Investments in Malaysia: A Complete Guide 2020

Investments in Malaysia

Now a coveted skill, making good investments is a recommended staple when it comes to having a good personal finance diet. Making investments on your own can be daunting, but infinitely more rewarding once you get the hang of it. 

Coveted, yes, impossible, no. Let’s take a look at the investments that you can manage by yourself through your laptop while sipping a cup of tea and lounging in your pyjamas. These DIY (do it yourself) investments don’t take a whole lot of effort, and you get to cut out the middle person. 

Before we get into that, some of you might want to know about the various Investment options you might have. 

How to Invest in Malaysia

Several investment opportunities are open and available to Malaysians today. Let’s make a list shall we?

Fixed Deposits Investments

An oldie but a goodie. If we want to talk about safe investments, there is practically nothing safer than a fixed deposit. Deposit your money into a bank account, for however long the stipulated period is for and the bank pays you interest for your trust in their security.

You can even do e-fixed deposits now, a feature provided by most banks with an active online platform. All you need to do is open an account, or if you already have one browse their site to search for the deposit that works for you. 

Interest rates can range from 2-4% per annum. Your funds are also heavily protected, they’ve been ensured by the government for deposits of up to RM250,000. 

Bonds and Stocks/Shares 

The big three as some might say, bonds, stocks, and shares are quite simply counterparts or cousins to one another. Investments in stocks and shares prove to higher risk, therefore, to balance the risk, invest in a stable bond at the same time. Or that’s what most investors suggest. 

A bond is an investment where you, as Mr.Moneybags, lend money to the government or a company and have them pay you an interest amount. The general case for bond investments is that the investor is filthy rich. 

However, there are easier bond options for the layman now where the minimum investment amount is no longer a few hundred thousand ringgit, but maybe RM1000. 

To purchase bonds, you can check in with a website like fsmONE by iFAST Capital Sdn. Bhd. Either open an account or research the bonds you want to purchase first then continue with the account opening. 

Stock/Share Market. Buying a stock or shares simply means, you’re buying a tiny part of a company. If the company does well and makes good profits, then they will share some of its profits with you in the form of dividends. It is a relatively simple exchange, however, choosing the right company to invest in is always brought into question. 

Malaysia’s stock market is a small place on the larger scale of things. However, we do have a bunch of resources in regards to learning how to navigate the stock market, especially since Leo DiCaprio starred in the movie ‘Wolf of Wallstreet’. 

To get started with investing in the stock market, you will need to first set up an online stock brokerage account. The most user-friendly platform in Malaysia is currently Rakuten Trade. If you want to get in on the international stock market, make sure you sign up for an international trading account. 

Grow you money

Unit Trust and Mutual Funds

Similar to Amanah Saham “Trust Funds” (which we will get to in a moment). Unit trusts are where a group of investors, i.e. you and me, put money into a massive fund, and a fund manager or fund management team will invest the money to hopefully make a return. The downside to unit trust and mutual funds in Malaysia is that the charges are way too high and the fund manager still takes their fee regardless of whether the fund turns a profit or loss. 

Unit trusts are a readily available commodity in the investment market. Making it easily one of the most diversified investment options. All you’ll need is a good fund manager and a good fund. Take your time looking for both of these components. 

If you’d rather not deal with the hassle, then you can always opt into an investment-linked life insurance policy. Typically the investment part of a life insurance plan is a portion of your funds invested into stable unit trusts. The fee is your premiums, and they can be high, but here you’re covered in case of an emergency. 

Amanah Saham Investments

Uniquely local, Amanah Saham translates to “Trust Funds” in English, as mentioned previously, similar to Unit Trusts. Created by the nation’s largest fund management company, Permodalan Nasional Berhad (PNB), Amanah Saham is one of the most underrated investments in Malaysia. 

How it works is, when you purchase a unit, PNB will take your money and add it to a pool. We’re talking about 100x the size of your Olympic size pool. They then use that mammoth load of money to invest in stocks and bonds. The thing is, PNB is the cream of the crop when it comes to making good investments, they always make money, money that they pay out to you in dividends. 

There are 2 types of Amanah Saham funds. 

  1. Fixed-price funds : ASB, ASW 2020, ASM, ASD, AS 1 Malaysia, & ASB2
  2. Variable-price funds : ASN, ASN Equity 2, ASN Imbang 1, ASN Imbang 2, ASN Equity   3, & ASN Sara 1

Returns for both funds average from 3-10% per year. However, keep in mind that variable-price funds offer fewer returns for higher sales charges. 

How to invest with Amanah Saham?

Here’s the main issue with Amanah Saham, getting a unit to invest with. Units are limited and hard to come by. There are free places where you can try to purchase a unit on the ASNB website. However, you will still need to sign up for an account first, which you can do at any ASNB Office or check with your bank. Selected banks in Malaysia also carry ASNB units available for purchase. 

Real Estate Investment Trusts (REITs)

We can’t argue that the number 1 investment option in Malaysia is real estate. Property values rarely go down, because everyone needs a house. Not to confuse you, traditionally investing in property means, putting down a downpayment, buying a house, and then selling or renting it out at a higher value. 

The problem with the traditional sense of property investment is that not everyone can do it. Even if you did have half a million ringgit lying around to buy a new development property, how easy is it to sell?

REITs are similar to Unit Trusts, at least in concept. With REITs however, instead of a diverse portfolio of investments, your money is invested in only property. Any kind of property, from residential projects to malls and office buildings. 

The great thing about REITs, your money back is guaranteed. 

How to Invest in REITs?

Real Estate Investment Trusts (REITs) are listed on Bursa Malaysia Stock Exchange. To sign up you will need to sign up for a stockbroking account online. Check back in our previous section about Bonds, Stocks, and  Shares. 

Equity Crowdfunding

There are a lot of options available to businesses that need to raise capital. One of these options is Equity Crowdfunding, raising capital from the crowd through the sale of securities in a private company, not listed on the stock exchange. 

Now, you might be wondering how this relates to you. Equity Crowdfunding essentially connects the average person with young businesses. It practices a similar concept to Peer-2-Peer lending, with the difference being, instead of getting paid in interest, investors receive shares. 

Peer to Peer Lending

Traditional and mainstream investments can be a bore. So let’s move on to a more fun topic of investments, Peer to Peer Lending. Here in Malaysia, there is a small market for this type of lending and it’s on the rise. It works much like a dating app, matching small to medium enterprises (SMEs) looking for financing, with individual investors. 

It showcases the business in need of funding to the investors, and crowdfunds large sums of money, and packages it as a loan or financing to the SME. The SME will get their cashflow via the loan or financing, and investors who contribute to this crowdfunding are paid in returns with interest. The platform itself claims a small fee for services rendered. A win-win for all parties involved.

Sound familiar? Of course, it would. It has a lot in common with Equity Crowdfunding. Where funds are raised from the masses rather than from other businesses, banks, or establishments. This type of lending here is regulated by the Securities Commission of Malaysia. As is Equity Crowdfunding. So if you wish to explore them both, go for it. They’re legit. 

Peer to Peer Lending investments are much easier to understand compared to some of the other things we’ve covered. There are 6 big players in this industry including Funding Societies. All you need to do is visit our website, open an account, and start investing. You can start with an amount as low as RM100. It’s just that easy! 


Plan to diversify your investment portfolio? Click here to start your investment with Funding Societies Malaysia.

Need funds for your business? Click here to register and check your eligibility.

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Disclaimer: The information provided to you in this blog post is intended only for general information purposes only and does not constitute legal or other professional advice on any subject matter. The materials and the information provided are not intended to be and do not constitute an advertisement or solicitation.  In no event will Funding Societies be liable to any party for any direct, indirect, incidental, special, consequential, or punitive damages for use of such information by you or any unauthorized third party.