EPF withdrawal for unit trust investment – annual returns comparison table Part 1

Malaysia’s Employees Provident Fund (EPF or KWSP) has announced the removal of its 30% foreign fund exposure cap on Members Investment Scheme (MIS) commencing August 1 2016, permitting members to invest in unit-trust funds that are focused on overseas investments.


(note: see Part 2 HERE because not able to fit into 1 info-graphic)

EPF unit trust investment

That means some, but not all of the existing foreign-exposed unit trusts from multiple fund management companies have been approved for the MIS under the new amendment.

The foreign funds exposure threshold was liberalized to allow for asset diversification.

EPF unit trust investment – no change in withdrawal rules

No changes in terms & conditions for current rules of EPF unit trust investment under this new amendment. Withdrawal of EPF Acccount 1 for unit trust investment can be done on a quarterly basis – not more than 20% of savings in excess of the Basic Savings amount in Account 1. Investments under the MIS are on a voluntary basis, and provide members with another avenue to enhance their retirement savings.

EPF unit trust investment – informed risk-aware diversification

All this while, all EPF-approved investments are only in locally-exposed funds. Therefore, the cap removal is a great move to allow members to reduce geographical concentration risks.

It also means reducing your investment portfolio correlation to the local stocks market. We know that there is not really a good move to use EPF Account 1 to invest into fixed income funds, because leaving it in EPF would generate similar returns at lower costs. So most people sensibly into into equity funds.

EPF unit trust investment – i-Invest online platform to D.I.Y. (do it yourself)

Starting in Aug 2019, no more filling hard copy forms and no more thumb printing KWSP 9N forms!

Eligible Employees Provident Fund (EPF) contributers can now make informed investment in unit trust funds offered by EPF-approved Fund Management Institutions (FMIs), via the self-service i-Invest online platform within the i-Akaun (Member) portal.epf unit trust investment i-invest

“We are very excited about introducing i-Invest, as this digitally powered facility empowers our members to take control of their investments and make transactions at nearly zero cost,” said EPF Chief Executive Officer Tunku Alizakri Alias in a launch statement.

About i-Invest:

  • First pension fund anywhere globally to directly link members’ retirement funds to online investment services.
  • Front-load cost is nearly negligible as the EPF has mandated a maximum cap of 0.5% compared to the current 3% for offline and traditional transactions through unit trust agents or bank intermediaries.
  • i-Invest platform is equipped with tools to independently compare financial information to ensure right selection of unit trust funds that suit members’ savings goals.
  • EPF members can monitor their investment funds performance inside their i-Akaun, and screen the historical annual performance.
  • EPF members are empowered to transfer from their EPF Account 1 up to 30% of the amount in excess of Basic Savings, to be invested in the EPF-approved funds.
  • EPF members can also open an account to invest in unit trust funds with any FMI using this new facility.

There is this one gnawing problem with EPF unit trust investment…

Members may only invest in one unit trust fund house at a time, thus diversification is “slow” and not optimal.

It would be great if EPF can allow members to invest in multiple fund houses in one go, rather than just one and wait for a certain amount of time before investing in another.

For example, if you want to invest in say, global equities, we could draw RM10,000 to invest in five different unit trust funds from five different fund houses, exposed to foreign equities  at a time, it would give me better diversification immediately.

Note: please allow 30 seconds for the info graphic below to load fully

Top in 2016

  1. Affin Hwang Select Asia (Ex Japan) Quantum Fund : 12.02%
  2. Eastspring Investments Global Leaders MY Funds : 11.40%
  3. CIMB-Principal Greater China Equity Fund : 10.60%

Top in 2015

  1. TA European Equity Fund : 24.5%
  2. CIMB Global Titans : 24.24%
  3. Eastspring Investments Global Leaders : 21.24%

Top in 2014

  1. Public Far East Select : 15.39%
  2. CIMB-Principal Greater China Equity Fund : 14.87%
  3. Affin Hwang Select AsiaPac REITS & Infrastructure : 14.22%

Top in 2013

  1. Eastspring Investments Global Leaders : 35.89%
  2. CIMB Global Titans : 34.18%
  3. TA European Equity Fund : 31.26%

Top in 2012

  1. Affin Hwang Select Asia (Ex Japan) Quantum Fund : 27.42%
  2. Affin Hwang Select Asia (Ex Japan) Opportunity Fund : 23.89%
  3. Affin Hwang Select AsiaPac (Ex Japan) REITS & Infrastructure : 20.28%

Top in 2011 (the least negative annual return)

  1. Affin Hwang Select Asia (Ex Japan) Quantum Fund : 6.17%
  2. Pheim Emerging Companies Balanced Fund : -1.82%
  3. RHB Global Allocation Fund: -3.29%

Looking at the performance track record and consistency above, which funds would you choose to invest into?

Facts on EPF own investment and EPF unit trust investment for members

EPF itself allocates less than 30% of its AUM – worth approximately 700 billion ringgit (US$171.7 billion) as at December 31, 2015 – to investments abroad.

The MIS contributes a sizeable portion to the UTF industry’s total FUM. Unaudited figures by the EPF show that as at end-2015, 820,000 EPF members have invested up to 39.3 billion ringgit in approved EPF approved unit trust funds.

Malaysia unit trust industry has a total of 667.88 billion ringgit in AUM as at end-2015, according to statistics from Securities Commission Malaysia.

Source: The EdgeMarket Daily

How to invest and consolidate your EPF-MIS investment into 1 account for convenience using iFast platform

iFast platform is used by independent financial adviser such as us to manage clients’ investments.

iFast platform model

comparison of ifast vs other platform

What you can do if you are ‘stuck’ with an underperforming unit trust investment – EPF or cash

You can transfer to iFast platform used by independent financial adviser (such as myself), at zero costs, and subsequently move around among most of the funds (except Public Mutual) listed above – as and when needed, also at zero costs. Annual management fee applies though. Here’s a schedule for reference.

ifast xfer in

Miscellaneous useful info

  1. If you need to check the list of appointed fund management institutions for unit trust investment EPF members investment scheme, click here.
  2. If you need to check how much you can withdraw your EPF account 1 for unit trust investment now, use this EPF calculator without login into EPF website.
  3. While every effort is made to ensure the information on this is updated to the latest info from EPF, always cross check EPF website for all details on EPF members investment scheme (EPF-MIS)

Sources: TheStar, NST, iMoney

This Post Has 9 Comments

  1. @Liew

    Watch out for unit trust COST and its Price Earning. If the PE dividend is f*ck up, stop the sinking cost mentality and switch the funds with better PE. Or just dump it to cut all your loses. I am not sure whether you have added the 5.5% cost into your unit trust cost or not, the unit trust only pays you 0.005 dividend, 0.2506 /0.005 = 50.12 PE value. I.e. it will take MORE than 50 YEARS for you to recover your capital. Betting on the unit trust value growth with the market is WORST than investing in a stock or keep in inside EPF. Because a $1000 in EPF will not deduct 1.65% fees and it WILL NOT FALLS in value. While in unit trust, there are many things to beat : 1.65 management fees, falls in value, falls in dividends. All these will widen loses gap compare to EPF.

    1. moot, thank you for your comments. Do you know now that you can use EPF platform itself to totally remove the 5.5% cost (upfront sales charge)?

  2. My unit trust agent (left after one month I bought the mutual fund). She said, as long as I keep my public mutual small cap growth fund as long as possible, I will definitely be able to gain profit. I bought at 0.2506, since then it drops till today 0.2343.

    That’s my retirement fund n the only saving I have because I am a housewife.

    I am not able to generate income.

    I am so worry that I will never able to recover back my investment, at least( n have not included the high cost of management fees yet ).

    I think I have gone into depression again due to too much worries.

    1. Hi Liew, sorry to hear about your predicament, but what is your question?

  3. Hi CF,

    It is interesting in reading your article. As i have recently very upset and disappointed with my Unit Trust performance using my EPF money. i have noticed all my funds are averaging of 1% to 1.5% return after interesting in mutual funds more than 4 years. some of the accounts are even losing money since 2009 until now.

    So my questions is EPF giving us an averaging of 6% annually and mutual funds giving us averaging 1% to 2%, why should we invest in mutual instead?


    5/12/17” YEARS
    1 PUBLIC DIVIDEND SELECT FUND EPF 11-03-13 12,589.00 13,152.86 563.86 4.48% 4
    2 PUBLIC GLOBAL SELECT FUND EPF 21-12-16 4,000.00 4,164.57 164.57 4.11% 1
    3 PUBLIC REGULAR SAVINGS FUND EPF 14-05-12 41,339.00 48,167.76 6,828.76 16.52% 5
    4 PUBLIC FAR EAST SELECT FUND CASH 08-04-10 9,000.00 15,420.96 6,420.96 71.34% 7
    5 PUBLIC WORLDWIDE EQUITY CASH 26-12-09 4,000.00 3,632.40 (367.60) -9.19% 8

    These are some of my funds performance. What should i do? Should i just cancelled all my mutual funds are reversed the fund to my own EPF account since the EPF is giving us 6% rather than 1-2% return.

  4. Hi CF,

    Are you sure that one can only invest in one unit trust fund in one go? Because my UT agent always allocate for each withdrawal into 2-3 funds but still under the same fund management company. E.g. withdrawal amount RM10,000 allocated into fund A RM3,000, Fund B RM3,000 Fund C RM4,000.

    1. Hi Ammen, what I meant was invest into different funds from different fund management companies. Edited the article above for clarity. Thanks for dropping by and your comments!

  5. CF,

    Looking at the yearly performance tables of the funds under the EPF-MIS, it is disheartening to note that no fund has consistently appeared in the Top Three for consecutive years. Maybe if there is a Top Ten listing, maybe we can find some funds that are in the Top Ten over the years. As you no doubt agree, investing in funds under the EPF-MIS is to allow investors to try to find a fund that can provide consistent out-performance compared to EPF. Investors should not need to keep moving their investments around seeking performing funds to invest in.

    IMHO the need to rebalance investments should be used only for cash investments rather than EPF-MIS investments.

    Your thoughts on the above is greatly appreciated.

    1. Hi boss,

      I agree that frequent rebalancing makes little sense for EPF investment because once invested, it is neither ‘flexible’ nor ‘mobile’, except switching to other funds within the fund management company’s products. However, in practical scenarios, what will do is – if a client was invested into an underperforming funds from say, Fund House A, long time ago with another agent, I would offer him a 0% moving cost to restructure his portfolio by investing into whichever funds which we deem will continue to perform above average going forward. On the same note, if the verdict is to change to a different fund from a different fund house, then I’ll do a no-cost switch for client. Although it is a hassle in terms of paperwork and procedure (the invested EPF amount need to go back to EPF account 1, then out again at 0% charge), it can be done as last resort to cut underperformers.

      I think it is a bit unrealistic to expect a fund to perform top 3 in its category among its peers for more than 3 years; there are so many variables at play, including the fund’s investment team.

      And while I do not possess 10 years data (some funds may not even exist yet), a Top 10 funds for the past 5 years may be more viable. Already compiled it over here – http://askcf.com/epf-foreign-fund-return-table/ so check it out.

Leave a Reply

HowToFinanceMoney © 2011-Present. All rights reserved.