What Is a Fund Manager? Meet the 'Captain' Behind Your EPF & ASB Investments
•By Mahersaham Team
Artikel ini juga tersedia dalam Bahasa Melayu
Loading...
Have you ever wondered who actually manages the billions of ringgit in your EPF (KWSP) account every month? Or who decides where your ASB money is invested so you can smile when dividends are announced at year-end? The individual or team of experts behind these major decisions is known as a Fund Manager or Portfolio Manager.
If the world of Malaysian investing were a vast and turbulent ocean, a Fund Manager would be the captain of the ship responsible for bringing passengers (that is, you as an investor) safely to the destination of profit. However, this captain does not work alone; they are surrounded by an extremely strict safety system.
Technically, a Fund Manager is a licensed professional responsible for executing investment strategies and managing the buying and selling of assets on behalf of clients or large institutions.
In Malaysia, this profession holds high prestige. Not just anyone can call themselves a fund manager.
To become a legitimate fund manager, they must hold a licence from the Securities Commission (SC) under the Capital Markets and Services Act 2007.
Most of them hold world-class professional certifications such as the CFA (Chartered Financial Analyst).
Many retail investors assume that a fund manager''s job is simply sitting in front of fancy screens and buying stocks that are trending. In reality, their workload is far more complex and technical:
Before investing even a single sen, they will conduct Top-Down (global economy) and Bottom-Up (company strength) analyses. They meet with company CEOs, visit factory sites, and dissect annual reports to ensure the company is not a "shell company."
A fund manager must be skilled at allocating money among stocks, bonds, property, or cash. This is the key to risk management in Malaysian investing. If you put all your eggs in one basket and it falls, everything is lost.
They cannot chase profits blindly. Every fund has a "mandate." If their mandate is "Conservative" investing, they are prohibited from investing in excessively high-risk stocks. Their job is not only to seek profits but also to protect investors'' capital from being wiped out.
Read More Related Articles on Risk: [Introduction to Risk Management in Stocks]
In financial terms, Alpha refers to excess returns compared to a benchmark. If the market (KLCI) rises 5%, but your Fund Manager achieves 8%, then their Alpha is 3%. This is the skill that major investors seek.
This is the part rarely told to the public. Many people are afraid of investing in Malaysian Unit Trusts because they worry fund management companies will run away with their money. The reality is that a three-layer protection system exists:
A Fund Manager does not actually hold your money. Your money is kept by a Trustee (usually an independent major bank). The Fund Manager only gives instructions to purchase assets, while the Trustee releases the funds and holds the asset ownership certificates. If the Fund Manager''s company goes bankrupt, your money remains safe under the Trustee''s control.
A fund manager cannot act like a "cowboy" following their own emotions. Every major decision must be presented to and approved by the Investment Committee. This prevents the risk of misappropriation or excessive risk-taking by any single individual.
For Shariah-compliant funds, a dedicated advisory body monitors every transaction. They ensure each invested company follows the Shariah guidelines set by the SC. This provides peace of mind for Muslim investors.
You may have interacted with them without realising through your everyday instruments:
As an investor, you have a choice: Trade on your own (DIY) or let the professionals handle it.
Less Control: You cannot instruct the fund manager to buy your friend''s company stocks. You must follow the strategy they have established.
Management Fees: Their expertise does not come free. You need to pay management fees (typically 0.5% – 2.0% per year) even when the market is declining.
Many of you are now trying to be a "fund manager" for your own money and your family''s through trading applications. That is excellent for financial literacy! However, please hold on to this message:
"Professional fund managers work 10-12 hours a day just to analyse the market. If you can only spare 10 minutes looking at charts before bed, do not be surprised why your results are not the same as theirs."
As a retail investor, you have choices. If you have limited time but want your money to grow professionally, a fund manager through unit trusts or private mandates is a wise choice. However, if you wish to be the "captain" managing your own money, ensure you have the knowledge and discipline on par with professionals.
If you have large capital but no time, hand it over to experts through Unit Trusts or Private Mandates. However, if you have a deep interest and are willing to learn, start with a small capital to hone your own skills.
The Fund Manager is the backbone of our economic stability. They ensure that our retirement savings grow and that major companies in Malaysia receive the capital to continue operating.
Understanding the role of a fund manager will make you a more mature investor. You will begin to see investing not as "gambling," but as a meticulous science of risk management.
A fund manager or portfolio manager is a licensed professional responsible for executing investment strategies and managing the buying and selling of assets on behalf of clients or large institutions. In Malaysia, they must hold a licence from the Securities Commission (SC).
Not necessarily. If you have large capital but no time, a fund manager through unit trusts or private mandates is a wise choice. However, if you are interested in managing your own investments, you can learn and invest directly on Bursa Malaysia.
Fund managers in Malaysia are regulated by the Securities Commission (SC) under the Capital Markets and Services Act 2007. They also typically hold professional certifications such as the CFA (Chartered Financial Analyst).
Unit trusts pool money from many investors to be invested together in one fund, whereas a private mandate provides personalised investment management tailored to the needs of individual investors who typically require a larger capital outlay.
Understanding the role of a fund manager helps you make wiser investment decisions, whether you manage your own portfolio or entrust it to professionals.
Open your CDS account through Register CDS Account with Mplus to start investing on Bursa Malaysia.
Just starting to learn about stocks? Download the Free Stock Basics Ebook to understand the fundamentals of stock investing before you begin.
Further reading: