Highly-Likely-No-Loss Investment Funds in Malaysia

Article updated at 23.54pm on 12/03/2023.

My good friend, Jordan shared to me about a Twitter thread where these people uses EPF funds to be financially free. It's a great plan for any person. So I decided to do some analysis on the funds and document it here. Feel free to let me know if there's anything to add or edit. 

Data references:

• Tabung Haji

• Employees' Providence Fund

• Amanah Saham Berhad

After some research done for the funds and their dividend rates from the year 2016, I present to you my summarized findings below. (Q&A-style summary available below)

1. Amanah Saham Berhad (ASB):

• Nature of fund: ASB is a unit trust fund managed by Permodalan Nasional Berhad (PNB), a reputable Malaysian investment company. The fund invests in a diversified portfolio of stocks and bonds, with a focus on generating income and capital appreciation for investors.

• Dividend yield: ASB has had a relatively stable dividend rate ranging from 6.25% to 6.75% over the past few years, which translates to a yield of about 6.5% to 7%.

• Payout ratio: ASB has a high payout ratio, indicating that a significant portion of its earnings are paid out as dividends.

• Historical performance: ASB has a consistent track record of generating stable returns for investors over the long term, with a history of paying out regular dividends.

• Fund management: ASB is managed by experienced professionals with a proven track record of managing large funds.

• Risk profile: ASB is generally considered a lower-risk investment option, as it invests in a diversified portfolio of stocks and bonds.

2. Employee Providence Fund (EPF):

• Nature of fund: EPF is a retirement savings fund established by the Malaysian government to provide retirement benefits to employees in Malaysia. The fund invests in a diversified portfolio of assets, including equities, fixed income securities, and real estate.

• Dividend yield: EPF has had a relatively stable dividend rate ranging from 5.7% to 6.15% over the past few years, which translates to a yield of about 5.7% to 6.15%.

• Payout ratio: EPF has a high payout ratio, indicating that a significant portion of its earnings are paid out as dividends.

• Historical performance: EPF has a consistent track record of generating stable returns for investors over the long term, with a history of paying out regular dividends.

• Fund management: EPF is managed by experienced professionals with a proven track record of managing large funds.

• Risk profile: EPF is generally considered a lower-risk investment option, as it invests in a diversified portfolio of assets.

3. Tabung Haji:

• Nature of fund: Tabung Haji is a Shariah-compliant savings and investment fund established to help Muslims in Malaysia save and invest for Hajj, the pilgrimage to Mecca. The fund invests in a range of Shariah-compliant assets, including equities, fixed income securities, and real estate.

• Dividend yield: Tabung Haji's dividend rate has been more volatile, ranging from 4.0% to 6.25%, which translates to a yield of about 4.0% to 6.25%.

• Payout ratio: Tabung Haji has a lower payout ratio compared to ASB and EPF, indicating that a larger portion of its earnings are reinvested back into the fund.

• Historical performance: Tabung Haji's dividend rate has been more volatile compared to ASB and EPF, indicating greater uncertainty and risk.

• Fund management: Tabung Haji is managed by experts in Islamic finance.

• Risk profile: Tabung Haji is generally considered a lower-risk investment option.

In conclusion, when considering investing in any of these funds, investors should consider factors such as dividend yield, payout ratio, historical performance, fund management, and risk profile, among others. Each of these funds has its unique characteristics and is suited to different types of investors. It is important to consult with a financial advisor and conduct thorough research beforemaking any investment decisions. Additionally, investors should consider their own financial goals, risk tolerance, and investment horizon before investing in any fund.

Overall, ASB, Tabung Haji and EPF are lower-risk investment options that offer relatively stable returns and consistent dividend payouts. These funds may be suitable for investors who prioritize stability and reliable income. 

In summary, investors should consider their own financial goals and risk tolerance, as well as the characteristics of each fund, before making any investment decisions. It is also advisable to seek the advice of a financial advisor and conduct thorough research before investing in any fund.

Q&A-style Summary

Q: What are the main factors to consider when investing in funds like ASB, EPF, and Tabung Haji?

A: When investing in funds like ASB, EPF, and Tabung Haji, it is important to consider factors such as the nature of the fund, historical dividend rates, volatility of returns, fees, and any restrictions on withdrawals. It is also important to consider your own financial goals and risk tolerance, as well as conduct thorough research and seek advice from a financial advisor before making any investment decisions.

Q: I want to check my accounts in these funds, where do I check them online?

A: 

• TH : Available on THiJARI's website or download the Tabung Haji application on your device.

• EPF : Available on KWSP's website or download the i-Akaun application on your device.

• ASB : Available on ASNB's website or download the myASNB application on your device.

Q: Which fund is the best option for investors who prioritize stability and reliable income?

A: All funds discussed are lower-risk investment options that offer relatively stable returns and consistent dividend payouts, making them suitable for investors who prioritize stability and reliable income.

Q: What advice would you give to someone who is considering investing in one of these funds?

A: Before investing in any fund, it is important to consider your own financial goals and risk tolerance, as well as conduct thorough research and seek advice from a financial advisor. As Warren Buffet once said, "Risk comes from not knowing what you're doing." By educating yourself and seeking expert advice, you can make informed investment decisions that align with your goals and risk tolerance.

Q: Are there any restrictions on withdrawals for these funds?

A: Yes, there may be restrictions on withdrawals for these funds. For example, EPF has restrictions on withdrawals until retirement age or for certain purposes such as medical expenses or home purchases. It is important to consider these restrictions when making investment decisions. While for ASB and EPF, the liquidity process is not the same - some may only offer a certain amount of online withdrawal.

Q: Can these funds guarantee a certain rate of return?

A: No, these funds cannot guarantee a certain rate of return. However, historical dividend rates can provide a general indication of the expected returns. It is important to remember that past performance does not guarantee future results.

Q: Should I consider investing in more than one of these funds?

A: Diversification is important in any investment portfolio, so it may be beneficial to consider investing in more than one of these funds. However, it is important to consider your own financial goals and risk tolerance, as well as conduct thorough research and seek advice from a financial advisor before making any investment decisions.

Remember, investing involves risk, and there are no guarantees in the stock market. As another quote by Warren Buffet goes, "The stock market is a device for transferring money from the impatient to the patient." It is important to take a long-term perspective and stay patient and disciplined when investing.

Q: Can I invest in these funds if I am not a citizen of Malaysia?

A: The eligibility to invest in these funds may vary depending on your citizenship and residency status. It is important to check with the relevant authorities or financial institutions to determine your eligibility and any restrictions.

Q: How do I monitor the performance of these funds?

A: You can monitor the performance of these funds through various sources, such as financial news outlets, investment platforms, or the fund's official website. It is important to monitor the performance of your investments regularly and make any necessary adjustments based on changes in market conditions or your own financial goals.

In conclusion, investing in funds like ASB, EPF, and Tabung Haji can provide investors with stable returns and potential for growth. However, it is important to consider your own financial goals, risk tolerance, and conduct thorough research before making any investment decisions. As Warren Buffet famously said, "Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1." By being disciplined and informed, investors can make sound investment decisions that align with their goals and minimize risk.