You may scoff at the idea of getting into investments with just RM1,000. You might think, “What can I do with that meagre amount?” A lot, actually. You’ll be surprised at how much you can gain in years to come if you invest that money right now.
You don’t need to invest hundreds of thousands up front to see a healthy return.
Here’s a guide to where you can put your RM1,000 and see it grow.
1. Amanah Saham Bumiputera (ASB)
ASB is a premier unit trust investment specifically for Malaysian Bumiputeras. It is managed by Amanah Saham Nasional Berhad (ASNB), a wholly-owned subsidiary of Permodalan Nasional Berhad (PNB).
It is meant as a long-term investment. The longer you keep your money invested, the higher the possibility of better returns.
ASB has historically delivered stellar results, although its distribution rates have been declining in the past few years. Nevertheless, its relatively high returns make it one of the best low-risk investment vehicles in Malaysia.
Here are a few features of ASB:
- Low risk – ASB’s price per unit is fixed at RM1; has never delivered negative returns
- No sales or redemption charges
- Maximum investment amount: RM200,000
Risk: Low
Returns: 4.25% to 10% per annum
2. Employees Provident Fund (EPF)
Historically, the EPF has delivered decent dividends. In the past five years, it has generated returns of 5% to 6.4% a year. It also guarantees a minimum of 2.5% dividend for conventional (i.e. non-Shariah) accounts.
As an employee, you may already be contributing to your EPF savings. But did you know that you could increase make additional contributions? You can increase your mandatory contribution rate (ask your company’s human resources department for more information) or make an additional self-contribution to your EPF account.
If you’re self-employed or you don’t earn a regular income, you can also contribute to your EPF account through i-Saraan.Risk: Low
Returns: 5% to 6.4% per annum
3. Private Retirement Schemes (PRS)
The PRS is a voluntary investment scheme to help you save more for retirement. Under PRS, you can invest in approved unit trust funds that are managed by external PRS providers.
Like the EPF, it’s not easy to withdraw your investment funds. You can only withdraw for certain purposes, such as housing or healthcare – otherwise, you’ll incur an 8% tax penalty. However, this could help you avoid dipping into your investments.
The great thing about PRS is that you can claim tax relief of up to RM3,000 when you invest in PRS until 2025. Depending on your income bracket, you could save up to RM900 in taxes!
But when you invest through PRS, your investment returns aren’t guaranteed. There’s even a risk of losing money. PRS unit trust funds also come with upfront sales charges of up to 3%, as well as annual management fees of up to 5%.Risk: Low to medium
Returns: Depends on unit trust fund; as of time of writing, the top eight PRS funds produced annualised returns of 7.96% to 11.52% p.a. in the past five years.
4. Real Estate Investment Trusts (EITs)
Want to invest in property, but don’t have the capital to buy them outright? Consider investing in real estate investment trusts (REITs). REITs are trusts are formed by companies that purchase and manage real estate using funds pooled from shareholders. REITs invest in all types of properties, such as residential, commercial, industrial and retail properties.
Investors generally favour REITs because they offer high dividend payouts (typically 4% to 8%) compared to regular stocks. They are incentivised to pay out high dividends, as they need to distribute at least 90% of their income to be exempt from income tax. You can also gain profit from them through capital appreciation.
Like most long-term investments, you’ll need to invest your money over a long period of time to see meaningful gains.Risk: Medium
Returns: Depends on specific REIT
5. Unit trust funds
Unit trust funds are a form of collective investment. They allow investors with similar investment goals to pool their funds to be invested in a portfolio of securities or other assets. A professional fund manager then invests the pooled funds in a portfolio which may include cash, bonds and deposits, shares, properties and/or commodities.
If you have little capital, this is good news: it gives you the opportunity to invest in a diversified, professionally managed portfolio with (generally) a minimum of just RM1,000. With unit trusts, your return on investment usually comes in the form of income distribution and capital appreciation, derived from the pool of assets supporting the unit trust fund.
Investing in unit trusts usually involves costs like sales charges (up to 5%), platform fees, annual management charges, trustee fees and other charges. These charges can eat into your investment returns over the long run. However, investing via online platforms like Fundsupermart generally incurs lower charges.
Compare the performance of different funds to find the best one to invest on using our unit trust comparison page.Risk: Low to high
Returns: Depends on portfolio and funds
