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.
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