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!
Table of Contents
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.
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:
(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).
(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.
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.
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!
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!
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!
[…] *Hot Tip: Instead of unit trusts, I would recommend you to invest in Amanah Saham Nasional Berhad (ASNB). It’s the best investment you can ever make because of its good historical track record and zero service fees. Here’s a good article explaining why. […]
Hi Chin Yi,
What is your opinion on how safe ASN funds are I have looked through the annual report of amanah wawasan and it seems they mainly own large cap KLSE counters yet for the last few years they have been giving 6% returns when almost all other large cap units funds in Malaysia have tanked. I would think that it is statistically unlikely they have actually performed at that level of their dividends as if you look at their variable price funds their funds have not performed that well which means are they digging into their capital to pay out dividends like a giant Ponzi scheme in expectation of better future returns. A bit like tabung haji which was given great dividends but paying from their capital. What’s is your opinion on this?
Hi Eric,
Yes you are right, indeed it is very intriguing to to see fixed price funds giving back such relatively consistent return considering how KLCI has been performing badly over the past year.
But one thing we should consider is that fixed price funds are not 100% invested in the stock market, but rather a mixture of the stock market and other types of assets (ie. fixed income).
Hence, there is a possibility that the return is protected by those investments as well.
Other than that, I personally cannot find too much details on how they handle the returns – but as long as they are paying tbh it is a pretty decent investment to hold on too.
Thank you for the nice quote! And very good job on presenting the detailed info for the 6 funds in Part 2.
Thank you so much Crezki! Glad that you find it useful 🙂
I reviewed my ASW dividend calculation for the period 01 Sept 2018 – 31 Aug 2019. I have only made investments for this entire period, without any withdrawals (sell back). Based on the [(0.05/12) * lowest monthly balance], I do not get the same amount of dividend – it appears to be less, when it should be higher.
Has anyone ever checked their dividend calculations? Am I calculating correctly?
Best regards.
Hi there! Perhaps it is best that you get in touch with the Amanah Saham’s officials to get this clarified?
I think this is the best way to get your questions answered.
Cheers.
do you know the dividend is pay into our bank account or does it added into the fund itself?
thanks!
Hi Low,
From my understanding, your dividend from ASNB is reinvested into your fund.
Hope this helps.
Yi Xuan
I tried to open an account at maybank. They refused to let me open, excuses no fund available. Asked the officer how to check the fund, login system lor. “No account, how to login la??” 😡
Hi Maggie, perhaps you can try other banks? Usually the RM10 for account opening should not be an issue.
Yi Xuan
Hi there! I really enjoy reading your blog 🙂
I have a question. I have been having amanah saham 3 for a while and been receiving a dividend of 5-6% and above on average. I wanted to ask, is investing RIETS better than amanah saham 3? since the average returns are also around 5-6% but amanah saham is capital guranteed.
Thank you!
Hi Jenny!
Glad that you enjoy ready my blog!
I think a better way to approach this is not EITHER/OR, but think of investing in Amanah Saham and REITs as a way to diversify your portfolio.
Investing in REITs also allows you to have authority over your investment – eg. you can buy and sell according to your plan, while Amanah Saham, you are relying on the fund managers to manage your investment.
p.s. 5-6% in REITs is only for dividend, BEFORE taking into account of potential capital appreciation.
Hope this clarifies your questions, and do let me know if you are keen to explore more! 🙂
Yi Xuan
Hi Yi Xuan, been following you on social media for awhile and came across this article awhile back.
I would appreciate it if you could shed some light on my question. So I bought ASN Sara (variable price) about 1+ years back through Ambank, today a bank officer called up to advise me to withdraw the profits. He mentioned that this is because the price is high now so it’s a good time to withdraw and to leave the principal sum in there for investment. This makes sense to me but I do wonder if there are actually any external factors that I might not be aware of by withdrawing the profits (it’s not much, about 4k+ and I would rather leave it in for re-investment). Based on your professional knowledge experience, would you think that withdrawing the profits would be a good move? Thanks!
Hi Cathy,
Thanks for reaching out and glad to hear from you:
1. Have you verified that the person that called you is indeed an Ambank’s bank officer? Hopefully you have a check on that as scam calls nowadays are really crazy haha.
2. I have little knowledge about variable funds and I am certainly not in place to tell you anything specifically about ASN Sara.
Personally, I’d challenge you to think from the perspective of opportunity cost: Are there better investments out there compared to ASN Sara? If yes, perhaps you can shift your focus there. If no, there is little reason to sell an investment that is making money.
If you give this some thought, I think it’ll help you to get an answer. 🙂
p.s. I am by no means a professional in personal finance. I am just like you, still learning and making mistakes along the way. Whenever possible, do seek advice from a licensed financial planner before making any financial decision – check out my experience with my own personal financial planner here:
https://nomoneylah.com/2019/12/17/personal-financial-planner/
Hope this helps!
Yi Xuan