EPF’s annualized return is 5.63% in the past 6 years.

It’s (almost) risk free.

It has outperformed the majority of local unit trusts, including well known funds such as ASB, ASM, AHB, and TH.

If you’re withdrawing to invest, you have make sure that you can generate much higher returns.

It wouldn’t make much sense for you to invest in an asset that has similar returns to EPF but carries much higher risk. ⚠️

Though EPF’s returns are impressive, 5.63% may not be enough to retire nowadays.

This is especially true with inflation and the depreciation of the ringgit.

Actually, EPF allows you to invest up to 30% of your Account 1 in various funds, local and international.

Some of them generated 2x more returns compared to EPF in the past 10 years.

Read on to understand how to get started.

Under the Members Investment Scheme (MIS), those who have sufficient savings in their Account 1 can transfer part of their funds to invest in Unit Trusts.

These funds are managed by reputable fund managers such as:

• ASNB

• Public Mutual

• Kenanga Investors

• RHB Asset Management

• AHAM Asset Management

There are currently 299 funds supported by 15 fund providers, with exposure in Malaysia and the global market.

How much can I invest?

The amount you can invest depends on:

(Your Balance in Account 1 - Basic Savings of your age) * 30%

The Basic Savings is an amount that you would need to have in your Account 1 based on your age.

EPF determined these numbers to enable members to achieve a minimum savings of RM240,000 when they reach the age 55.

Eg. You’re currently 26 and have RM26,000 in Account 1.

You can invest up to: (RM26,000 – RM21,000)*30% = RM1,500

The minimum investment amount is RM1,000.

How do I choose the Best Funds?

Two important things: historic returns and consistency rating.

You want to select funds that have a good track record and perform better than EPF.

Look at the table below.

Even though Astute Malaysia Growth Trust had a better 1 year return compared to KAF Tactical Fund,

Historic data shows that KAF has better consistency.

However, note that past performances are not always an indicator to future returns. ⚠️

Use the fund selector tool to help you filter out what you’re looking for.

Search for Shariah compliant funds or set a geographical region (ASEAN, China, Global Market, the US, etc.) to invest in.

If you are young and can afford to take higher risk, you can toggle the “Volatility Classification” to “High” and search for growth funds.

You can even filter for funds with high consistency ratings.

Are there any Fees?

There are generally 3 types of fees for unit trusts:

• Sales Fee

• Annual Management Fee

• Annual Trustee Fee

The sales fee is an upfront cost that you’ll have to bear upon investing.

EPF’s i-Invest funds typically have a 0-0.5% sales charge, which is much lower than investing with fund providers directly. Public Mutual’s funds charge up to 5% upfront. 🥲

Meanwhile, the annual management and trustee fees can range from 0.40-1.80%.

They are charged based on the Net Asset Value of the fund, not your investment amount.

If the fund makes a profit, the size of it increases, thus the management and trustee fee will seem higher.

This is conversely true if the fund makes a loss.

So no, you won’t be charged 1-2% annually based on your initial investment amount.

In fact, the management and trustee fees are standard across the industry. Most mutual and unit trust funds set their annual fees at this range.

What if I want to withdraw?

You can “sell”, “switch”, or “redeem” your investments any time.

The sale amount will be credited back into your EPF Account 1, which can take up to 7 business days.

How do I get started?

• Login to the i-Akaun (classic) website.

• Select i-Invest

• Complete a one-time risk assessment

• Use the fund selector tool to search for funds

• Click on “Transactions” to purchase funds.

Important things to note

• The amount invested under this scheme is not entitled to EPF’s annual dividend.

• The available investment amount will be updated every 3 months.

• An asset with higher risk doesn't guarantee higher returns. ⚠️

Disclaimer: Investing in Unit Trusts is different from opening a deposit account with a financial institution. You should always speak to a financial planner before making any investing decisions.

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