Unlocking Epf Unit Trust Investments: A Guide

The EPF i-Invest platform allows eligible members to invest in unit trust funds directly from their EPF i-Akaun. Unit trust funds enable individuals with common investment objectives to pool their money, which is then used by professional fund managers to make investments aligned with those objectives. While investing in unit trusts through EPF i-Invest can offer higher returns than simply leaving your money in your EPF account, it also comes with additional fees and charges, and there is a chance you could lose money. Before investing in unit trusts through EPF i-Invest, it is important to carefully consider the potential risks and rewards.

EPF i-Invest: an online platform enabling eligible members to invest in unit trust funds

The EPF i-Invest is an online self-service platform that allows eligible EPF i-Akaun users to invest in unit trust funds. The platform was launched in Q3 2019 and has since seen significant demand, recording approximately 25,000 transactions worth RM219.3 million as of April 2020.

EPF i-Invest enables eligible members to divert a portion of their EPF funds into unit trust funds offered by EPF-approved Fund Management Institutions (FMIs). Members can invest up to 30% of the amount in excess of their Basic Savings in Account 1, with sales charges capped at a maximum of 0.5%.

The platform provides tools to help members obtain and compare information, ensuring they select the right unit trust funds to meet their savings goals. Members can also monitor their investment funds, track costs, and view historical performance through their i-Akaun account.

Benefits of EPF i-Invest

The platform offers several advantages to members:

• Reduced sales charges compared to offline and traditional transactions through agents, resulting in lower costs for members.
• A wide range of unit trust options to choose from, allowing for diversification of investments.
• Digital accessibility through the EPF i-Akaun portal, making it convenient for members to research, buy, sell, and manage their investments online.
• Members only diversify their surplus savings, not their entire EPF savings, thus maintaining a balance between retirement funds and investment opportunities.

Things to consider

While EPF i-Invest provides an attractive opportunity, there are a few considerations to keep in mind:

• Returns and Performance: EPF guarantees a minimum dividend of 2.5% annually and has historically provided stable returns. Unit trust funds may offer higher returns but also carry the risk of lower performance. It is essential to research the past performance of the unit trust fund before investing.
• Risk and Protection: EPF savings are guaranteed by the federal government, ensuring your principal amount is protected. However, investing in unit trust funds through EPF i-Invest comes with the risk of losing money if the fund performs poorly.
• Fees and Charges: Investing through EPF i-Invest incurs fees such as sales charges, annual management fees, transfer fees, and redemption fees. These fees can impact the overall returns and should be considered when making investment decisions.

In conclusion, EPF i-Invest offers eligible members a convenient and accessible way to invest in unit trust funds, providing an opportunity to diversify their retirement savings. However, it is important to carefully consider the potential returns, risks, and fees associated with such investments before making any financial decisions.

Sales charges: the EPF enforces a maximum cap of 0.5% for online transactions

When investing in unit trust funds through the EPF i-Akaun platform, it's important to be mindful of the sales charges involved. The EPF i-Invest platform has a maximum sales charge cap of 0.5% for online transactions, which is significantly lower than the typical 3% charged for offline and traditional transactions through agents. This reduced sales charge makes investing through the EPF platform a more cost-effective option.

The low sales charge is a compelling reason why many EPF members opt to invest in unit trusts through the EPF i-Akaun platform. With this platform, members can invest a portion of their EPF funds in unit trusts, diversifying their surplus savings without putting their entire EPF savings at risk. It's important to note that this diversification strategy is only available to members with higher savings in their EPF accounts.

While the EPF i-Invest platform offers a capped sales charge of 0.5%, it's worth noting that the actual sales fee can range from zero to 0.5% of the transaction amount. This fee applies to members below 55 years old who invest through the platform. For those aged 55 and above, the platform can be used as a mode of withdrawal, provided they maintain a minimum balance in their account.

It's crucial to carefully consider the potential returns, risks, and fees associated with investing in unit trusts through the EPF i-Invest platform. While it offers a cost-effective option with a maximum sales charge cap, it's important to assess the overall impact on your retirement savings by taking into account other fees and charges that may apply.

Additionally, it's important to be an informed investor and actively learn about unit trust investments, especially if you plan to utilise the EPF i-Invest platform. Understanding the different types of unit trusts, their performance, and how they align with your investment goals is essential before making any investment decisions.

Unit trust funds: a vehicle for individuals, corporations and institutions to pool money for investments

A unit trust fund is a vehicle for individuals, corporations, and institutions to pool their money for investments. It allows those with common investment objectives to contribute funds that are then managed by professionals. These managers use the pooled money to make investments that align with the group's goals.

The unit trust fund model involves three key parties: the unitholder, the trustee, and the manager. Unitholders are those who invest money in the fund by purchasing units. The trustee is responsible for safeguarding the unitholders' rights and interests, holding the fund's assets, and receiving any income from those assets. The manager sets and implements the investment strategy and administers the fund.

In Malaysia, the EPF i-Invest platform enables eligible EPF members to invest in unit trust funds. This self-service online platform is accessible through the EPF i-Akaun (member) portal. It offers a range of benefits, including reduced sales charges, tools for comparing information, and the ability to monitor investments.

EPF members can choose from a variety of unit trust funds offered by EPF-approved Fund Management Institutions (FMIs). It is important to note that investing in unit trust funds carries additional fees and charges, and there is a chance of losing money if the fund performs poorly. Therefore, it is advisable to conduct thorough research and carefully consider the risks before making any investment decisions.

Eligibility: EPF members above 18 can open an investment account and invest 30% of savings in excess of basic savings

To be eligible to invest in unit trusts using EPF, you must be an EPF member over the age of 18. You can open an investment account and invest up to 30% of your savings in excess of the basic savings required in Account 1. This is known as the EPF Members Investment Scheme (EPF-MIS) or i-Invest.

The EPF-MIS allows eligible members to invest a portion of their EPF savings into unit trust funds. This scheme is designed to enhance retirement savings by placing a portion of EPF savings in Account 1 into investments managed by appointed Fund Managers Institutions (FMI).

It is important to note that contributors will need higher savings in their EPF accounts to participate in the EPF-MIS. The funds must also achieve a three-year simple average consistent return rating of 2.00, sourced from mutual and hedge fund analytics provider Lipper.

EPF's i-Invest is a self-service online platform that enables eligible members to choose from unit trust funds offered by EPF-approved FMIs. Members can monitor their investment funds, as well as look up information on costs, historical performance, and statutory requirements.

The i-Invest platform offers several benefits, including reduced sales charges (capped at 0.5% compared to 3% for offline transactions), tools to compare information and make informed investment decisions, and the ability to diversify surplus savings rather than the entire EPF savings.

Before investing, it is essential to carefully consider the potential risks and fees associated with withdrawing EPF savings to invest in unit trusts. While unit trust funds offer the potential for higher returns, they also carry more risk, and your money will no longer be protected by the federal government guarantee that applies to EPF savings.

EPF savings: guaranteed by the federal government, these savings are safer and don't incur fees

EPF savings are meant for your retirement. These savings are guaranteed by the federal government and are safer than other investment options. They are also exempt from tax.

The Employees' Provident Fund (EPF) is a retirement benefit scheme where both the employer and the employee contribute a certain sum every month until the employee is working. The EPF savings comprise the member's and employer's shares of the contributions, plus the yearly dividends. When you contribute 11% of your monthly salary to the EPF, your employer will contribute another 12% or 13% of your salary to your EPF savings. Either you or your employer, or both, may also contribute at a rate exceeding the statutory rates.

EPF savings are guaranteed by the federal government, and members are guaranteed to receive a minimum dividend rate of 2.5% per year on their savings. The actual dividend rates are based on the performance of the EPF's conventional investments. The EPF invests in a diverse portfolio to ensure that members receive dividends yearly. These investments include real estate and infrastructure, government securities, corporate loans/financing, debentures, bonds, and sukuk. The EPF's investment philosophy is "prudence", and it maintains a strict investment policy to safeguard members' funds from investment loss risks.

EPF savings are also safer compared to other investment options as they do not incur fees. While investing in unit trust funds can help boost your retirement savings, it comes with additional fees and charges that eat into your returns. For example, the Kenanga Growth Fund charges a 2% initial fee and an annual expense ratio of 1.59%. In contrast, the EPF has enforced a maximum cap of 0.5% sales charge for online transactions through the i-Invest platform, which is significantly lower than the 3% charge for offline and traditional transactions through agents.

In conclusion, EPF savings are guaranteed by the federal government, and members can have peace of mind knowing that their savings are safe and will earn dividends. While investing in unit trust funds can be a good way to boost your retirement savings, it is important to consider the additional fees and charges associated with such investments.

Frequently asked questions