Invest in ASNB for 6% return - for Malaysians only

ASNB has 2 kinds of funds: Fixed Price & Variable Price funds. We are only interested in the Fixed Price funds where there's no Sales Charge and the NAV is always fixed at RM$1.00. These are "Income" fund types.

There are currently 6 Fixed Price funds where only 3 are opened for non-Bumi investors. There are:
1) Amanah Saham Malaysia (ASM)
2) Amanah Saham Wawasan 2020 (ASW 2020)
3) Amanah Saham 1Malaysia (AS 1Malaysia)

Based on the latest annual report published as of 11 October 2016, these are the comparisons:

As can be seen, the main holdings in the funds are all equities like Maybank, CIMB, Public Bank, Tenaga Nasional, Sime Darby, Axiata. These are all equities that can be found in Bursa - Malaysia stock exchange.

Though they invest in equities, these 3 funds are not "Equities" funds. They are "Income" funds. If it's listed as Equities funds, then the daily price will fluctuates and will show current market price. But for Income funds, the price is fixed at RM1.00 regardless of market condition.

When the market is good, they will give slightly more dividends/net distribution unit and similarly when market is down, it'll give slightly less. They employ a "smoothing" process so as to meet the funds objective which is "to provide regular and consistent income stream whilst preserving the unit holders' investment capital over a long term horizon".

Below is the dividends/net distribution unit given since inception:

As can be seen above, the dividends is still >6%, regardless of any event:
Asian Financial Crisis (1997-1998), 9/11 (2001), Internet Dot-Com burst (2001-2002), Global Financial Crisis (2007-2009). Though the dividends looks like getting lower each year, but it should be still in the area of 6%.

Source: http://www.vantharp.com/Tharps-Thoughts/Weekly_548_Oct_19_2011.htm

If you have read my previous article on Compound Interest (article here), we purposely use 6% so as to simulate how your money will grow under this environment.

If you have put RM$1,000 in 2006 in the Wawasan 2020 funds, without doing anything your money would have double by today in 2016.
And if you diligently top up your Wawasan 2020 funds $1,000 per year which is just $83/month or $2.80/day (kopi cost), your money would have grown to $16,434.

WHOptimized:
Invest in any of the 3 ASNB Fixed Price funds available, full stop!

The funds are limited and sometimes it's rather hard to buy. But persist and you will enjoy the one and only low risk funds that can continuously gives you more than 6% of interest yearly. 

Things to note:

• You can open a new account, subscribe and redeem your investment at any ASNB branches or agents namely Maybank Berhad, CIMB Bank Berhad, RHB Bank Berhad, and Pos Malaysia Berhad. Additional investment also available via online through Maybank2u, CIMBClicks, AffinOnline and RHBNow. Subject to terms and conditions. [source link]
• Minimum initial investment and minimum balance requirement is 100 units which is equivalent to $100.
• The best time to buy is after the dividends/net distribution unit is declared.
• The dividends is based on the lowest amount of units for the month. E.g. if in 1Jan you have 100 units. On 2Jan, you sold 40units (balance 60units). Then on 3Jan, you bought 200units (balance 260units). For the month of January, the dividend is calculated based on 60units only (the lowest in the month). However in February, if there are no transaction done, then the dividend is base on 260units.

=== Who's who ===
1) Amanah Saham Nasional Berhad (ASNB) is a wholly-owned subsidiary of Permodalan Nasional Berhad (PNB).
ASNB is a fund manager that decides where to invest for each of the funds offered and whom declare the yearly dividends/net distribution.
They do not hold any of the stocks or assets.

2) AmanahRaya Trustees Berhad (ART) is 100% owned by Amanah Raya Berhad with paid-up capital of RM1 million.
ART is a Trustee where it holds all the assets and capital that ASNB, as a fund manager, has invested. All investor's money and capital is held here.
Annual Trustee Fees:

• ASW2020 fixed at RM500,000
• ASM maximum RM300,000 (RM300,000 or 0.08% per annum of the VOF, whichever is lower)
• AS1M maximum RM800,000 (Up to 0.08% per annum of the VOF, subject to minimum of RM18,000 per annum)

3) Amanah Raya Berhad or AmanahRaya as we are known, is Malaysia's premier trustee company. AmanahRaya is wholly owned by the Government of Malaysia with 99.99% of its shares held by the Minister of Finance (Incorporated) and 0.01% of its shares held by the Federal Commissioner of Lands.
[Source: http://www.arb.com.my/en/index.asp?fuseaction=Content.View&ID=58]

So if you are worry if your money is safe, we should look at ART instead of ASNB as ART holds your money. Since ART is wholly owned by AmanahRaya which is 99.99% owned by Minister of Finance, we can more or less have a peace of mind that it's rather safe. Worst case scenario would be like 1MDB where Ministry of Finance will take over.
To understand more about "Trustee", can refer to this link from Investopedia.
=== End of Who's who ===