The Ultimate Guide to 11 DIY Investment Options in Malaysia

This article is about Do-It-Yourself (DIY) investment options available in Malaysia.

What do I mean by DIY? I mean investments that you can reasonably make behind a computer screen, while lounging at home in your pajamas. Investments that don’t take too much effort — because you know, you have a day job like me.

For example, I’m not including property here — because to manage properties yourself (e.g. buying, renovating, looking for tenants, collecting rent, repairs) takes a ton of effort. But I am including Real Estate Investment Trusts (REITs) — because they allow you to invest in properties easily.

I’m also excluding stuff that needs huge sums of money, contacts or “cable” — like the once-in-a-lifetime shares your friend wants to offer you for his food-delivery startup. Instead, this is all commonly available stuff that the average person can invest in.

I’ll also include links — so you can immediately click to learn more and maybe eventually sign up.

These are exciting times. Because not only are there so many more options for investors than the typical stocks and unit trusts our parents had — with the Internet/apps/and shameless writers like me — it’s easier than ever to get started.

I hope you find something new and interesting.

Why DIY Investing?

Firstly, the all-important question. Why invest yourself, when you can outsource it to someone else, like your father, brother, or financial adviser?

Well, because learning how to manage money is probably one of the most underrated skills of all time. And while many of us at least have some knowledge on how to save money, a lot of us lack skill in investing.

Reading and attending seminars can help. But really, the best way to learn is to take a small amount of money, and give it a try.

There’s nothing like having “skin in the game” to motivate you to learn.

DIY Lets You Earn More

The second reason why DIY is amazing, is because it allows you, the investor to potentially earn more money. Because every time someone (like an adviser or agent) helps invest your money, their fees reduce your profits — sometimes by a lot.

Remember, the more middlemen there are in any business, the more expensive it gets for you — the end user. This example has been quoted to death — but many people still buy unit trusts through agents and get hit by high (5%!) commissions. But just like how the Internet continues to remove middlemen from every industry, finance will eventually change too.

Finally, just because someone dresses nicely, talks well, and carries a fancy title at a licensed-company — doesn’t mean they’re better than you at making money. Another quoted-to-death piece of research: A bunch of monkeys were better at picking winning stocks than a bunch of highly-paid, highly-learned professionals.

And I get it, in an emerging market like ours, people often feel like they need to talk to someone before investing. It’s scary to think you might do something wrong and lose your money.

But what if you could learn and practice to a level where you’re confident of doing it yourself? What if you could take control of your financial destiny, instead of leaving it to others? Well, if you want to, come, let’s take the first step. Let’s dive into this exciting world of investment opportunities together.

Here’s (almost) every DIY investment opportunity available in Malaysia, ranked from least risky (as boring as your economics lecturer in uni) to most risky (feels like a roller coaster, except the thing flying up and down is not your hair — it’s your money).

1. Fixed Deposits

Ah, good old fixed deposits. What your mother and my mother feels most happy about putting money in. Fixed deposits are viewed as the safest of safe investments: You put your money in the bank for a fixed period, and they pay you interest for trusting in them.

Why is it so safe? Because the banks literally guarantee it — and the government will even pay you back, in the unlikely event the banks go bankrupt.

Typical Returns: 3-4% per year

How to Start: Most banks already have e-fixed deposits at their online banking portals. Log in to your account and apply directly online! (Alternately, you can go to the bank with your mother.)

Best Places to Compare/Learn:

1. GenXGenYGenZ (latest promotions)
2. iMoney (comparison table)
3. RinggitPlus (comparison table)

2. Bonds

If you’re the geeky type (like me!) that likes to read finance news, you’ll often see the words “bonds” and “stocks.” We’ll cover stocks/shares later, but bonds are traditionally viewed as a less-risky partner to stocks.

For example, you’ll also see a lot of “traditional investing” articles saying things like “80% stocks 20% bonds” when you’re young. And “40% stocks, 60% bonds” when you retire. The idea is to balance the higher risk in stocks by buying more-stable bonds.

What happens in a bond? When you invest, you’re basically lending your money to a company/government — and they’re paying you interest (because why should you lend them money for free?).

Typical Returns: 4-9% per year

How to Start: Up until recently, it wasn’t easy to directly invest into bonds in Malaysia (unless you’re damn rich). But now, you can:

1. Buy ETBS on the Bursa Malaysia Stock Exchange. (Minimum investment: RM 1,000. You’ll need a stockbroking account to do this. More at “Stocks” section below.)
2. Buy Bonds on a platform like Fundsupermart. (Minimum investment: RM 10,000)

Best Places to Compare/Learn:

1. Fundsupermart (about bonds)
2. CompareHero (about ETBS)

3. Amanah Saham

Amanah Saham are “Trust Funds” (similar to Unit Trusts) created by a government-linked investment company, PNB. And to me — these are some of the most underrated investments in Malaysia.

What PNB does is, they’ll take money from you and me, combine it into a monster (think billions of Ringgit) account — and then use that money to invest in things like stocks and bonds. And because they’re really good at investing, they make good money, and then pay it out (dividends) to you and me.

There are two types of Amanah Saham funds: Fixed-price funds and variable-price funds.

Fixed-price funds: ASB, ASW 2020, ASM, ASD, AS 1 Malaysia, & ASB2

Variable-price funds: ASN, ASN Equity 2, ASN Imbang 1, ASN Imbang 2, ASN Equity 3, & ASN Sara 1

The fixed-price funds are fantastic (no sales charge, and consistently-good returns!). But I can’t say the same for the variable-price funds due to their meh returns and high sales charges. I’d stick to the fixed-priced ones for now.

Typical Returns (Fixed-priced Funds): 6-10% per year

How to Start: The challenge with Amanah Saham has always been getting hold of them. The fixed-priced fund units are limited, and some even have race-based quotas. You can try getting units at the ASNB website. (Remember to sign up for an account first — by visiting an ASNB office or one of their agents, which includes banks and post offices.)

The other way to get hold of Amanah Saham is when PNB launches new funds. This is when you’ll see poorly-dressed aunties lining up to buy with thick bundles of cash. Don’t judge!

Best Places to Compare/Learn:

1. 1-million-dollar-blog (comparison table)
2. Jom Urus Duit (how to sign up in Bahasa)

3a. Special Note For Bumiputeras

For all my Bumiputera friends out there, congratulations — you have access to what might be the most generous investment opportunity of all time:

Every Bumiputera in Malaysia has the privilege to invest up to RM 200,000 into a special form of Amanah Saham, called Amanah Saham Bumiputera. You don’t pay any fees to invest in it, you don’t pay any charges when you withdraw your money, and it’s consistently given higher returns than other Amanah Sahams. What’s there not to like? (Unless you jelly…)

ASB is so special that banks will even give you 100% loans to invest in it, called ASB financing. This is probably the only time I would consider breaking the “never borrow to invest” rule.

p.s. Bumiputeras also have privileged access to ASD and ASB2.

Typical Returns (ASB): 7-10 % per year

How to Start: As above — like any other Amanah Saham.

Best Places to Compare/Learn:

1. iMoney (about ASB)
2. Loanstreet (ASB financing)

Even the great financial writer Pakdi himself once said:

“For Bumiputeras, maximize your ASB and Tabung Haji first, before anything else.”

3b. Special Note For Muslims

Not all Malaysian Bumiputeras are Muslims. But most Malaysian Muslims are Bumiputeras. While you think about whether my statement is true or not, allow me to propose another stellar opportunity open to Muslims: the Tabung Haji fund.

Technically speaking, Tabung Haji’s objective is to help Malaysian Muslims save for the Hajj and Pilgrimage. So it’s 100% shariah compliant. And even though it’s not as worldly-profit-focused as some of the other investments in this article, Tabung Haji still gives good dividends to its investors.

Typical Returns: 4-8 % per year (TH pays out 2.5% Zakat on behalf of its investors, which makes it really convenient for all you soleh Muslims)

How to Start: Open an account by visiting a TH branch, Bank Islam, Bank Rakyat, or TH’s mobile counters.

Best Places to Compare/Learn:

1. Jom Urus Duit (TH vs ASB)
2. Majalah Labur (TH vs ASB)

4. Unit Trusts / Mutual Funds

I have a love-hate relationship with unit trusts. The idea behind them is amazing — but funds in this country come with charges that are too high. I long for the day when a true low-cost fund manager like Vanguard comes to town.

Anyway, unit trusts are similar to Amanah Saham. A big group of investors (you and me) put their money into a gigantic fund, then the fund manager invests in stuff and hopefully makes money (and still takes his/her fees regardless of whether the fund goes up or down).

There are a huge number of unit trusts in the market, investing in lots of different things. So whether you wanna invest in South American bonds, European banks or commodities like Oil/Gold — you have lots of options. Take your time to choose a good fund and fund manager. (Hint: historically it’s usually the one who charges you the least fees.)

p.s. In case the huge number of options confuses you, Warren Buffett suggests the average investor would do well just investing in low-cost index funds.

p.p.s. Sometimes when you buy insurance, they’ll tell you there’s an “investment” or “savings” portion. Well, this portion is usually invested into unit trusts, plus a big fee.

Typical Returns: Because there are unit trusts for so many different things, it’s hard to give an “estimated return.” Also, the riskier/more volatile things we get into — the harder it is to estimate. Remember, even if something has given you 8% for the past 100 years, there’s no guarantee it won’t crash tomorrow.

How to Start: Sign up for an online fund platform like Fundsupermart or eUnittrust.

Best Places to Compare/Learn:

1. Business Insider, CNBC (articles about low-cost, index fund investing)
2. Loanstreet (general info about unit trusts)

5. Real Estate Investment Trusts (REITs)

You know what’s the real Number 1 investment in Malaysia? And by Number 1, I don’t mean the amount of money people have invested. I measure it by this: if you go to any random lecture hall, Starbucks, or office tower in Malaysia and shout out the words: “Hey mofos, I’m gonna invest in <xxx>!!!” how many people will think you’re crazy?

Well, if you shout out the words “Bitcoin” or “Stock Market,” a lot of people will cover their children’s ears and walk away. But this is what happens if you shout out “PROPERTY!!!”:

• 80% of people will silently approve (tho still think you’re crazy for shouting in public).
• 18% of people will have an internal debate about whether interest rates are too high, if rental yields are too low, or where’s the next “hot” area.
• 2% will walk up to you and say “Hey, can you teach me?”

But property investment has a few problems… like affordability and liquidity. How many people can afford the downpayment for an RM 800k new development? And then the liquidity problem: even if you manage to buy a property at 500k, and the market price in five years is 750k — how quickly/easily can you sell?

Because if you can’t sell or rent easily — then you’re gonna be stuck paying painful loans for a long time…

Thankfully, this is where REITs come in handy. They allow investors to easily invest in the property sector — but without liquidity and affordability issues. (They’re also really good for lazy people like me.)

Think of REITs like unit trusts — but instead of investing in other stuff, they invest into property like shopping malls, office buildings and hotels. The best thing? At least 90% of their profits must be paid back to investors as dividends.

Typical Returns: 5-7 % per year

How to Start: REITs are listed on the Bursa Malaysia Stock Exchange. Sign up for a stockbroking account to buy them. More at Stocks section below.

Best Places to Compare/Learn:

1. Dividend Magic (guide to REITs)
2. MalaysiaStock.Biz (list of REITs)

p.s. There’s also a special form of REIT for Bumiputeras called AHB.

6. Exchange Traded Funds (ETFs)

We’re getting into real mainstream stuff now… And before we talk about the ever-popular stock market, let’s talk about her low-maintenance younger cousin: Exchange Traded Funds.

ETFs are the beautiful love child between stock markets and unit trusts. Like unit trusts, they’re a gigantic pool of many investors’ money. And like stocks, they’re traded on stock markets. This makes it easier for investors to acquire or dump ETFs whenever they please (as long as the stock market is open).

What do ETFs invest in, you ask? You actually have many choices. For example, there’s an ETF that tracks the Top 50 companies on the US stock market. There are also ETFs that track the price of gold, or the Top 40 companies in Southeast Asia. (If you look overseas, there are ETFs that track everything — for example there’s even an Obesity Management ETF!)

An average investor would practically never be able to buy shares in 50 top companies in the USA. But an ETF does that for you. And because ETFs just look to track/copy/mimic something else, they don’t require a lot of highly-paid fund managers to make investing decisions. Important Outcome: ETFs are an economical way to invest.

For comparison’s sake, typical unit trusts in Malaysia charge annual management fees between 1.5-2%. ETFs here typically charge between 0.5-0.7%.

Typical Returns: Like unit trusts, this really depends on which sector your ETF is tracking. Higher risk, higher returns.

How to Start: Like stocks, ETFs are listed on the Bursa Malaysia Stock Exchange. Sign up for a stockbroking account to buy them. (If you sign up for a global trading account, you can gain access to ETFs or REITs on foreign stock markets too.)

Best Places to Compare/Learn:

1. iMoney (understanding ETFs)
2. Bursa Malaysia (ETFs listed in Malaysia)

7. Stocks / Shares

Moving on to the mainstream of mainstream investments: the stock market.

When you buy a stock, you’re basically buying a tiny piece of a company. And if the company does well and makes good profits (as you believe it will), its stock price should go up and/or the company will share some of its profits with you, by paying you dividends.

How do you choose the right company to invest in? When to buy and when to sell? Well, you could spend a lifetime and several fortunes studying these two topics.

There’s a huge amount of resources available (books, websites, videos, forums, groups, seminars, etc.) if you wanna learn more; even for a small market like ours. I’m no stock market expert, so I’ll leave it at this and share you some of my favorite resources to learn from below.

BTW — If the concept of picking individual stocks scares you, you can always fall back to ETFs or low-cost unit trusts.

Typical Returns: Too diverse to tell. For example, everyone’s favorite blue chip stock, Maybank went up from RM 8.20 (30th Dec 2016) to RM 9.80 (29th Dec 2017). That’s ~19.5% gain in one year. In the stock market’s last big crash however, Maybank went down from RM 9.44 (28th Dec 2007) to RM 5.15 (26th Dec 2008). That’s a 45% loss in one year. Play with the charts yourself here.

How to Start: Sign up for an online stockbroking account to gain access to stocks. I personally use Rakuten Trade and Hong Leong.

p.s. Remember the ETBS, REITs and ETFs we spoke about earlier? Signing up for a stockbroking account allows you to buy these too. And if it’s a global trading account, you can also buy foreign stocks.

Best Places to Compare/Learn:

1. Dividend Magic (quick guide to Malaysian stock investing)
2. Bursa Malaysia (stock market basics)
3. 1-million-dollar-blog (how to invest in foreign stocks)

8. Peer-to-Peer Lending

On to the fun stuff now. Now that we’ve covered mainstream investments, the next few investments we’ll talk about are either new, or considered “niche.”

The cool thing about these is they’re sexy, have cool websites, and can make you good profits. The bad news is, they’re risky — meaning there’s a higher chance you could lose your money.

First up is Peer-to-peer (P2P) Lending. Did you know there are already six licensed P2P Lending platforms available in Malaysia? These companies match Small and Medium Enterprises (SMEs) who need to borrow money with individual investors like you and me. They’re basically helping to collect sums of money from lots of people, and then package it into loans for these SMEs.

The SMEs get their loan (because you know, sometimes banks make it hard to borrow money), the investors usually get paid with good returns, and the platforms take a small fee. Everyone’s happy.

It’s a brilliant business model, and the good news is the Securities Commission of Malaysia regulates P2P Lending, along with her more mysterious older cousin Equity Crowdfunding described below.

Typical Returns: 10-14% per year

How to Start: Sign up at one of the six licensed P2P Lending platforms listed here. I personally use Funding Societies.

Best Places to Compare/Learn:

1. CompareHero (understanding P2P Lending)
2. LoanStreet (FAQs)

9. Equity Crowdfunding

There’s a saying that you need money and connections to make more money. Well, what if you don’t have much money, and don’t have connections? Traditionally, you’d find it very difficult to invest in an early-stage business (plus you’d also be more vulnerable to scams).

Interesting side note: By law, some investments are only open to “accredited investors,” meaning you have to be a certain amount of rich before you can invest. The first time I read this I was outraged: “WTF? Things that can make people rich are only legally available to people who are already rich?!

But why would anyone — rich or not — wanna invest in an early-stage business anyway? Well, if you had the opportunity to invest in Facebook before anyone knew about it, would you? Yes, the answer is of course potential profit: invest in something early, and when they go big and list on the stock market — suddenly your shares could be worth a lot.

Enter Equity Crowdfunding (ECF) — a way for the average person on the street to get into early-stage action. Like P2P Lending, ECF platforms help connect young businesses to investors. However, instead of getting paid monthly with interest, the investors are given shares instead.

What if the company goes bankrupt next year? Could those shares be worth millions in ten years’ time? That’s risk, and that’s potential reward…

Typical Returns: Too diverse to tell. Different for every investment opportunity.

How to Start: Sign up at one of the licensed ECF platforms listed here.

Best Places to Compare/Learn:

1. iMoney (how ECF works)
2. The Star (ECF and P2P Lending tips)

10. Gold, Silver & Precious Metals

Trivia: did you know that about 100 years ago, most developed countries in the world directly tied the value of their money/currency to gold? And I’m guessing many of you might find it disturbing that since 1971, money (a.k.a. fiat money as we know it today), isn’t backed by anything except trust in the government?

(Seriously, go read up on it — the government basically decides how much money it wants in the system, and implements policies to make this happen. Contrary to popular belief, monetary supply is not backed by how much gold, silver or vibranium currently sitting in the vaults of Bank Negara or the ex-PM’s house.)

But I’m getting distracted. What I meant to bring up was that historically, people have always had a liking for shiny metals like gold and silver — so much that they were used as money between people and governments. But now that we’re so used to online transfers and debit cards though, why would anyone still want silver or gold?

It turns out that a lot of smart people believe precious metals are good protection against inflation and uncertainty. Like if both the stock markets and bonds are crashing, where do you move your money to? That’s why you’ll often hear conspiracy theorists say: “There’s a big crash coming… buy gold now!”

How easy is it to buy? Due to the wonders of the Internet, thankfully there are now modern ways of investing in one of humanity’s oldest forms of money.

Typical Returns: If I could predict gold/silver prices — I’d be a billionaire.

How to Start: A couple of banks already provide online services to buy gold. Still waiting for silver and other commodities. You can also check out HelloGold app, which allows you to buy gold with a very small initial investment — as low as RM 1.

Best Places to Compare/Learn:

1. Investopedia (beginner’s guide)
2. Focus Malaysia (how/why do it?)

11. Bitcoin & Digital Currencies

Welcome to the end of the risk-reward spectrum. A wild and mythical place where fortunes are made and lost. Where things are so fluid and new that even governments are playing catch-up — scrambling to create laws around this new asset class.

What on earth is Bitcoin and why are digital currencies important? I could speak to you for days about this, but perhaps you’d instead like to read my full introduction here?

To me, buying Bitcoin and digital currencies is a lot more like venture investing than traditional investing. It’s investing with full understanding that it’s really early and price/technology/regulation/etc. can change overnight. Investing in this space is like choosing ten things, fully expecting that eight will fail. But that one success might change the world.

Bitcoin could go to zero, but there’s also a chance it goes up 20x. I’m a believer, but still realistic enough to understand it might fail (or take 20 years). A little bit like deciding whether to invest in Amazon (yes) or Excite.com (no) in 1998.

Reminder: I left this for last, because these are the riskiest of all the investments in this article. Please only ever invest money you can afford to lose.

Typical Returns: Not even gonna pretend this is predictable. (For example, from Dec 2017 to June 2018 — I lost about 60% of my portfolio’s value. On the other hand, from Sept 2016 to Nov 2017, I gained ~300%.)

How to Start: Most people get into digital currencies via an exchange/broker (who will help them convert money into Bitcoin or Ethereum). The best one for me is Luno.

Best Places to Compare/Learn:

1. Luno (What is Bitcoin?)
2. Upfolio (Blockchain & digital currencies explained using visuals)
3. Ringgit Oh Ringgit (FAQs for Malaysian newbies)

Conclusion: So How Do I Choose What to Invest In?

I’ve covered how to build your investment portfolio in this post, but for now, perhaps I can share my personal style:

For most of my life, I’ve been quite a conservative investor (e.g. leaving my EPF intact, and getting as much Amanah Saham as I can), but I also have investments in extremely-high-risk stuff like Bitcoin. So I’m not what you’d call a typical investor at all. Basically I have a highly-bastardized version of Nassim Taleb’s Barbell Investment Strategy.

I’m not suggesting you follow me though.

Again, legendary investor Warren Buffett suggests that for most people, investing in a low-cost USA Stock Market index fund is good enough. Take a portion of your salary every month, and dump it into the index fund. Then hold for the long term.

Update Dec 2018: Robo-advisors have now launched in Malaysia. They super-simplify investing, especially for people who don’t have time/knowledge. If you’d like to try, they’ve even got a special promo for you, my beloved reader. Click here to learn more. Click here for an exclusive promotion.

Other super-simple options: If you’re gonna choose just one investment over here, I’d go for Amanah Saham. I’m also gonna take the unpopular opinion that leaving money in your EPF retirement fund and allowing it to compound over decades is underrated.

Ideally though, my biggest wish is for you to figure out your own strategy. Think about your own strengths and weaknesses, do some research, learn from others — and then make your own investments. Start small, and learn from the experience.

I know this might sound daunting, but it isn’t something to outsource to anyone else. It’s something that you need to take responsibility for. Because after all, it’s your money.

And if you’ve made it all the way here, I’m pretty sure you have both some time and money to spare. Why not start today?

– – –

Please let me know if I’ve missed out anything. I’ll consider, and add it to the list if appropriate. I’ve intentionally left out:
1. Retirement schemes (e.g. EPF and PRS).
2. Things that are probably too complex for the average investor like derivatives, warrants and foreign currency swaps.  

This article contains affiliate links, meaning if you sign up for something I might get a small fee — but at no cost to you.

Pics from Pexels, Pixabay, Pexels, Pexels, Pexels, Pixabay, Pexels and Max Pixel.