Which are the best types of investments to try in Malaysia?

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.

1. Unit Trust.

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 is okay.

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 income.
  • 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 Malaysia.
  • 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.

2. 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 sub-fund.

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 value.

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 perform poorly.
  • Insurance charges rise with age.

What 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 include: 

  • Conventional fixed deposit. It pays you a predetermined interest regardless of any factor that may affect the bank performance.
  • Islamic Fixed Deposit. Returns depend on bank performance.
  • Interest rates of fixed deposits are around 4% in Malaysia.

4. Stocks

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.

What 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.

1. 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.

2. Stock market

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 foreign-owned companies.

3. Property market

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.

4. Taxes

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. Well, now you may want to know about Malaysia register company online for foreigners.


Company Registration Expert Since 2012