Investing Mutual Fund with your EPF

As promised previously in the article describing various functions of your EPF sub-accounts, in this post, I shall give a brief overview on how you can actually transfer your savings in your EPF account to a privately-managed mutual fund account of your choice.

Why EPF Investment?

Not surprisingly, since everyone who’s in the payroll contributes to it, the Employees Provident Fund is considered one of the nation’s biggest pool of fund. Since it would be seem to be a waste of resources not to make use of the experience private fund management companies, EPF has since listed about 40 Fund Management Companies to help manage the huge amount of fund.

What are the Pre-requisites?

Here are 3 main criterias to be eligible to invest your EPF savings in a privately-managed mutual fund.

1) Account 1 from your EPF must be more than RM50,000.
2) Only 20% of the excess from your RM50,000 is eligible for investment.
3) Minimum investment is RM 1,000

How Do You Apply?

The procedue is simple

1) photocopy of your NRIC (both side since your thumb print is needed for verification)

2) KWSP investment form with thumb print and some personal details

3) Fill up invesment forms from respective mutual fund companies.

Why The Hassle? Why not just keep everything in the EPF savings account?

Private mutual fund companies are doing only investment-related business. Their core competency are their investing experiences through professional fund managers and maintaining a very transparent relationship with the investors. Track records from various top performing mutual fund companies have shown that returns are usually very much higher than EPF.

Why Are Most People Still Not Doing It?

Most people, especially the retail investors who have experienced the ’97 crisis can tell you that the stock market is like a casino. There’s no way you can make money out of it. There’s no way you can outsmart them. And so grows the list of negative sentiments regarding “investments”.

Hence, regardless of how much facts and figures on how mutual funds can outperform the stock market, these people remain skeptical. Once bitten twice shy.

Some just can’t be bothered to go through the hassle of paperworks or seek advice from a skilled mutual fund consultant.


There are ways to protect your mutual fund investments from unwanted losses and several reasons why it’s the preferred vehicle to accumulate wealth. I shall go into that in the upcoming posts.

2006-01-12T04:13:19+00:00 January 12th, 2006|Malaysia Financial News|3 Comments


  1. shadowfox January 16, 2006 at 2:03 pm - Reply

    Why people not doing it ? haha, people are not dumb lar.

    KUALA LUMPUR, Jan 16 (Bernama) — Retail mutual funds registered for sale
    in Malaysia produced a modest average loss of 4.15 percent in 2005,
    according to an analysis conducted by Standard & Poor’s Fund Services,
    which provides fund research and analysis globally.

    Based on Standard & Poor’s data, the best-performing category in 2005 was
    Fixed Income with the average return at 4.50 percent.

    This was followed by Money Market funds, with the average return at 2.39
    percent, it said in a statement.

    Asset Allocation, which contains funds with investments in equity, fixed
    income, and money market securities, delivered an average return at
    negative 3.06 percent, it said.

    The average return on funds in the equity category was negative 7.84
    percent, it added.

    The Fixed Income Islamic sector was clearly the best performer in 2005
    with an average return of 5.44 percent, it said.

    Following close behind was Fixed Income MYR, which returned 5.03 percent.

    The performance of the Asset Allocation Malaysia Defensive Sector was
    respectable as well with an average return of 4.43 percent.

    Under-performing sectors over 2005 included State Funds Malaysia, with
    negative 19.56 percent return and Smaller Companies Malaysia with
    negative 17.74 percent, it said.

    Despite rising interest rates and oil prices, most global equity markets
    and stocks in most sectors saw gains in 2005, it said.

    However, Malaysia’s Kuala Lumpur Composite Index (KLCI) went against the
    grain to close 0.8 percent lower in 2005, spooked by weaker corporate
    earnings, it said.

    Standard & Poor’s has a market weight rating on Malaysia.

    “We project moderate growth in equity value and have a KLCI target of 980
    for 2006. Inflation fears are likely to lead investors to companies with
    proven track records. We also expect dividend paying issues to continue
    to find favour,” said Lorraine Tan, Vice President at Standard & Poor’s
    Equity Research.

    Standard & Poor’s also forecast a 6.1 percent 2006 GDP growth for the
    Asia-Pacific region, driven by economic resilience in China and the U.S.

    Furthermore, the S&P Asia 50 index trades at attractive valuations
    compared with global peers, it reasoned.

    “We therefore believe the Asia-Pacific region offers growth at a
    reasonable price, and have a positive outlook for Asia-Pacific equities
    in 2006,” said Tan.

  2. yowchuan January 16, 2006 at 3:15 pm - Reply

    Indeed, this is ONE of the main reason why people are not doing it.

    People are very defensive, when it comes to losing money in the stock market/investments, to the extend where some become “eccentric” about it. They often cite how BAD the market is performing and how people are “burnt” by it.

    However, these are the very same people who usually never have any equity/stocks in their investment portfolio. Heeding advices from such sources is the same as asking directions from the blindman.

    As I’ve promised, I shall reveal some of the methods that can help you minimize your risk, but I don’t guarantee you will become a millionaire overnight.

    Stay tune, Shadowfox!

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