The net asset value (NAV) of the unit trust industry is expected to chart 25% to 30% growth this year underpinned by growing investor confidence from improving global capital markets, according to Federation of Investment Managers Malaysia (FIMM) president Tunku Ya’acob Tunku Abdullah.

Abdullah
Tunku Yaacob

He said the 25% to 30% improvement in NAV for the year was a reasonable expectation, given the country’s strong economic fundamentals. As at end-June, the NAV of the industry was RM164bil, an increase of about 22% against RM134bil at end-2008. NAV refers to the value of the underlying assets held by a fund, minus liabilities.

“According to Bank Negara’s statistics as at April, there was more than RM300bil in savings and fixed deposit accounts. In view of the current low interest rate environment, some of these funds will eventually find their way into unit trust funds which offer better growth potential,” he said in an email reply.

Public Mutual Bhd CEO Yeoh Kim Hong said with risk aversion receding, investors were now selectively repositioning their portfolios to participate in the market uptrend. This had helped the industry pick up in terms of NAV and sales of equity funds, she said, adding that the company expected the industry to remain resilient in the second half year.

According to MAAKL Mutual Bhd CEO Wong Boon Choy, the soon-to-be-launched online electronic system, known as E-Pilihan Pelaburan Ahli (E-PPA) for the withdrawal of EPF savings for members to invest in unit trusts, will also help improve the industry’s growth. The new system is expected to cut the current withdrawal process time from one to two weeks currently to three to five days.

Tunku Ya’acob said investor education was essential to push the industry to a higher level as it was vital for investors to understand the merits of investing early and for the long term.

To better communicate the risk profile of each fund to investors, FIMM has introduced the Fund Volatility Factor (FVF) disclosure for unit trust funds of at least three years. The FVF is a measure of the rise and fall of a fund’s returns over a period of time relative to its average returns.

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