Amanah Saham (ASNB) fixed price funds

Amanah Saham (ASNB) Funds – Don’t regret. It’s not too late yet.

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Amanah Saham Nasional Berhad (ASNB) was established in 1979. It’s a wholly-owned subsidiary of Permodalan Nasional Berhad (PNB). At the time of writing, it’s managing 12 funds with a total estimated value of RM207 billion. 

ASNB has two types of funds under its management – fixed price funds and variable price funds. 

Investing in ASNB fixed price funds is one of the best investment choices for Malaysians. If you are not familiar with ASNB investment funds, that’s okay. It’s not too late yet. 

Here’s the ultimate guide to investing in ASNB fixed price funds for all Malaysians.

Overview of ASNB Fixed Price Funds

ASNB currently manages six fixed price funds as follows:

1) Amanah Saham Bumiputera (ASB)

2) Amanah Saham Bumiputera 2 (ASB 2)

3) Amanah Saham Bumiputera 3 – Didik (ASB 3 Didik)

4) Amanah Saham Malaysia (ASM)

5) Amanah Saham Malaysia 2 – Wawasan (ASM 2 Wawasan)

6) Amanah Saham Malaysia 3 (ASM 3)

The table below shows the comparison of all ASNB fixed price funds.

ASNB Fixed Price Funds – For Bumiputera

There are three fixed price funds which are only available for Bumiputera, namely Amanah Saham Bumiputera (ASB), Amanah Saham Bumiputera 2 (ASB 2) and Amanah Saham Bumiputera 3 – Didik (ASB 3 Didik).

Amanah Saham Bumiputera or ASB fund

ASNB launched ASB fund on 2 January 1990. The fund objective is to generate long-term and consistent returns to the unit holders.

Other than Bumiputera, either a Siamese/Thai descendant, Portuguese/Eurasian descendant or non-Bumiputera convert who is at least 18 years old is eligible to invest in ASB fund.

ASB fund employs a defensive investing strategy to preserve unit holders’ capital at minimal risk. Therefore, the unit price of the fund is always fixed at RM1.00 per unit. 

ASB invests in various asset classes such as equity listed on Bursa Malaysia, unlisted equity, fixed income and money market instruments. But more than 70% of the fund is invested in equity instruments.

The unit holders of ASB fund benefits from regular income distribution as well as re-investment of distributions for long term yield.

ASB fund has been generating impressive returns year-on-year since its inception. The table below shows the historical returns of the ASB fund for the past 10 years.

ASB historical returns 2009 - 2018
ASB historical returns 2009 – 2018

Unlike other typical unit trust funds, ASB fund doesn’t impose a sales charge or redemption fee to the unit holders.

Difference between ASB and ASB 2 fund

On 2 April 2014, ASNB launched ASB 2 fund. ASB 2 fund is seen as an extension of the ASB fund, which the fund structure is broadly similar to the latter.

ASB 2 fund also emphasizes pretty much on capital preservation which adopts a defensive investing strategy. It aims to provide a regular income stream to the unit holders.

Perhaps, the most distinctive difference between the two is the assets allocation. ASB 2 fund may invest in real estate assets as well as in international markets as permitted by the fund deed.

The fund has also consistently generated more than 6.5% returns year-on-year since its inception.

ASB 2 historical returns 2016 - 2018
ASB 2 historical returns 2016 – 2018

Amanah Saham Bumiputera 3 – Didik or ASB 3 – Didik fund

ASB 3 – Didik fund, in substance, is no different from ASB and ASB 2 funds. 

The good news is there is no maximum limit that you can invest in ASB 3 – Didik fund. Unlike ASB and ASB 2 funds, each individual can invest up to 200,000 units only (excluding re-investment of distributions).

Unsurprisingly, ASB 3 – Didik has also consistently generated attractive returns of 6.4% on average for the past 10 years as well. 

ASB 3 Didik historical returns 2009 - 2018
ASB 3 Didik historical returns 2009 – 2018

Of course, such mouth-watering investments are not limited to the benefit of Bumiputeras in Malaysia only.

ASNB Fixed Price Funds – For All Malaysians

ASNB has also launched three fixed price funds which are available for all Malaysians, namely Amanah Saham Malaysia (ASM), Amanah Saham Malaysia 2 – Wawasan (ASM 2 Wawasan) and Amanah Saham Malaysia 3 (ASM 3).

The fund structure for all fixed price funds is broadly similar. All have the same objective of providing regular income distributions to unit holders while preserving their capital at minimal risk.

The table below shows the historical returns for the respective fixed price fund that is available for all Malaysians.

I bet you might have already noticed that ALL ASNB fixed price funds have been consistently generating more than 6% returns p.a. since the inception of each fund.

Personally, I have registered an account for each fixed price fund that is available for all Malaysians. The more the merrier! (P.S. Thanks Mum and Dad!)

But jokes aside, yielding high returns is just one of the many reasons why ASNB fixed price fund investment is a must have for every Malaysian.

5 Reasons Why You Should Invest in ASNB Fixed Price Funds

Here are the 5 main reasons why every Malaysian should invest in ASNB fixed price funds.

1. Low Risk

With yearly returns of more than 6% p.a., the risk of investing in ASNB fixed price funds is considerably lower than most investment choices in Malaysia. 

High risk, high return theory is clearly not rocket science where any average Peter and Jane on the street with common sense would fully comprehend.

But what if there is a low risk investment that generates high returns? Of course, it will raise doubts from all quarters. 

Doesn’t it sound too good to be true?

Why ASNB fixed price funds are low risk investments?

Because the price of each unit is always fixed at RM1.00. In other words, your investment capital is not subject to any fluctuation in the market value of the underlying assets.

Simply put, if you have invested 10,000 units for RM10,000 ten years ago, what you get in your account today is no less than that. In fact, you’ll get additional units for the reinvestment of yearly distributions.

To me, it’s no different from a normal savings account, but with a much higher interest.

Indeed, ASNB invests most of the fund in equity securities, which are generally perceived as high risk investments.

That’s why some questions might be floating in your mind now. 

“How do the fixed price funds sustain high income distributions every year?” 

“How does it affect my investment if the stock market suddenly crashes?”

Great! These are the brilliant questions that I would expect from you as a rational investor. Don’t worry, I will cover that part later in detail.

2. No Specialised Knowledge Required

It doesn’t require any specialised knowledge for you to start investing in ASNB fixed price funds. All you need to know is the funds are professionally managed by experts.

The brutal truth is that most people know the importance of investing early. Sadly, it still takes them forever to make the first move.

Millennials nowadays have very different priorities as compared to the older generation.

They rather spend time watching Netflix with loved ones after working all day long. 

Or, having some “me time” to re-charge whenever they have spare time.

Investments like exchange-traded funds, bonds, stocks, robo-advisor, P2P lending…Do all these sound very alien to you? 

“Staying in the comfort zone” is inherently instilled in our mindsets which is part of human nature. It also explains why generally we refrain from making an investment that we are not familiar with. 

Investing in ASNB fixed price funds doesn’t require your effort to understand all those technical jargons. You don’t have to learn how to pick a winning stock. Or, scratching your head to choose a unit trust fund from thousands of those available in the financial market.

Isn’t it a good reason to invest in ASNB fixed price funds?

3. High Liquidity

ASNB fixed price funds also provide high liquidity to the unit holders. You can withdraw your money anytime over the counter.

You won’t be surprised that many Malaysians have been living from paycheck to paycheck. 

Even if there’s a small sum left for savings, most investment options that are illiquid in nature deter them from investing. Because they may not even be able to squeeze a penny out from their wallets when emergency needs arise.

Unlike typical unit trust funds, ASNB fixed price funds do not impose any initial sales charge or redemption fee. Hence, the unit holders have the full flexibility to re-invest or withdraw their money whenever they need.

The best part is the income distribution for ASNB fixed price funds follows the monthly minimum balance. 

Let’s say you’ve invested RM1,000 in January and withdraw 99% of your investment subsequently in February for emergency purposes, you’re still entitled to the distribution for the month of January.

4. Low Initial Requirement

There’s always a misconception that only the rich can invest.

Well, if that’s true, anyone with RM10 is rich in Malaysia. Because you only need RM10 to start investing in ASNB fixed price funds.

You can subsequently top-up your investment from as low as RM1. All it takes is just your physical presence and RM10 to register for an account.

5. High Returns

What other investment options are there in Malaysia that could consistently generate more than 6% returns p.a.?

I really can’t think of any save for P2P lending. But both are not comparable since P2P lending is considered as a fixed income investment with different risk and return levels.

With the unit price always fixed at RM1.00, you can have peace of mind whenever you top-up your investment.

If it takes you 30 years to become a millionaire by investing in fixed deposits, ASNB fixed price funds would probably halve the time needed if the historical returns can be maintained.

How do ASNB fixed price funds maintain high yearly distributions?

Feeling skeptical about the sustainability of high returns every year? Especially after the quagmire in Tabung Haji made the headlines for overstating its assets and allegedly distributed dividends illegally.

Let’s take a closer look at the underlying assets held by ASNB fixed price funds. Since more than 70% of the fund assets comprise equity securities, I have extracted ASM’s top 10 holdings as at 31 March 2018.

ASM top 10 holdings
ASM top 10 holdings

The top 10 holdings above made up more than half of the total equity assets. It clearly shows that ASM mostly invests in defensive stocks that produce high dividend yield only.

Well, many may argue that be it a fundamental stock or a penny stock, equity investment is still high risk in nature. It does hold true to a certain extent, but only apply to stock trading or speculation.

Below is the S&P 500 historical stock chart for the past 90 years. After countless stock market crashes, from the Great Recession in 1937 – 1938, Asian Financial Crisis 1997, Dot-com bubble in 2000 to the more recent financial crisis in 2007 – 2008 and so on…

What can you see from the stock chart below?

S&P 500 historical chart
S&P 500 historical chart (Source: Macrotrends)

And this is the KLCI historical stock chart for the past 10 years.

KLCI 10 years historical chart
KLCI 10 years historical chart

There’s only one conclusion that I can draw based on history. A stock market crash is just part and parcel of an economic cycle.

It’s just like after KLCC twin towers were erected in the KL city, you won’t ever see the towers being demolished and replaced with some bamboo trees.

How to Invest in ASNB Fixed Price Funds

You can open an ASNB account at any of the ASNB branches or through its agents. ASNB’s agents are Maybank Berhad, CIMB Bank Berhad, RHB Bank Berhad and Pos Malaysia Berhad.

If you are at least 18 years old and meet the eligibility criteria, you just need an ASNB DF form, identity card and RM10 to register for a new account. In the case of a minor, the registered guardian needs to be present. 

The best part is there are various ways to invest in ASNB fixed price funds even if you don’t have enough liquid funds.

1.    EPF Funds Withdrawal

Under EPF Members’ Investment Scheme, you can invest up to 30% of your EPF account 1 after deducting the basic saving amount. The basic saving amount differs based on your age. You can refer here for further details.

It makes more sense for Bumiputeras to invest in ASNB Bumiputera fixed price funds using EPF funds. This is because ASB’s historical returns of 6% – 8% exceed EPF’s average return of 6% p.a. 

2.   Salary Deduction

You can also participate in the salary deduction scheme to invest in ASNB fixed price funds through monthly salary deduction. If you’re a private sector employee, you need to submit a BS1 F(1) form to your company payroll unit. In case of public service personnel, a separate form SPG ASNB is required. 

3.   ASB Loan

Last but not least is ASB loan financing which is only available for Bumiputeras. Many banks offer ASB loans for Bumiputeras to invest in ASNB fixed price funds. 

Bumiputeras can borrow up to RM200,000 subject to their credit history. The loan tenure can be as long as 30 years. Some banks cap the repayment period at the borrower’s age of 65.

Many have been wondering whether it’s worthwhile to get ASB loan financing to invest in ASB/ASB 2 funds. After all, it’s just simple math. So long ASB/ASB 2 funds are able to maintain their returns of above 7% p.a., Bumiputeras would definitely benefit from the interest differential in the financing which is approximately 5% p.a. subject to loan amount and tenure. Read: ASB Loan Financing – Borrow Money to Invest? to understand whether it’s worth it to take up a loan to invest in ASB fund.

myASNB or ASNB online account

Investing in ASNB fixed price funds has never been easier since the introduction of myASNB online account. Back in the day, we have to make endless trips to the banks or ASNB branches to top up investment. 

Worse, we might not even be able to top-up successfully after the long waiting time as the additional investment is subject to availability of the units. 

A myASNB online account allows you to:

  • Top-up investment in ASNB fund online
  • View your holdings
  • View your transaction history and status for the last 90 days

You can register for an online account through myASNB portal after opening an ASNB account at ASNB’s branches or agents.

If you have doubts, follow the instructions from this video guide.

Summing-Up

An investment with an initial requirement of RM10 that generates yearly returns of 6% above. Yet, doesn’t require any specialised financial knowledge. 

What other excuses do you have for not starting to invest?

5 comments

  1. Hi, would you be able to share where i could find the breakdown of the underlying assets held by ASNB fixed price funds?

  2. Hi. Thanks for the detailed explanation. This article is so helpful to me! May i know when will you publish the article which describe about ASNB variable price funds?

    1. Hi Cathrynn, thanks for your kind words. ASNB variable price fund works a lot like conventional unit trust funds where the price per unit fluctuates according to the funds’ net asset value. Personally, I do not hold any variable price fund as investment but I will definitely share more in near future. =)

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