Before you invest, it is advisable to select an
investment that works for you. Foreign investment has been oscillating between
$9 billion since the year 2010. This makes Malaysia the highest FDI recipients
in the region.
So, if you have lots of money lying in the bank in your savings account, think about investing in Malaysia. Most savings accounts in Malaysia offer about 1.8% interest rate per year. With that in mind, it may not be the best way to invest your hard earned money.
The best way for you to boost and perhaps make your
wealth multiply is simply through investments. Here are some of the most
reliable investments to consider in Malaysia.
A unit trust is simply a portfolio that is made up of
shares, real estate, and bonds. The portfolio is then broken into units which
are then sold to their customers with a profit. However, your money will be
combined with that of your fellow investors.
The money that is earned will be returned to every
person based on each person’s contribution. In most cases, you prefer a person
or a company to handle your money. It is not a must for you to follow how your
money is being invested, but ultimately don’t care as long as the agreed profit
Also if you invest in these portfolios, you will
desire to have a long-term, safer and stable approach to investing. Don’t worry
if you lack enough knowledge about unit trust. Ask for recommendations from
trusted friends and family.
Read the necessary information : how to invest in Malaysia?
Otherwise, if you have a lot of knowledge, pick up
trustees based on location as it will be more profitable. The main types of
unit trust include:
- Balanced funds. It is a mix of high risk
and low-risk funds that may include; equities, money market funds and fixed
- Fixed income. It is made up of securities
including corporate and government bonds, which occur when you lend your money
to the government or a company.
- Equity bonds. Their performance mainly
depends on the stock market movements. You will find them listed on the Bursa
- Money market funds. These consist of funds
that are cash equivalent securities. Afterward, they are converted to cash.
Today, the most popular unit trust is Amanh Saham
Bumiputera. Many peoples have desired to buy ASB, but they had no enough money
to buy a significant amount.
Though ASB is only limited to Malaysian citizens,
there are others where you can invest through CIMB and many more. If you really
want to sign for a unit trust, you don’t have to follow the long procedure.
Just need to purchase a unit trust from their unit
trust offices or apply through any bank. The cost of application will depend on
the unit trust you want to invest in. Usually, the return rate is calculated as
a percentage per annum.
Referring to the funds’ performance history is the
most effective way to determine the rate of the returns. They post it on their
website. If the funds truly have a good history of yielding good returns, then
you can gauge what you will get at the end based on averaging those rates.
Investment-linked insurance plan.
Investment-linked plans are usually policies that have
life insurance coverage and investments components. Your premium is used to pay
for units in one or more sub-funds of your choice.
Purchased units will be used to cater for insurance
and other minor charges. It provides insurance protection in case one dies or
if there is a permanent disability to anyone who had applied.
Depending on the plan, permanent disability or death
may comprise the sum of amount assured or else the value of the units in the
The value of these units will depend on how much they
are selling in the market, which in turn varies depending on the sub-fund
performance. It is for this reason that they do not have a guaranteed cash
Why invest in Investment-linked Insurance plan?
- Most regular premium ILPs gives you the
flexibility to vary the insurance coverage as you need to change. For instance,
you can minimize the coverage or even increase it.
- Additionally, you may also top up your
investments and withdraw partially.
Types of investment-linked insurance plans
ILPs can be classified into the following categories:
- Regular premium ILPs. Here you pay
premiums on even bases. These ILPs will give you the freedom to vary the level
of insurance you need. They offer expansive protection to the insured persons.
- Single premium ILPs. If you want to invest
in these ILPs, you will have to pay a huge sum so that you can be in a position
to buy units in sub-funds. The single premium will offer lower protection than
the regular ones.
What should you put into consideration when choosing a sub-fund?
Your decision to choose a sub-fund should never be
limited to the sub fund’s historical performance. Always make sure that you are
very comfortable with the risks that may occur after purchasing them.
Here are some of the consideration that if you fail to consider, you may deem to fall imminently:
- After the CPF assign a risk
classification, put in mind that these classifications serve as a guide on
whether the sub-fund is suitable for you.
- Though not all, some of the sub-funds will
offer great potential for higher returns. But this does not mean they are not
subject to high financial losses. Again some may be expected to yield more
returns in exchange for relatively lower risks. Therefore, it is up to you to
reach on a wise decision.
What are the most popular risks associated with ILPs?
Here are the most popular risks:
- The overall returns are not fully
assurance since the value of ILPs depends on the performance of sub-funds. So
it is advisable not to rely on the past returns of the sub-funds since they may
- Insurance charges rise with age.
should you know before you invest in ILPs?
- Always consider if you are comfortable
with the premiums if you don’t have an extra income.
- Compare investing through an ILP against investing
in other investments.
- Some of the insurance coverage are
investment oriented while others may give you the freedom to set the level of
coverage you want.
3. Fixed deposits
It is an investment product which allows you to invest
a lump of money for a fixed period at a fixed rate of interest.
Once you put your money in a fixed deposit account,
you can take it out until agreed tenure ends. These fixed deposits will offer
higher interest than the average savings account.
The tenure can be from one month while the longest
tenure is five years. Your end returns will depend on how long you put your
money in the fixed deposit account. There are two types of fixed deposits. They
- Conventional fixed deposit. It pays you a
predetermined interest regardless of any factor that may affect the bank
- Islamic Fixed Deposit. Returns depend on
- Interest rates of fixed deposits are
around 4% in Malaysia.
There are a few types which can be traded in Malaysia.
The most popular is Ordinary stocks. If you happen to buy a regular stock, this
means you will be included in the list of the company’s shareholders.
It simply means that you will be entitled to any
profit that the company realizes when they issue dividend at the end of every
financial year. Here are some of the best selling stocks in Malaysia:
- AirAsia Group Bhd. It has emerged as one
of the cheapest stocks in Bursa Malaysia. After fuel prices rose, the
shareholders enjoyed a bumper dividend of more than 40% per share.
- Serbia Dinamik Holdings Bhd. Lately, it
was one of the few gainers in the edge daily financial portfolio. The oil and
gas supplier has for long remained strong. The group share prices have
maintained an upward graph for the last few years.
are the benefits of investing in Malaysia?
The country’s economy has had continuous growth for
the last 8 years. Although there is a slight slowdown, the number is expected
to reach 5.5%. Working in favor of the robust economy is the currency which
bounced back in 2017.
In 2016, it was the best performing currency by more
than 10% against the United States dollar. It has for long proved to be a
stable economy by being one of the largest producers of both rubber and palm
products. Additionally, it also produces natural gas and at the same time
manufacture electronic goods.
The Malaysian government has lately established a new plan to shift the economy so that it can be mainly focused on creativity and innovation. Here are just some of the numerous benefits of investing in the country.
Dependable political climate
The new prime minister-Mahathir has assured his
country that he will live up to his promise. So that a good political climate
can be created, he has agreed to form a government with the Chinese mostly with
those ranking in higher positions.
Though he has not been so supportive of Chinese
investment in the country, the current prime minister has however indicated
that he will follow through the projects his predecessor had approved. At the
same, he is determined to eradicate corruption which has been slowing the
economy of the country.
Arguably, Bursa Malaysia is the best stock market in
the world. Also, you can’t deny it is the most active in South East Asia. It
consists of 1000 listed companies.
Having an average of RM3.5 billion means that the
total market capitalization must exceed RM1.8 trillion. The country’s stock
exchange is one among the few where you have the freedom to invest in
The conclusion of the GE14 will greatly encourage
those who were holding back to invest their money in the residential market.
With the aim of boosting the market, the government
has hesitated to approve constructions projects that might sell more than RM1
million. Therefore, if you are deciding to invest in high end residential and
retail houses, the future in the market is very bright.
To increase the number of investors in the country,
the government has come up with some favorable policies. These include:
- Access to government-sponsored industrial estates.
- Grants and loans from government agencies.
- A wide range of tax deductions.
Among the Asian emerging markets, Malaysia has proved
to be unique regarding comparative advantages.
Though at some point the FDI had declined, the
government have put measures that will make FDI substantially increase.
About that, the leaders have vowed to continue
exploiting the vast resources in the country.