AS 1Malaysia fund may not meet target
PETALING JAYA: Amanah Saham 1Malaysia (AS 1Malaysia) fund, which was launched by Permodalan Nasional Bhd (PNB), may not hit its 10 billion units target before the Sept 30 deadline due to its low return, say market observers.
More than two billion units had been subscribed by 148,830 investors as at Aug 25.
UOB KayHian research head Vincent Khoo said 10 billion units was a difficult target to meet given the low return for such an equity income fund.
As stated in AS 1Malaysia’s prospectus, it is noted that the fund’s returns will be benchmarked against the five-year Malaysian Government Securities (MGS). The current yield of five-year MGS is about 3.7%.
Khoo said the return was slightly higher than bank interest rates but it was not as attractive as previous Amanah Saham funds.
“Some investors might be interested in this fund but the general public would look for higher-return funds,” he added.
Asked on whether the bumiputra allocation should be opened to others, Khoo said it could be a way to push up the take-up rate if the nonbumiputra units had been fully taken up.
The fund is open to all Malaysians, with an allocation of 50% for bumiputras, 30% Chinese, 15% Indians and 5% for other ethnic groups.
A fund manager from a local house also said that the 10 billion target was hard to meet as the return was relatively low.
“The risk is higher for an equity income fund while the return is lower. Hence, the risk reward does not swing to its favour. It is not really attractive,” he added.
Kumpulan Sentiasa Cemerlang Sdn Bhd director of research Choong Khuat Hock said the fund was not perceived as “attractvie” due to its lower return.
“There will still be some demand for the fund but the 10 billion target is really tough,” he said.
AS 1Malaysia is the fifth fixed price unit trust fund launched by PNB after Amanah Saham Bumiputra, Amanah Saham Malaysia, Amanah Saham Didik and Amanah Saham Wawasan 2020.
The equity income fund is similar to Amanah Saham Malaysia and Amanah Saham Wawasan 2020 and being highly liquid, there is no sales charge and is transacted at a fixed price of RM1 per unit.
Last week, PNB had announced the extension of the AS 1Malaysia subscription allocation deadline to Sept 30.
However, the maximum investment limit for subscription of the new units will be abolished after the 30-day offer ends today.
The original maximum investment limit of 50,000 units was imposed for investors aged 18 to 55 years and 100,000 for those 55 and above.