regulatory outcomes; and

iii. Diversified to create value for all participants.

To achieve these desired outcomes, the CMP3 outlines six key development and regulatory thrusts that will collectively serve as pillars in developing strategic initiatives over the next five years.

The first development thrust is facilitating fundraising for competitive businesses through a diverse market and intermediation ecosystem. The CMP3 also aims to empower all Malaysians to invest for their future and promote digital inclusion and protection for vulnerable investors. Furthermore, through the Sustainable and Responsible Investments (SRI) and Islamic Capital Market (ICM) pillars, the CMP3 aims to shape a stakeholder economy by mobilising more capital towards sustainable businesses.

In tandem, the SC’s regulatory approach will also evolve in response to changing trends and market landscape. The CMP3 strives to embed greater shared accountability within the capital market, particularly corporate responsibility to stakeholders beyond short-term profitability. It also aims to achieve a more efficient regulatory outcome and greater efficiency in investor protection through swift, effective and targeted enforcement and supervision approaches. In addition, as the industry becomes more digital, the CMP3 envisions greater use of technology – both RegTech and SupTech – for greater efficiency and deeper insights.

“It will be our collective responsibility to bring these strategic thrusts and desired outcomes to fruition, for us to achieve meaningful change. This is a shared journey for all of us to undertake. We will be stronger together,” concluded Datuk Syed Zaid.

Over the last two decades, the Capital Market Masterplan 1 (2001 – 2010) and Capital Market Masterplan 2 (2011 – 2020) have successfully expanded the capital market while ensuring market stability and integrity. Malaysia now has a well-diversified capital market, with an equity market that has over 900 listed companies, a bond market that is the third largest in Asia, an Islamic capital market that is innovative and well-regarded globally, a derivatives market that leads in crude palm oil price discovery and a unit trust industry that is one of the largest in the region.

In addition, governance strategies implemented during the previous masterplans have ensured robust regulatory oversight to enhance confidence in the integrity of Malaysia’s capital market. The Malaysian capital market regulatory framework is benchmarked and ranks highly internationally with regards to, amongst others, investor protection standards, corporate governance and enforcement capabilities.

The CMP3 will build on this solid foundation to pave the way for the next stage of Malaysia’s market evolution and growth.

To learn more about the CMP3, please visit https://www.sc.com.my/cmp3

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.

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:

Top 10 Malaysia REITs

1. KLCC REIT

• Website: https://www.klcc.com.my/portfolio-klcc-reit.php
• Stock short name: KLCC
• Market capitalisation: RM12.312 billion
• Portfolio:https://www.klcc.com.my/property-reit.php
• Notable properties: PETRONAS Twin Towers, Menara 3 PETRONAS

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.

2. IGB REIT     

• Website: http://www.igbreit.com/
• Stock short name: IGBREIT
• Market capitalisation: RM5.992 billion
• Portfolio: http://www.igbreit.com/index.php/portfolio/
• 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.

3. Sunway REIT          

• Website: http://www.sunwayreit.com/
• Stock short name: SUNREIT
• Market capitalisation: RM4.795 billion
• Portfolio: http://www.sunwayreit.com/our-portfolio/
• 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.

4. Pavilion REIT          

• Website: http://www.pavilion-reit.com/
• Stock short name: PAVREIT
• Market capitalisation: RM4.206 billion
• Portfolio: http://www.pavilion-reit.com/244_199_199/Web/WebPage/Pavilion-Mall-Central-Location/Pavilion-Mall.html
• 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%.

5. Axis REIT    

• Website: https://www.axis-reit.com.my/
• Stock short name: AXREIT
• Market capitalisation: RM2.833 billion
• Portfolio: https://www.axis-reit.com.my/type.php
• 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.

6. YTL Hospitality REIT

• Website: https://www.ytlhospitalityreit.com/
• Stock short name: YTLREIT
• Market capitalisation: RM1.525 billion
• Portfolio: https://www.ytlhospitalityreit.com/portfolio.asp
• 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.

7. Capitaland Malaysia Mall Trust REIT 

• Website: https://www.cmmt.com.my/
• Stock short name: CMMT
• Market capitalisation: RM1.319 billion
• Portfolio: https://www.cmmt.com.my/portfolio_overview.html
• 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.

8. Sentral REIT

• Website: https://sentralreit.com/
• Stock short name: SENTRAL
• Market capitalisation: RM959 million
• Portfolio: https://sentralreit.com/portfolio-highlights/
• 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.

9. Al-‘Aqar Healthcare REIT

• Website: http://www.alaqar.com.my/
• Stock short name: ALAQAR
• Market capitalisation: RM920 million
• Portfolio: http://www.alaqar.com.my/our-portfolio.php
• 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.

10. UOA REIT

• Website: https://www.uoareit.com.my/
• Stock short name: UOAREIT
• Market capitalisation: RM770 million
• Portfolio: https://www.uoareit.com.my/property.php
• 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.

Last updated July 22, 2021.

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 Best Unit Trust Fund in Malaysia

1. TA Global Technology Fund

• Website: https://www.tainvest.com.my/
• Annualised returns (5 years): 23.45%
• Minimum initial investment: RM1,000
• Minimum subsequent investment: RM100

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.

2. AmChina A-Shares – MYR

• Website: https://www.aminvest.com/
• Annualised returns (5 years): 23.33%
• Minimum initial investment: RM5,000
• Minimum subsequent investment: RM5,000

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.

3. Franklin U.S. Opportunities – USD

• Website: https://www.franklintempleton.com.my/
• Annualised returns (5 years): 22.51%
• Minimum initial investment: RM24,000 / US$5,000
• Minimum subsequent investment: RM2,400 / US$500

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.

4. Franklin U.S. Opportunities – MYR

• Website: https://www.franklintempleton.com.my/
• Annualised returns (5 years): 20.82%
• Minimum initial investment: RM10,000
• Minimum subsequent investment: RM1,000

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.

5. Principal Greater China Equity Fund – MYR

• Website: https://www.principal.com.my/
• Annualised returns (5 years): 20.32%
• Minimum initial investment: RM500
• Minimum subsequent investment: RM200

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.

6. Eastspring Investments Dinasti Equity Fund

• Website: http://www.eastspring.com/my
• Annualised returns (5 years): 18.26%
• Minimum initial investment: RM1,000
• Minimum subsequent investment: RM100

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.

7. Manulife Investment Greater China Fund

• Website: https://www.manulife.com.my/
• Annualised returns (5 years): 17.97%
• Minimum initial investment: RM1,000
• Minimum subsequent investment: RM100

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.

8. Manulife Investment U.S. Equity Fund – MYR Class

• Website: https://www.manulife.com.my/
• Annualised returns (5 years): 17.57%
• Minimum initial investment: RM1,000
• Minimum subsequent investment: RM100

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.

9. Affin Hwang World Series – Global Equity Fund – MYR

• Website: http://www.affinhwangam.com/
• Annualised returns (5 years): 17.19%
• Minimum initial investment: RM5,000
• Minimum subsequent investment: RM1,000

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.

10. Affin Hwang World Series – Global Equity Fund – USD

• Website: http://www.affinhwangam.com/
• Annualised returns (5 years): 17.05%
• Minimum initial investment: RM24,000 / US$5,000
• Minimum subsequent investment: RM4,800 / US$1,000

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.

Last updated July 15, 2021.