Diving into Amanah Saham Nasional Berhad (ASNB) investments for Malaysians
If you are a Malaysian, chances are you would have heard of the famously touted ASB or ASM Fixed Price Fund. If you are lucky, your parents would have even stashed some funds in there for you since you were young. Why lucky? Read on.
As the story goes, people will flock to ASNB’s building (or their appointed agents/banks) and queue whole day so that they can invest into these fixed price funds. It is not guaranteed that you will be able to invest as there is a fixed available units for subscription – akin to closed-ended funds. This means that there is a fixed amount of units for each fund and (typically) the only way you can invest is when someone cashes out.
As part of my ever-evolving portfolio (shared separately here), I definitely consider ASNB’s fixed price funds to be part of my investment portfolio – the conservative section.
Who or what is ASNB?
ASNB is a wholly-owned subsidiary company of Permodalan Nasional Berhad (PNB), one of the largest fund management companies in Malaysia.
PNB was established in 1978 as part of the Malaysian Goverment’s New Economic Policy way back then. When we invest into ASNB funds, PNB is the one behind managing our money in terms of the how and what to invest in. PNB is our investment manager.
So where does ASNB come in?
ASNB was established on 22 May 1979 to manage the funds launched by PNB. They have a total of 14 Funds, of which 6 are fixed price funds and 8 are variable price funds – more on this below.
ASNB’s role is to ensure that these funds are properly handled, i.e. making sure that your investment is captured in the fund that you opted in, you get paid the dividends when it is due to you, etc. ASNB is the fund manager.
You may read all about it in the 139-pager master prospectus in ASNB’s website.
This post is NOT a sponsored post and is based purely on my experience and will be focused on the fixed price funds only.
What is Fixed Price Fund
I was pleasantly surprised when I first learnt of this. Let me explain.
We are most familiar with the variable price funds when we think about unit trust funds.
As an example:
When we invest RM1,000 into a fund, we are allocated 1,000 units based on the current value per unit of RM1.
If the market is doing good and the value per unit goes up to RM1.20, we can cash out our 1,000 units at RM1,200.
Similarly, if the market is bad and the value dropped to RM0.80, our 1,000 units will be only worth RM800 if we cash out.
Magic of a fixed price fund:
As the name suggests, fixed price funds means that the price will not fluctuate. These funds are fixed at RM1 for each unit regardless of how the fund is performing. This just means that I would cash out RM1,000 if I invested RM1,000 into this fund. No upside, no downside.
On top of that, there is no sales charge and no withdrawal fees! So you don’t lose your capital when you invest into these funds as compared to your typical unit trust funds.
Now, can you see the allure? *hint* FD *hint*
Are there fees then?
Yes, there are indirect fees.
- Annual Management Fee
- Annual Trustee Fee
These are charged indirectly because these happen in the background without you seeing anything. Treat it like a salary to the investment manager and some admin fee that is paid out of the total value of the fund. The returns or distributions that you see are after accounting for these fees.
The difference between ASB and ASM
There are 6 funds under ASNB’s Fixed Price Funds and can be broadly categorised into 2 – ASB vs ASM.
The main difference between the two is that
- ASB is only for Bumiputera
- ASM is open for all Malaysians
Performance of ASNB’s Fixed Price Fund
The next obvious thing we’d want to look into is the performance of these funds.
As they are fixed price, the main returns stem from the yearly distribution. Think of it as the interest that you would get from FD.
I have tabulated the past performance in the table below in % terms for ease of comparison:
| ASNB Funds | Year End | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| ASB | December | 8.25% | 7.00% | 5.50% | – |
| ASB 2 | March | 6.50% | 6.75% | 6.00% | 4.75% |
| ASB 3 Didik | June | 6.00% | 6.25% | 5.25% | 4.25% |
| ASM | March | 6.00% | 6.25% | 5.50% | 4.25% |
| ASM 2 Wawasan | August | 6.00% | 6.00% | 5.00% | 4.00% |
| ASM 3 | September | 6.00% | 6.00% | 5.00% | – |
All of the fixed price funds are giving pretty good returns, in my opinion. I do take note that the performance has been dropping year on year. On the other hand, it beats what FD gives us, yes?
How does ASNB fixed price funds generate returns for the distribution?
Looking deeper into each of the ASNB annual reports and product highlight, we can see that these funds has an asset allocation of:
- Up to 90% in equities
- Up to 50% in other asset classes
- Minimum 5% in cash or liquid assets
Feel free to look into the annual reports to understand what each of the funds invest in. For the last 3 years, the composition has been mainly 70% – 82% in equities. These equities are mainly large bluechip Malaysian stocks, such as Maybank, Tenaga, Petronas, Telekom, Sime Darby, etc.
The remaining portions will be in unit trusts, fixed income, and other assets.
Essentially, PNB uses the funds available to invest into defensive assets. The gains or returns from these investments will be distributed to unit holders (aka.. us) via the yearly distribution. These can be via the dividends obtained from the bluechip stocks, the profit from the sale of the shares in the market, and the payments from other assets such as fixed income instruments.
Worst case scenario, the investment do not make any returns and there will be no distribution for the year (i.e. no return for the year).
Since these are fixed price funds, the capital is not affected at all regardless of how the investments performed.
Opening an account with ASNB
If after reading thus far, you are convinced that you want to add ASNB fixed price funds into your financial position / portfolio, then let’s go through how can we open an account with ASNB.
There are two channels to open an account with ASNB:
- ASNB branch – If you’re in KL, it’s the big PNB building next to Tabung Haji
- ASNB agents – AKA any of the local banks + POS Malaysia
If you’d like to know my experience…
My Unpleasant Journey in opening account with ASNB Agents
The first one
I went to the RED ASNB agent and was greeted by a “Financial Planner” to explain what ASNB is. I mentioned to her my intention to invest into the fixed price funds.
Then the sales pitch came: “Since you don’t have an existing account, you cannot open a new account in the fixed price funds. There is no way to open a new account for fixed price funds. However, you are in luck, because PNB just released a new promo. If you put in RM30k into this package, RM10k will be put into ASM 3 and RM20k will be put into a variable price fund.”
2 issues with this. (1) It is a lie that she can’t open and (2) That new package is a genuine deal, but it involves the variable fund with sales charge and I guarantee she gets commission for selling this.
What’d I do? I walked off from the agent.
The second one
I went to the YELLOW ASNB agent. They have a dedicated ASNB counter. I was greeted by the person behind the counter and I made my intention clear that I want to invest into the fixed price funds. I was given the same, “it is not possible to open” BUT the big difference was they explained that there is a fixed quota and they can try but no guarantees AND they did not try to sell me any package.
Thus, I asked them to try put RM10 into any of the ASM funds. They managed to open an account for me, but did not manage to put in any amount. Counter guy told me to register on MyASNB online portal and try to invest through the portal. However, the issue here is… to register on MyASNB, one must have already invested into an ASNB fund over the counter. So, counter guy obviously did not know that.
This turned out to be a fruitless journey for me as well.
ASNB Branch – KL Main Office
By far the best experience, other than the queue of course. Took me half a day but I got what I wanted.
The staff there was very helpful and obviously they know their stuff. Once I told them I wanted to open a fixed price fund, they mentioned that I can give it a try and if it fails then just put RM10 into a variable price fund so that I can register on MyASNB App and start trying from the app itself. And no, they did not give me the “it is not possible” bullsh*t or try to sell me some package.
On the spot, I was able to invest into ASM and ASM 2 Wawasan. Once that was done over the counter, there is a separate desk that helps people with the MyASNB registration. So, I registered there as well.
If you ask me, save yourself the trouble to deal with inconsistent agent experience and go to the ASNB branch if you are opening an account.
Whatever it is, you MUST get an account open and an active fund (i.e. invested in any one fund) to get access to MyASNB App.
The Beauty that is MyASNB
Remember I mentioned people use to queue at ASNB or the banks to make additional investment?
This process has been miraculously removed with roll out of MyASNB as you can make additional investments immediately via the online web portal or the App itself!
I have very recently added my investment into ASM 2 Wawasan through the MyASNB app and it was very seamless.
Kudos to ASNB for the digitisation of their process to make life easier for everyone!
Of quota, availability and timing
“I heard that the fixed price funds have fixed units and it is near impossible to get any units”
Yes, that is true. It takes discipline, dedication and a whole lot of luck.
All ASM units are subject to availability of units. Take note that this is not the case for ASB and ASB 2. These two funds have a limit of 200k units per investor as opposed to the fixed units quota. So if you are a bumiputera, you definitely want to max this out before competing in the “availability” pool as it is much easier.
To be able to get any units at all for the 3 ASM funds, someone must sell their units and you snatch those units before someone else does.
Alternatively, you could also opt for the package deal that RED agent was talking about. It is definitely easier.
The Secret… Shhhh
I heard this from experienced people and also have tried a few times myself successfully (including the snapshot above): The 2 best timings to try to invest into ASM funds are (1) before & after festive seasons and (2) the week after distribution payouts.
Why? Because these are times when people cash out from their funds, hence creating an opportunity to invest. I personally try every half an hour between 9am – 12pm and 3pm – 6pm. Hence, having the MyASNB app whereby you can take 10 seconds to try out adding investments no matter where you are is so convenient.
Why I choose to invest into ASNB’s fixed price funds?
No, I am not joining the hype for the hype’s sake.
As I have done sufficient study into the nature of these funds (case presented in this post), it is easy to perceive the investment into ASNB’s fixed price funds (i.e. ASM, ASM 2 Wawasan, ASM 3) as a relatively low risk investment.
Reason being:
- The price per unit is fixed at RM1 means that my capital is preserved (in a way – with the only risk being PNB / ASNB going bankrupt or some drastic change)
- The returns are acceptable historically (better than FD rates)
- The investments are in defensive stocks and assets
Is it suitable for you? You will need to make your own assessment and how this can fit into your financial position & portfolio. Furthermore, this is a pretty good alternative for your cash in the current low interest rate environment (FD rate @ 1% – 2%)
Bonus Tip: ASM 3’s distribution payout is 1 Oct.
