What Investment is the Best in Malaysia | Investment Series

Top 5 Low-Risk Investments in Malaysia You Should Consider

Key Summary:

• Amanah Saham Bumiputera (ASB)
• Bonds
• Exchange-Traded Fund (ETF)
• Fixed Deposit (FD)
• Real Estate Investment Trust (REIT)

When it comes to investing, various degrees of risk come with diverse sorts of investment options. Some individuals are more comfortable with low-risk investments, while others are ready to take on greater risk for the prospect of a bigger return. Low-risk investments are popular in Malaysia because although the profits on these investments may be low, they provide a degree of consistency that is desirable to many investors. Although of course, there’s always a degree of risk associated with every investment, but some are riskier than others.

Here are five excellent possibilities in Malaysia if you’re seeking for a secure location to store your money.

Note: This list is structured in alphabetical order and not based on the amount of danger.

1. Amanah Saham Bumiputera (ASB)

Amanah Saham Bumiputera (ASB) is a unit trust maintained by Permodalan Nasional Berhad (PNB) (PNB). It was formed in 1989 to enable Bumiputera investors collect funds for long-term objectives. ASB maintains a wide portfolio of assets, including shares, bonds, and money market instruments. The fund is accessible to every Bumiputera aged 18 and above. ASB units may be acquired via regulated banks and agencies and online through the PNB website.

ASB is a popular investment option for many Malaysians because to its favourable returns, however a reduction in distribution rates has been visible these last few years. In addition, ASB units may be sold back to PNB at any time, offering investors the option to pay out their investment when required. ASB is an ideal alternative for investors searching for a long-term investment vehicle with strong returns and minimal fees.

2. Bonds

Another low-risk investing choice in Malaysia is bonds. Bonds are a sort of investment that individuals or corporations may make. The government often releases these to generate money for certain projects. In return for the investment, the bond issuer agrees to pay back the initial amount of money, plus interest, over a predetermined time. Bonds normally have one-year or longer maturities, and bonds with longer maturities often provide greater interest rates than those with shorter durations.

While bonds are typically considered a safe investment since they provide the opportunity for stability and regular income, they come with some risk. For example, if interest rates increase after you acquire a bond, the market value of your bond will decline, and you may lose money if you sell it before maturity. For these reasons, it’s vital to analyse your financial goals before investing in bonds carefully.

Nevertheless, bonds may be an integral element of a diversified investing strategy.

3. Exchange-Traded Fund (ETF)

Exchange-traded funds (ETFs) are investment funds holding a basket of assets, such as stocks, bonds, or commodities. Unlike typical mutual funds, they are exchanged on stock markets. They may also be purchased and sold like any other stock throughout the day on an exchange, enabling investors to take advantage of market changes. This flexibility makes them a popular alternative for investors who seek greater control over their holdings.

ETFs are often managed by experts and strive to mirror the performance of a certain index. They tend to have lower charges than standard mutual funds and are more tax-efficient, making them an appealing alternative for cost-conscious investors. Whether you’re just beginning to invest or are a seasoned expert, ETFs may be a terrific addition to your portfolio since they provide a handy method to access a broad range of assets in a single investment.

If you’re contemplating investing in ETFs, it’s crucial to study and pick a fund that suits your financial goals. ETFs might be riskier than conventional investments, so it’s crucial to understand how they operate before you invest.

4. Fixed Deposit (FD)

Fixed deposit (FD), commonly known as term deposit, is one of Malaysia’s most popular low-risk investments. This is because they provide guaranteed profits and are supported by the Malaysian government. It is an investment account where you commit to keep your money in the account for a specified duration, generally between one and five years. FD accounts may be created with as low as RM1,000, making them an accessible alternative for many investors.

It also provides clients the opportunity of earning a higher interest rate. It is set for the whole duration independent of fluctuations in the market scenario, so you know precisely how much you’ll earn. Additionally, your money is PIDM insured, so you can be confident it’s secure.

However, one negative is that you won’t be able to access your money during the set period, so it’s crucial to guarantee you won’t need it before starting an FD. If under specific circumstances, you need to make partial withdrawals from your FD account before the maturity date, it is still permissible, although penalty costs could be applied.

A fixed deposit might be an excellent alternative if you’re seeking for a secure location to put your cash and earn some income.

5. Real Estate Investment Trust (REIT)

REITs may be a fantastic alternative if you’re searching for an income-producing investment. Real estate investment trusts, or REITs, are an unique sort of financial instrument enabling investors to combine their money to acquire all assets, from residential and commercial to industrial and retail. It is an increasingly common approach for people to invest in property without contemplating the whole purchase price. REITs provide benefits over direct real estate ownership, including diversification, expert management, and liquidity.

In addition, by law, REITs must pay out at least 90% of their taxable revenue to shareholders in the form of dividends. This makes them an enticing alternative for income-seeking investors since we’re talking 4% to 8% dividends compared to normal equities. You may also earn profit from them via capital appreciation. However, REITs may also be volatile, and their share values may vary in reaction to changes in the real estate market.

Of course, like other long-term investments, you’ll need to be patient and invest your money over a lengthy time to realize large rewards. So, REITs may be worth considering if you’re contemplating investing in properties but don’t have the funds to purchase them directly.

In Conclusion

So, what’s the ideal low-risk investment for you? It depends on your circumstances and ambitions. There is no such thing as a one-size-fits-all approach when it comes to investing — what works for one person may not be the ideal method for another, and what may be a low-risk investment for one person may be excessively hazardous for another.

When it comes to investing, there is no such thing as a guaranteed return. No matter what investment you’re contemplating, some amount of risk is involved. However, by knowing your investing style and investigating the numerous options available, you can make an educated choice about where to place your hard-earned wealth. We hope this article has provided you an excellent starting place to begin your study, and be sure to conduct your due diligence while investigating possible investments.

Happy Investing! 😉