What is Amanah Saham & How to Invest in it? (Part 1)

Last Updated on January 8, 2020 by Chin Yi Xuan

I have never paid much attention to Amanah Saham investment until a recent request from a reader to write about it sometime back in May.

In fact, my initial impression towards Amanah Saham was that most of its funds are for Bumiputras, and funds that are open to the public are very hard to buy – and that was everything I knew. But thanks to the request from that reader, I have found myself researching about arguably one of the most reliable investments that give a very solid return.

Without further ado, let’s find out more about Amanah Saham!

What is Amanah Saham?

Amanah Saham are funds that are managed by Amanah Saham National Berhad (ASNB), a subsidiary of Permodalan Nasional Berhad (PNB). ASNB was established on 22 May 1978. In short, ASNB is a government-supported unit trust management company.

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Fixed Price Fund vs Variable Price Fund

As of the time of writing, there are a total of 14 Amanah Saham funds under the portfolio of ASNB, and of all, there are 6 Fixed Price Funds and 8 Variable Price Funds:

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(A) What’s the difference between Fixed Price Funds and Variable Price Funds?

	Fixed Priced Funds	Variable Priced Funds
Value	Fixed @ RM1/unit.	Varies according to the market.
Sales Fee	0%	3% – 5%
Performance	Consistent (6%-7%)	Fluctuating

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To give you a better picture, just take Variable Price Funds just like the conventional mutual funds in the market. As the name suggests, Variable Price Funds are funds that will fluctuate in value in accordance with the market movement. In terms of fees, Variable Price Funds also charge sales fees between 3% – 5%.

Simply put, for your Variable Price Fund investment to match the return of a 3% Fixed Deposit (FD) rate, your fund’s return will need to be at least 6% (assuming a sales fee of 3%) – which I wouldn’t recommend putting your hard-earned money in considering the inconsistent performance of all Variable Price Funds for the past 3 Financial Years.

On the other hand, ASNB’s Fixed Price Funds are the ones that everyone is talking about. The key strength of Fixed Price Funds (well, you have guessed it, didn’t you?) is the value of the fund will be fixed at RM1/unit no matter the market condition. Not only that, there is also no sales fees (yes, 0%) charged by all 6 Fixed Price Funds.

The best thing? All 6 Fixed Price Funds have been paying an average 6%-7% dividends consistently for many years, making them one of the most reliable investment vehicle in the market.

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(B) All hail, Fixed Price Funds! (Benefits)

For all the reasons above, I will discuss specifically on Fixed Price Funds as these are what everyone is talking about when it comes to Amanah Saham investment.

Personally, I am genuinely happy to see that out of the 6 Fixed Price Funds, 3 (ASM, ASM 2, ASM 3) are actually open to all Malaysians, and I was delighted for good reasons:

#1 Unit value is fixed at RM1/unit:

Meaning, any market fluctuation will not affect the fundamental unit value of these funds. In other words, in the instances where the market is so bad that there is no dividend payout at all, at least the value of your fund will remain constant.

This makes Fixed Price Funds stand out as one of the best Unit Trust investment available in the market.

#2 Consistent Dividend:

Fixed Price Funds are famous for good reasons. One of them is because they are able to deliver a solid and consistent performance for a long period of time.

From my research, all 6 funds are able to deliver an average of 6% – 7% return on a consistent basis for the past 5 financial years (More about their performance on Part 2).

A consistent 6% dividend, when reinvested (which these funds do), will bring you a massive compounded return over a long period of time.

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#3 Dividend Earned is not Taxable:

So you do not have to worry about tax filing.

#4 No Sales Charge:

Another highlight feature of Fixed Price Funds. Meaning, you do not have to pay any sales fee if you purchase any new units.

That said, Funds have full discretion to charge a 1% sales fee – just saying.

#5 On-The-Spot Redemption:

You can withdraw your investments and get your money immediately (either via cash/cheque/bank transfer).

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(C) Risks & Cons of Amanah Saham investment (Fixed Price Funds)

One thing that we have to keep in mind is that there are no investments that are 100% risk-free. Here are some of the risks and cons of investing in the Fixed Price Funds of ASNB:

#1 Market Risks and Interest Rate Risk

All Fixed Price Funds’ performance and return are subject to the fluctuation of the market and interest rate.

While it is true that the unit value remains fixed at RM1/unit, dividend payout may fluctuate in accordance with funds’ exposure market and interest rate fluctuation.

#2 Capital not Protected

Your capital is not protected by Perbadanan Insurans Deposit Malaysia (PIDM) if ASNB goes bankrupt.

#3 Availability of Funds

As there is a quota capped to our race to these funds, when the quota is fully filled, you will have a hard time trying to get into these funds (unless suddenly someone let go of their units).

#4 Withdrawal Hassle

Any withdrawal of funds must be made over the counter at ASNB’s branches.

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How to Register for an ASNB Account?

To register for an ASNB account, you must bring along your IC and the minimum cash needed for the initial subscription for the funds (RM10 for Fixed Price Funds), and apply at any ASNB branches or agents.

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No Money Lah’s Verdict

In my opinion, I honestly think that if you can get your hands into any of ASNB’s Fixed Price Funds, it is no doubt one of the best money decisions that you will ever make, period.

For myself, I will go and open my ASNB account and start trying my luck to get my hands on any of these funds, and I will keep you all updated on my experience (so stay tuned and subscribe if you haven’t already!)

In Part 2, I will introduce and go through the performance of all 6 Fixed Funds with you, so you can decide which one to invest in after that! As for Part 3, I am going to share my personal view on Amanah Saham investment (plus my rants – you gotta check it out!).

Have a good read!

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Disclaimer: The accuracy of this content is based on the best effort by myself and at the time of writing. I do not guarantee the validity of this content as details and performance of ASNB and its funds will change over time. This article is also not a buy/sell recommendation. Please seek professional financial planner‘s advice on this matter.

Credits to MyPF and MyFinTalk for their comprehensive writings on ASNB!

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Note: For all my Bumiputera friends and readers that may be asking about to buy into Amanah Saham via cash or ASB Financing, definitely check out the articles by Crezki & KC Lau for more tips and info!