WITH the economic climate taking a hit due to the raging pandemic that has swept the world, more people are beginning to realise the importance of investing their hard-earned Employees Provident Fund (EPF) savings to generate a nest egg for the future.
Caught unprepared, many Malaysians were affected financially, especially when measures taken to stem the spread of the Covid-19 virus essentially halted the economy for a while.
Thus, many have faced hard truths in terms of their own financial health, which is why it is now high time to take a look at investing EPF savings for retirement.
Now, individuals can invest and take charge of their own EPF investments on the EPF i-Invest platform through EPF i-Akaun, which was launched under the Members Investment Scheme (MIS) by EPF in August 2019.
With this EPF i-Invest platform, investors can take charge of their own EPF investments digitally and take their investment overseas by investing abroad. To invest, EPF members just need to log-in EPF i-Akaun and select “Investment”.The EPF i-Invest empowers eligible members with greater flexibility, functionality and convenience for members to invest, offering a consolidated view of member’s holdings, amount eligible for investing and fund comparison tools. Members aged 55 and above can also invest through this platform.
For investors’ convenience, EPF i-Invest is a digital platform, which means all transactions can be done online – invest, switch or redeem EPF investments at the touch of the screen from 8am to 7.30pm during weekdays and 8am-6pm during weekends. This also makes it easy for investors to monitor investment performance via the EPF i-Akaun app, from anywhere, anytime.
How much can you invest?
The EPF MIS was introduced to offer the public the opportunity to diversify their own EPF investments. It is an option for members to invest up to 30% of the amount in excess of your EPF Account 1 savings, depending on eligibility. You can check your eligible investment amount through the EPF i-Akaun website or mobile app to find out. Furthermore, effective May 1, EPF members investing under the MIS are entitled to a reduction of upfront fees charged by fund management institutions for a period of 12 months ending April 30,2021.
Therefore, no upfront fees will be imposed by FMI for investments transacted through i-Invest via EPF i-Akaun. However, there are still charges for investments made through agents, where the upfront fee has been reduced from a maximum of 3% to a maximum of 1.5% until April 30,2021.
In times like these, diversification of an investment portfolio is a wise move, as it allows investors to mitigate potential losses by not putting all your eggs into one basket, as diversification is one way to balance risk and reward in your investment portfolio.
Spreading investments around to limit exposure to any one type of asset would help reduce the volatility of the investment portfolio over time. And it could be an important part of a robust retirement portfolio.
The EPF i-Invest platform allows investors to potentially benefit from overseas investment exposure. Though sometimes associated with higher risks, this is not always true. Diversifying investments overseas could help manage investment risk and open up the portfolio to better growth opportunities in the long run, as well as offer some degree of protection against currency depreciation.
Managing opportunities and risk
Bearing in mind that not everyone has the same level of risk tolerance, the EPF i-Invest allows investors to take charge of their EPF savings based on their individual risk profile and tolerance.
Those with a higher risk profile can choose to grow their investments more aggressively, while more conservative investors can manage their investment growth at a pace they are comfortable with.
Invest with Principal
Principal Asset Management Berhad, is a joint venture between Principal Financial Group, a member of the Fortune 500 and a Nasdaq-listed global financial services and CIMB Group Holdings Bhd, one of Southeast Asia’s leading universal banking groups.
With over 25 years’ experience in Malaysia, it offers over 30 quality EPF-approved funds (conventional and Syariah-compliant funds) in different geographical sectors and is capable of meeting different risk tolerance levels.
Principal has won awards at the Annual Alpha Southeast Asia Fund Management Awards 2020 for Best Asset Manager – Money Market and Best Asset Manager – Balanced Funds.
Moreover, it has won other awards as well, including at the EPF 2019 External Fund Manager Awards with Best International Equity Fund Manager, Best 3-Year ROI International Equity Fund Manager, Best Domestic Sukuk Fund Manager and Best 3-Year ROI Domestic Sukuk Fund Manager.
It also won the Lipper Fund Awards from Refinitiv 2020 for Equity Asia Pacific ex Japan - Provident (10 years), as well as the Morningstar Award 2020 Malaysia for the Best Malaysia Large-Cap Equity (Syariah) Fund.
It’s important to choose reputable fund managers and high-quality funds with a good track record of performance. For instance, you may consider these EPF approved funds under Principal.
Source: Lipper Investment Management as of Oct 31,2020; annualised returns based on reinvested dividends.
Note: Performance of the above funds have been averaged out over a period of five years. This means that investors could possibly see some years that fall short of the dividend goal, while others may far exceed it. The past performance of a fund should not be taken as indicative of its future performance. As an investor you should make your own risk assessment and seek professional advice, where necessary.Source: Lipper Investment Management as of Oct 31,2020; annualised returns based on reinvested dividends.
Among the top funds is the Principal Greater China Equity Fund, which provides you the opportunity to be part of China, Hong Kong and Taiwan’s economic growth through strategic investment. This fund, suitable for investors seeking capital appreciation over the medium- to long term. This fund won third place for Best Selling Unit Trust 2019 for Principal Greater China Equity Fund – MYR at the iFAST Awards Night 2020.
If an investors seeking regular income and willing to take moderate risks for potentially moderate capital returns over the long term, you may consider Principal Asia Pacific Dynamic Income Fund, which won second place for the Best Selling Unit Trust 2019 at the iFAST Awards Night 2020. It aims to provide regular income by investing primary in the Asia Pacific ex Japan region, while achieving capital appreciation over the medium to long-term.
There is also the Principal Islamic Lifetime Balanced Fund, which aims to achieve medium to long-term growth in both capital and income by investing in permissible Shariah-compliant investments. This fund is suited to investors who want a diversified portfolio of investments that adhere to Shariah principles and are willing to take moderate risks for moderate capital appreciation.
In short, there’s no better time to start the EPF investment journey than now! For a limited time only, investors can grab the opportunity to invest via the EPF i-Invest platform and start diversifying your EPF investment portfolio while at the same time earn rewards through a promotion by Principal:
Earn up to 0.58% worth of eWallet credit from your total net EPF investment made from 11.11 to 12.12!
To participate in the promotion is rather easy. Simply invest a minimum amount of RM1,000, but do note that with higher investments, investors can stand to earn more rewards.
Click here to know more about the promotion.
You are advised to read and understand the relevant Prospectus/Information memorandum/Disclosure Document and its Product Highlight Sheet (if any). The mentioned documents have been registered with Securities Commission Malaysia (SC) who does not recommended or endorsed these products or services. A copy of the said documents may be obtained at our offices, distributors or our website at [www.principal.com.my]. Investing involves risk and cost. You should understand the risks involved, compare and consider the fees, charges and costs involved, make your own risk assessment and seek professional advice, where necessary. This advertisement had not been reviewed by the SC.
Did you find this article insightful?
77% readers found this article insightful