Table of Contents
Finally – let’s get to where to actually invest your money.
As the options for what you can invest in will vary by country, this article will be more tailored towards Malaysians.
If you haven’t read through the previous posts, you can read them here
Choosing the right investments to build a diversified portfolio
Investing can be hard.
There’s all the different asset classes that I explained in the previous post like:
- Stocks
- Bonds
- Cash
- Commodities
- Crypto
Even if you invest in just stocks, there’s so many different stocks and ETF’s out there to choose from.
Do you invest in Malaysia? US? Emerging markets?
Which industries do you want to invest in? Which stocks do you choose?
It sounds daunting but don’t worry, this is what these articles are for anyway.
So to construct your overall investment portfolio, you’ll have some options depending on how interested you are in investing.
We can go fully passive, complete DIY, or a hybrid of the two which is my personal preference.
In this post I’ll focus on the choices you have to invest passively in Malaysia. Active investment will come in the next post!
Passive Investments
Passive investing is suitable for those who want to invest their money but don’t really care about the details of it.
It’s not a bad thing to not care about investing to be honest, I’d say most people fall into this category. Not everyone’s a nerd like me who loves the ins and outs of the financial markets
So when I say passive, it means that you don’t have to worry about picking your investments or managing your portfolio. Just deposit your money there and you’re done.
Without wasting any more of your time, here are your options:
Passive Investment 1: Unit trusts
Assets invested in: Stocks, bonds, and cash
Note – I wouldn’t consider all unit trusts as passive investments. If you decide to pick and choose from fund providers like Kenanga, Public Mutual, or the likes – it’s not really passive is it.
What I’m talking about are the ones that’s special for Malaysians – fixed price unit trusts.
Option 1 – Amanah Saham
Latest returns: ASB (4.6% + 0.5% bonus), ASM (4.5%)
For bumis, ASB is almost like a no brainer. We get pretty decent returns at close to zero risk.
For non bumis, ASM is very similar with the only con being that there’s an overall quota that you have to fight for.
Occasionally, they’ll increase the fund size like they did earlier in 2023 so watch out for opportunities like these to invest your money.
They also have funds called ASB 2, ASM 2, and ASM 3. Pretty much the same so you can go for any of them. These are all fixed priced funds though, I wouldn’t go for the variable ones even though they are considered passive too.
Option 2 – Tabung Haji
Latest returns: 3.1%
Muslims that are planning to go for hajj can also opt for Tabung Haji which gives slightly lower returns but remains a decent option.
Option 3 – Amanah Hartanah Bumiputera
Latest returns: 5%
Another option I recently found out about is Amanah Hartanah Bumiputera (AHB) which is like ASB except it focuses on the real estate sector.
Their dividends are pretty decent as well and it gives you some diversification from stocks and bonds since its in the real estate market.
Anyway, I recommend most new investors to start with these unit trusts because:
- Their returns are pretty good
- You get a diversified portfolio
- The funds are fixed in price, your investment value won’t decrease
I won’t get into how to invest in these but they’re pretty straightforward. Have a look here:
Wildcard Option 4 – Unit Trusts Via Consultants/Financial Planners
Returns: Vary based on fund
The final unit trust option that I would kinda consider passive is if you go through a unit trust consultant or a financial planner.
I can’t vouch for these as I’ve never done it myself, but it’s passive because someone else will be choosing the funds for you.
Just tell them your investment horizon on your goals and they should be picking the right funds for you.
Make sure you trust your consultant/financial planner though. Having some investing knowledge is still useful so at least you can question their decisions.
Passive Investment 2: Money-market funds
Assets invested in: Cash
The next passive investment are money-market funds – a recent favourite of many Malaysians and for good reason.
Money-market funds are essentially the same as unit trusts. Actually scratch that – they are unit trusts.
The major difference is that money-market funds focus on investing in highly-liquid, short-term instruments.
This is mainly cash kept with banks, cash-equivalent securities, and fixed deposits.
The big attraction of money-market funds is that they give you decent returns with close to zero price fluctuation – your investments won’t drop in value.
“Hang on, isn’t that exactly how you described the unit trusts earlier??”
You’re right. The thing about ASB, ASM, and Tabung Haji is that usually investments like that aren’t fixed in price – they’ll fluctuate based on the performance.
We’re lucky to have those options as Malaysians, don’t think any other country has investments like it.
Anyway, people use money-market funds for similar reasons – earn a decent return with minimal risk
If you’re maxed out on your ASB/ASM/TH then this is a good option for you.
Option 1: Versa Cash/Cash-i
Latest returns: 4.3% (Promo)
Versa Cash is their conventional option whereas Versa Cash-i is their shariah compliant option.
They have the best returns in the market right now because they’re running a promotion (which has no end date as of now).
Otherwise, the fund returns are between 3.3% – 3.8%.
Invest in Versa here or use my code 99KFHLDR so we both get RM10 when you deposit RM100
Option 2: KDI Save
Latest returns: 3-4% (Promo)
Kenanga wanted to get into the digital market as well so they launched Kenanga Digital Investing (KDI) with KDI Save as one of their products.
Like Versa, they also indicate this as a promo but have not set an end date. However, KDI Save is not Shariah compliant.
Invest with KDI here and we’ll both get RM10 when you invest RM250 in KDI Invest
There are more options when it comes to money-market funds like Stashaway Simple and Tng GO+ so you can take your pick.
I have an article covering the 4 money-market funds Malaysians can invest in which you can see here.
Passive Investments 3: Roboadvisors
Assets invested in: Stocks, bonds, commodities
The final passive option to investing is the most interesting one because it invests in multiple asset classes and has the highest return potential.
Think of it like unit trusts and its consultants, except it’s all done via a robot (apparently).
Also, instead of unit trust funds they invest in ETF’s. If you don’t know what they are, check out Part 2 of this series.
This is in my opinion the easiest way for Malaysians to invest in stocks because of how passive it is.
All you have to do is answer some questions so they can determine your risk tolerance and goals before constructing a diversified portfolio for you.
One of my portfolios with a roboadvisor has 18 different ETF’s!! And I didn’t even choose them, they picked it for me based on my risk tolerance.
So generally if you go for the higher risk option you’ll be mainly in equities (stocks). If your risk level is low to medium, you’ll probably get some exposure to bonds and commodities too.
Anyway, here are your options:
Option 1: Stashaway
Latest returns: varies by portfolio
They have many different portfolio types that are based on your risk level. They’ve also constructed special portfolios in partnership with Blackrock that I’ve invested in myself.
That portfolio has exposure to soooo many different ETF’s that gives me good diversification.
Invest in Stashaway here to get 50% off management fees for 6 months
Option 2: Wahed Invest
Latest returns: varies by portfolio
A very popular option for Muslim investors since their unique selling proposition is that they’re shariah compliant. Non-Muslims can invest here as well if you’re interested.
In fact, they created their own ETF ($HLAL) to get exposure to US stocks that are shariah compliant.
I had my doubts about their portfolio management skills early on but the returns have been pretty good tbh.
The variety in ETF’s are a lot less which is understandable considering the restrictions in place.
Still, you get exposure to US, global, and emerging market ETF’s. You might also get an allocation into gold depending on your risk level.
If you’re interested, you can download the Wahed app and use my code “emibin1” so we both get RM10 once you start investing.
There are also other roboadvisors that you can choose from like Versa, KDI, MyTheo, and Airo. Just see which one works best for you!
Conclusion
So those are all your options if you’re looking for a hands-off approach to investing.
Honestly, they’re good enough for most people but in the next post I’ll talk about how you can DIY invest in your favourite stocks, ETF’s, commodities, and even crypto!
Stay tuned 🙂
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