Types of Funds Managed by Fund Managers in Malaysia
Funds managed by fund managers typically mean that we hand over our money to be managed by someone else rather than managing it ourselves.
These funds may be pooled together with other people''s money (collectively) in a special fund, or the funds may be managed separately without being mixed with others.
Below are the products that share the common trait of being managed by professional fund managers, but differ in terms of structure, target investors, or function:
Unit Trust
Unit trust is an investment instrument that allows investors to pool their money to be invested in a diversified portfolio by a professional fund manager.
Each investor owns "units" in the fund, and the value of each unit changes according to the overall portfolio''s investment performance.
One of the most well-known unit trusts is Amanah Saham Bumiputera (ASB) — though ASB is rather special because the value of one unit trust share does not fluctuate — it always remains at RM1.
Private Retirement Schemes (PRS)
If Unit Trust is for general investment, PRS is a unit trust specifically designed for supplementary retirement savings.
- Your money is invested into funds (equity, bonds, or balanced).
- There are tax relief incentives (up to RM3,000 per year in Malaysia) and the money is typically "locked in" until retirement age (except for certain sub-account withdrawals).
Wholesale Funds
This is the "big brother" of Unit Trust.
- Funds are pooled and professionally managed.
- It is only open to Sophisticated Investors — such as corporations, institutions, or high-net-worth individuals (HNWIs). The entry requirement (minimum investment) is usually much higher, for example RM100,000 and above.
Private Mandate
This is a more exclusive service compared to investing through mass-market applications like I-Access.
- Experts help manage the buying and selling.
- The portfolio is custom-built according to the client''s requirements (customised). If you have a large capital, the fund manager will manage your account individually, rather than pooling your money in one large fund with other investors.
Exchange Traded Funds (ETF)
This is often considered the "cousin" of Unit Trust, but it is traded on Bursa Malaysia like a stock.
- It is a basket containing various stocks or bonds.
- The management fee is usually lower than conventional Unit Trust, and the price fluctuates in real-time during Bursa trading hours.
Alternative Investments
- Examples: Private Equity, Hedge Funds, or real estate.
- Characteristics: These instruments are not publicly traded on the stock market and typically carry more unique risks and returns compared to ordinary stocks or bonds.
Real Estate Investment Trusts (REITs)
Although many people buy REITs directly on Bursa, it is essentially a property trust fund.
- Function: It pools capital to purchase commercial properties (such as Mid Valley or KLCC). Investors receive returns in the form of dividends from the rental income of the properties, which are managed by professional managers.
Here is a summary in table form:
| Investment Type | Professionally Managed? | Main Focus |
|---|---|---|
| Unit Trust | Yes | General investment (Retail) |
| PRS | Yes | Retirement + Tax Relief |
| Wholesale Fund | Yes | Corporate investors / HNWIs (Large capital) |
| Private Mandate | Yes | Personalised portfolio (Customised) |
| ETF | Yes (Passive) | Low cost, traded like stocks |
Investing in funds managed by fund managers is highly suitable for those who lack the time or want systematic risk management.
However, for those who have the knowledge and desire greater freedom and more aggressive returns, direct stock investment still holds an appeal that cannot be replaced.
You can see here why many people still want to invest directly in stocks.
Start Your Investment Journey
Understanding the types of funds is the first step in investing. But to truly invest, you need to take action.
Learn More:
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Start Investing on Your Own:
Besides funds, you can also invest directly in stocks. Open a CDS account and explore the Malaysian stock market.