The Affin Hwang Private Retirement Scheme is a mixed asset fund, which will invest a maximum 60% of assets into a portfolio of Shariah-compliant equities. The rest will be held in Shariah-compliant fixed income instruments such as sukuk, Islamic money market instruments and fixed deposit.
“More Malaysians are acknowledging the importance of saving early for retirement [and] there is growing pressure for us to keep innovating and introduce more retirement funds, especially ones that tick the boxes from an ethical and religious perspective,” said Chan Ai Mei, chief marketing officer.
With this launch, the firm aims to strengthen its presence in the Islamic wealth and asset management space.
Saving for retirement has become a big challenge for Malaysians, the firm said, citing an HSBC report that showed 81% of Malaysians are afraid they will be penniless in retirement.
Moreover, the head of the country’s Employees' Provident Fund recently said 80% of Malaysians who turn 53 this year are expected to live below the poverty line.
The new fund is suitable for investors who seek potential income and capital growth, and have moderate risk tolerance. It aims to achieve an annualised return of 5%-7% over a three-five year period.
Gifts, not returns
A recent Cerulli Associates report said Asian investors are looking for free gifts and not potential returns when buying retirement products.
Free gifts are viewed as the most important consideration in purchase of retirement products across all markets: China, Taiwan, Hong Kong, Korea, Singapore, Malaysia, and Thailand, the firm said.
Even as investors in the region do not view returns as more important, most look for guaranteed returns, said Yoon Ng, Cerulli's Asia research director.
“This seems to indicate that beyond the frenzy for free gifts, Asian investors do value returns if they are guaranteed," said Ng.