The Best Way To Safely Invest In Malaysia | Amanah Saham, ASB and ASM

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In this video, we’ll go into the specifics of Amanah Saham and ASB financing.

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This video is for people who want to invest their money in Malaysia but are not sure how to do it.

This will be the start of a series where we dive a bit deeper into each individual investment vehicle in Malaysia.

And today, we’re starting with the cornerstone of Malaysian investment, Amanah Saham.

Amanah Saham is a Malaysian investment fund managed by PNB — Permodalan Nasional Berhad, one of the largest fund management companies in Malaysia.

The funds in this investment includes Malaysian stocks (think the likes of Maybank, Digi, Sime Darby) and fixed income assets.

For now we only recommend their fixed priced assets (ASB/ASM).

The reason for this is you get a nice amount of exposure to the Malaysian stock market, while safely knowing that your investment will not decrease in value.

Yes, you heard that right.

You cannot lose money investing in ASB or ASM (unless they go bankrupt, which is extremely unlikely).

So, it is the perfect vehicle to stash your savings with a highly respectable return.

ASB is reserved for Bumiputeras, while ASM is available for all Malaysians.

Usually, ASB would provide a higher dividend percentage than ASM, but in 2019, both ASB and ASM provided an equal return of 5.5%

Think of the total dividend (sen) as percentages.

Assuming I had RM100k in my ASB account in 2019. I’d be entitled to 5.5% dividends or RM5,500 cashed in early January 2020.

Of course, this amount is prorated.

Which means that if I put the same RM100k on the 1st of December 2019, I’d only be eligible for 31 days worth of dividends, or RM46.70

No, you can’t cheat the system by putting in all your money on the last day of the year (trust us, we’ve tried).

Notice that the dividends have decreased in 2019, due to the Malaysian stock market suffering a bad year, being one of the worst performing markets in the world.

Despite that, ASB and ASM returned a commendable 5.5%, so kudos to them.

All in all, ASB & ASM are great options for those just getting the hang of investing.

The good returns and capital value protection make it a solid, low risk choice for all Malaysians.

We find this to be the perfect tool to stash my savings/rainy day fund since it’s you can withdraw your money by visiting your nearest bank.

They also have a neat auto-debit feature online to help with our recommendation of “Save first, spend later”.

ASB FINANCING

Note: This only works for Bumiputeras.

Onto the juicy bit, where the real returns are.

ASB is such a safe investment that banks are willing to loan individuals like you and I up to RM200,000 to invest.

Why would the banks do this?

Banks are in the business of making money. They charge you interest on the loan, while having close to zero risk.

If they are charging me interest, why should I take a loan? Isn’t it better to invest myself?

The key word here is leverage.

The bank is giving you RM200,000 in capital to earn dividends and in return, you pay instalments of around RM1,050 per month for a loan tenure of 30-35 years.

We recommend to always go for the longest tenure for more flexibility.

Example
Assuming ASB announces 7% dividends in 2020.

John has 1,050 per month to invest. John decides to put this into ASB directly every month.

At the end of 2019, he has RM12,600 in capital (1,050*12) and RM480 in dividends (calculation for this is slightly complex, so I’ll omit) for a total of RM13,080

Jane also has 1,050 per month to invest. Janes goes for ASB financing instead, taking the RM200k loan.

At the end of 2019, she receives RM14,000 in dividends and has paid off RM2,800 of the RM200k she borrowed.

This brings her total to RM16,800, a significant 28% more than John.

Now, 2 factors are incredibly key for ASB financing to work out:

1. Bank interest rate
2. ASB dividend rate

We suggest choosing the bank with the lowest rates , and only go for it if it’s below 5%.

2 additional perks to ASB Financing

1) You’re obliged to pay the loan installment every month. This is a way to “force” savings.
2) Being a loan, this is a great way to start building your credit score with

Let’s recap and give you simple steps that you can take right now so that you can gain something out of this video.

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[amirulsyahirah]

what a great video. easy to understand for absolute beginners.

[aliphrodway]

Did u know that every quarter there are always an ASNB year end? For example, ASB1 year end is December, ASB2 year end is March etc. Whats your opinion if every year end of each account, you take the capital and dividen and dump into the next account? So every quarter (December, Mac, Jun & sept) your capital & dividen will keep compounding every 3 month..
But have to compare with leaving in one account for full 1 year.

[BalrajSingh-ggqm]

Good video.
Thank you for sharing that info.

[spdfazar]

pray for higher 2020 dividend despite our current situation 🙏🙏🤲🏻

[kooipin]

I have better understanding after watching your video though I have ASNB account. Just sharing my personal experience, is better to open account in ASNB branch rather than bank:
1) no extra charges or processing fees being charged like banks do, I was asked to pay rm100 additional to open an account in bank
2) u can get ur online account set up done over kiosk in ASNB. I do not think bank has such kiosk
3) ASNB can open account and buy 1 of the fixed rate fund with min rm10; while bank will tell us the funds are full.
Just some experience sharing

[MillennialFinanceMalaysia]

Thanks for watching!

What are your thoughts on Amanah Saham? Do you have an ASB or ASM account?

[puneshasankar]

Hi! So informative, thank you for sharing. Would you mind sharing the name of the video for ASM?

[MrYogasuria]

Hi
Why you are saying invest in the FIXED PRICE instead of the VARIABLE PRICE
Because the FIXED PRICE has limited number of units