What is an ETF?


What are the advantages of ETFs?


How to invest and where to buy ETFs?


Is there any risk?


You are advised to know the following before investing:



ETFs vs. Unit Trust Funds: Know the Difference
ETFs hold a basket of securities to track performance of a specific index. Unit trust funds also hold a portfolio of assets. Nevertheless, both funds have marked differences.
The main differences between ETFs and unit trust funds are:

Investing Objective

ETFs
Passively managed.
Designed to follow performance of an index.
No active selection of underlying securities and returns made by ETF fund manager.
ETF fund manager will closely follow performance of its benchmark index.

Unit Trust Funds
Actively managed.
Investors pay fund managers to select stocks (or other securities) in order to outperform a selected index.
Performance of unit trust funds depends on the fund manager's skills and the supporting structure provided by the fund management company.

Index Funds
Employ the same investing strategy.
The main difference is in the cost of investing (sales fees vs. ETFs brokerage charge) and the annual management fee.
Buy and Sell Transactions

ETFs
Listed and quoted on a stock exchange.
ETFs are bought and sold like stocks throughout the trading day.
Unit Trust Funds (including index funds)
Buy and sell via agents working for a fund management company or through institutional unit trust agents such as banks.
Purchases or redemptions are done at a single price at the end of a trading day as the price of units in a fund depends on the closing price of its components.

Cost to Invest
ETFs
There is a brokerage fee, clearing fee and stamp duty, similar to trading shares.
The annual management fee usually is less than 1% of the fund's NAV.

Unit Trust Funds (including index funds)
Usually impose an upfront sales fee between 3% to 5%.
Both funds typically levy a back-end charge or exit fee which investors pay when they redeem the fund.
Fund's annual management fee can be between 0.75% to 5% per annum of the fund's NAV.

Minimum Investment Amount
ETFs
Like shares, there is no minimum investment amount for ETFs.
Unit Trust Funds (including index funds)
Most unit trusts usually require an initial minimum investment of RM 1,000.
Subsequent investments are lower, typically RM 100.

Welcome to ETFs!

List of ETFs

Commodity ETF
TRADEPLUS SHARIAH GOLD TRACKER (0828EA)


Equity ETF
FBMKLCI-ETF (0820EA)
CIMB FTSE ASEAN 40 MALAYSIA (0822EA)
CIMB FTSE China 50 (0823EA)

Equity ETF (Shariah Compliant)
MyETF-DJIM25 (0821EA)
MyETF MSCI Malaysia Islamic Dividend (0824EA)
MYETF MSCI South East Asia Islamic Dividend (0825EA)
MyETF Thomson Reuters Asia Pacific Ex-Japan Islamic Agribusiness (0826EA)

Fixed Income ETF
ABFMY1 (0800EA)


PDF folder of all listed ETF
 eBrochure_eLnsert_ETF_list_281215.pdf ( 3.58mb ) Number of downloads: 59



This post has been edited by Avangelice: Mar 28 2018, 05:29 PM

reserves.....
sound interesting.....

I think we have an ETF thread in lyn already....don't we?
what does this different from others

I don't see it. hence why I took the initiative to open one to further educate esp when ETF sounds better than unit trusts

just googled and found many...
https://www.google.com/search?q=etf+lowyat+...iw=1920&bih=963

but yours looks more educational.....
well done....

to shoot off the first discussion, I currently hold a portfolio of unit trusts and stocks

Namely
Anita Bond fund
CIMB greater china
TA Global Tech
IDS

I would compare
Anita Bond Fund vs ABF Malaysia Bond Index Fund (ABFMY1)

cimb greater china vs dinasti vs CIMB FTSE CHINA 25

I'll do the cost calculation and risk assessment

the downside of unit trusts is the lag between purchasing and selling and receiving the money. with ETF I can combine both my foreign exposure to my Malaysian stocks allowing it move seamlessly to stock to bond.

looks like I may move

This post has been edited by Avangelice: Mar 28 2018, 05:36 PM

hmm, I think I saw similar thread somewhere before.

those were years before. Bursa KL has updated their educational stuff

interesting.. got an email from Bursa about ETF 1/2 day ago..
somewhat a rarity if you ask me

Ermm seem have a new edge to explore

cherroy why is my post reported?

That one is more towards international etf. Malaysia ETF nothing much to shout about. Give me an equivalent of vanguard which tracks the S&P500 with 15% withholding tax, and they can have my RM.

This post has been edited by Ramjade: Mar 29 2018, 12:37 AM

wait and view your study findings. thanks for sharing in advance.

I concluded my studies awhile back.

found out etf in Malaysia has bad liquidity, virtually nobody buys them, bad performance compared to unit trusts and also its just a handful.

better not bother

thanks for replying with conclusion upon hard study.

So UT, Stocks, and REITs are better choice to explore.

Hi all. Anyone have any thoughts on long term ETFs in Malaysia? I am interested in investing in one long term for retirement the same way people in US did. Or better I stick to equity mutual fund?

I notice there is myetf MYDJIA global titan 50 by i-Vcap that track top 50 companies in US. Any thoughts on this?

stay away from ETFs in malaysia. for the returns and liquidity you better stick to Reits, UTs or stocks

Thanks for the reply. But isn't that the point of ETFs - to track indexes & markets while mutual funds & unit trust are designed to beat the market? I thought the point of ETFs is track the market long term for low cost, and the low cost contribuying to accumulating returns is the advantage.

As for liquidity, please can you explain/share your experiences? Since ETFs is trades as stock in klci, should the liquidity at least equal to stock?

1. there's too little exposure of ETFs to the Malaysian retail market. not many understand what is an ETF

2. because of the above, there is very little to choose from compared to US

3. because of the two points above, you will face liquidity issues when buyers are very few and far in between.

4. because of the four points above, performance is lacking compared to UTs

While actively managed fund such as UT seems likely to beat the market (index), in reality most of them failed due to its high fees. The returns from UT is mostly below expectation over long term compare to index fund.

I understand your point is generally true but can you point toexample of actual return comparison of Malaysia unit trust Vs Malaysia index fund? I am asking because I like to invest in those fund available in Malaysia.

while waiting for his response...
may I kay poh abit....

found this on google....
Malaysia Unit Trust vs ETF, which one is Better Performing?
Author: Shane My | Publish date: Mon, 2 May 2016, 08:51 AM

Recently I came across a statistic that says only 4% of Mutual Funds in America were able to outperform the Market Index. That makes selecting a fund to invest in the United States is akin to searching for a needle in a haystack. The first question which appear on my mind was how many of our local unit trust funds were able to outperform the Kuala Lumpur Stock Exchange (KLSE) Index? How many funds in Malaysia that have outperformed the KLSE Index? This brings me to this blog post which I am about to share with you.
http://klse.i3investor.com/blogs/invest_made_easy/95755.jsp

Summary
Over in the United States, the general advice for investor is to pick ETF over Mutual Funds as tghe choice of passive investment. Apart from the under performing Mutual Funds as stated in the beginning of this post, charges and fees of Mutual Funds are rather high. These fees would ultimately eat into the total return of mutual funds resulting in further under performance.

However the strategy of picking ETF of Mutual Fund is not a practical strategy for Malaysia market. If a Malaysian investor were to invest into ETF over mutual funds, he or she would probably make a whole lot lesser as proven in the statistics above.

This post has been edited by MUM: Jul 10 2018, 09:34 PM

Thanks for the example.

I'd just like to say that ETFs are NOT illiquid due to the presence of a market maker. Market makers ensure that the price of an ETF is always close the the underlying assets and ensure liquidity. Even if no one else is trading, the market maker can buy from you or sell to you. As for returns, it depends on the ETF, ABFMY1 bond fund is standing at 4.22% average 10 year returns. They primarily hold Malaysian Government bonds. It's better than FD atm and it had an impressive 8% return for 2019.

4 Reasons To Consider Investing in Exchange-Traded Funds (ETFs) With Bursa Malaysia



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