July 15, 2013

AmPRS Funds Explained



AmInvest PRSAmInvest is the fifth private retirement scheme (PRS) provider in Malaysia that launched their PRS funds on 2 April, 2013. AmInvest PRS scheme will have 3 core funds, namely AmPRS Growth, AmPRS Moderate and AmPRS Conservative. In this article, I will elaborate on the conventional PRS funds.

AmPRS Growth Fund is targeting those investors below age of 40 years old or have high risk profile. This fund will mainly invest in combination of equities, REITs, fixed income and liquid assets. Up to a maximum 70% of the fund can be invested in equities in the Asia Pacific markets. Out of this 70% equities portion, a maximum 20% can be invested in REITS. A minimum 30% of the fund will be invested in fixed income assets while a minimum 1% will be retained in liquid assets.

AmPRS Moderate Fund is targeting those investors between the age of 40 - 50 years old or have moderate risk profile. This fund will mainly invest in combination of equities, REITs, fixed income and liquid assets. Up to a maximum 60% of the fund can be invested in equities in the Asia Pacific markets. Out of this 70% equities portion, a maximum 20% can be invested in REITS. A minimum 40% of the fund will be invested in fixed income assets while a minimum 1% will be retained in liquid assets.


AmPRS Conservative Fund is a fixed income fund with a small portion of equity investment, is meant for those over 50 years old or have low risk profile. Uo to 80% of the fund will be invested in fixed income, of which 20% of the NAV will be in money markets. Up to 20% of the remaining portion of the fund can be invested in local equities. A minimum 1% of the fund will be retained in liquid assets.

The summary of AmPRS funds information is available below:



Note: If you need to open the spreadsheet in another tab, click here.


In my opinion, there are better PRS choices out there as compared to AmPRS. The disadvantages of AmPRS funds can be listed as below:
  1. High sales charge and switching fees of 3%, just as CIMB- Principal PRS.
  2. AmInvest is not very well known for their equity funds performance, as compared to their bond funds.
To know more information about AmPRS offerings, please visit the official site. To understand the difference between PRS and RSP, please visit this link.

July 8, 2013

Impact of new BNM Rulings on Household Indebtness

Household Debts
Due to the rising household debts as compared to GDP in Malaysia, Bank Negara Malaysia (BNM) recently introduced new measures to further tighthen credit lending especially on housing and personal loans as follow:
 
  1. Maximum tenure of 10 years for financing extended for personal use.
  2. Maximum tenure of 35 years for financing granted for the purchase of residential and non-residential properties.
  3. Prohibition on the offering of pre-approved personal financing products.
Now that we have these new measures, so what does it means to the people on the street? This is my opinion on the impact of new BNM rulings to the rakyat:
  •  Housing loans will be less afforable to the property investors/buyers, especially for the younger investors/buyers. With the shorten loan period, monthly installment is expected to rise and affect debt-to-income ratio, which is probably one of the factor financial institutions take into considerations.
  • Hopefully, the new measure can cool down/reduce the property market speculations, especially those developments without DIBS. Personally, i still wonder why Malaysian government hasnt banned DIBS as done by Singapore government few years back. In my opinion, DIBS is one of the factor that push property prices to beyond the reach for most of the rakyat.
  • Reduced availability of personal loans. A lot of youngsters and people in the lower income brackets are taking personal loans to cover for daily expenses as well as paying off credit card debts. With the introduction of such new measures are going to be painful to those people affected, but i do agree that such measure is needed to instill better financial management for the youngsters.
In summary, the measures are good for long term financial stability of the country. No doubt that it's going to be painful for those affected, but it's necessary to bring down household debts. I guess people needs to get the basic fact right: you must spend less than what you earn!

July 6, 2013

Making Sense of Money is back online!

Dear readers,

My blog, Making Sense of Money, was blocked by Google and flagged as scam blog by their bots for the past 6 months. If you were my faithful readers, you will know that my blog is for sharing of financial topics for the good of general audience.

Few days ago, I received good news from Blogger that my blog has been reinstated. So, there you go, my blog is fully back online! I will try to update as much information on my blog articles as possible for missing out much of the financial news for the past 6 months.

Do drop by from time to time for the latest financial news and knowledge! Cheers!

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