How to Buy ETFs in Malaysia Easily and SAFELY

How to buy ETFs in Malaysia, you ask? You’ve come to the right place. Short for exchange-traded funds, these investments are gaining popularity and may be a better option than unit trusts.

So here’s a quick run-through some questions I sometimes get: (1) are ETFs a good investment, (2) are there good ETFs options in Malaysia, and (3) do I personally have investment in ETFs.

And the answers are, (1) yes, with caveat (2) yes, and (3) yes.

In this article, I’ll share why ETFs is a good investment (or not), how to buy ETFs in Malaysia, through which platforms (plus pros and cons of each), and answer some FAQs on buying ETFs in Malaysia. Let’s start with,

Is ETFs a good investment?

Yes. Yes it is. ETFs are awesome. It is recommended by many top personal finance experts I respect, including Sallie Krawcheck and Ramit Sethi.

Ellevest (where Sallie is the CEO) has the easiest-to-understand definition of ETFs:

“Exchange-traded funds (ETFs) are baskets of investments that resemble mutual funds, but trade on an exchange like a stock. They also tend to have low fees.”

The low fee part is important. Even Bursa Malaysia Exchange-Traded Funds page said ‘Lower annual management fees for ETFs compared to unit trusts makes ETFs economical to buy and to maintain in the long run.’

However, this is not a blanket statement – ETFs may NOT be a good investment if:

• You have not completed Step 3 in the 7 Steps to Achieve Financial Freedom in Malaysia guide
• You do not invest with long-term horizon (for short-term savings, use these Savings Accounts instead)
• You play around with Leveraged/Inverse ETFs without knowledge (those are for high-risk investors/traders)

How to Buy ETFs in Malaysia

There are 3 main ways to invest in exchange-traded funds in Malaysia. I’ve ranked them (loosely) from easiest to hardest:

• Via robo advisors
• The ones listed on Bursa Malaysia
• Via online investment platforms
• (Are there more? Let me know in the comments 🙂

Note: You can also buy ETFs via other platforms outside of Malaysia, but I wouldn’t recommend it. I don’t care if other people use it and claim it’s safe. I wouldn’t.

Not only it is UNREGULATED, it also requires you to open a foreign account before you can top up your accounts. It’s also messy and inconvenient, so ignore this option if you want to keep it safe and simple.

#1 – Buy ETFs via robo advisors

The easiest way to invest in ETFs in Malaysia is through robo advisors. This is a great method for most investors – just top up monthly or regularly.

As of time of writing, there are 8 robo advisors serving the Malaysian market – at least 1 of them will be perfect for you. See comparison between them in Ultimate Comparison Between 8 Robo Advisor in Malaysia article.

With robo advisors, you may not invest in just one ETF, but rather a combination of, depending on your portfolio (they will help you choose). For example, this particular portfolio has 65% allocation in Global Stocks, 20% in Emerging Market Stocks, Sukuk and Cash.

Pros of investing in ETFs via robo advisor:

• Amazing UI/UX. Easy to navigate and beginner-friendly
• They help you select which ETFs to invest in and/or % of ETFs in your asset allocation, based on your risk appetite and goals <— this is a HUGE pro!
• Access to ETFs in global markets
• You can automate monthly topup so it’s a nice way to invest passively. A set-and-forget system. This strategy is called dollar-cost averaging – arguably the best investment strategy there is
• No matter how many times you buy or sell ETFs, you only pay a set annual fee, calculated in %. It’s very straightforward and affordable

Cons of investing in ETFs via robo advisor:

• People who have excessive Domestic Ringgit Borrowing (local loans/debt) may not be able to open an account. BNM rules

#2 – Buy ETFs listed on Bursa Malaysia

The second way to invest in ETFs in Malaysia is to buy the ETFs listed on the Main Market of Bursa Malaysia.

As of writing time, there are 16 ETFs available, divided in the following categories:

• Commodity ETF
• Equity ETF
• Equity ETF (Shariah Compliant)
• Fixed Income ETF
• Leveraged & Inverse ETF (avoid this if you are new in the stock market/ investing in general, concentrate on Commodity, Equity or Fixed Income ETFs first)

You can read more info on each ETF listed on Bursa Malaysia in the Explaining Every ETF You Can Invest and Trade from Bursa Malaysia article.

Buying ETFs listed on the Main Market of Bursa Malaysia should be easy if you are already familiar with the stock-buying process. Just use your CDS account to find and buy the ETFs you want. If you don’t have a CDS account, you need to open a stock brokerage account first.

Pros of investing in ETFs listed on Bursa Malaysia:

• Options available for low risk, medium risk and high risk investors
• Access to Malaysia, China, US and some Asian markets

Cons of investing in ETFs listed on the Main Market of Bursa Malaysia:

• Unlike robo advisor, I don’t think you can make automatic monthly topups. Let me know if it’s possible
• You’ll be charged per trade so there’ll be some strategy involved. You don’t want to make small, but frequent trades = will lose a lot %-wise in fees
• You need to be aware of your own risk profile so you can pick the right ETFs for yourself

#3 – Buy ETFs via online investment platforms regulated in Malaysia

AFAIK, there are 3 online investment platforms that allow you to buy/sell ETFs easily in Malaysia:

• MIDF Invest (read my MIDF Invest review)
• FSMOne
• Rakuten Trade
• Moomoo

(Let me know if there are more online investment platforms that offer ETFs in Malaysia!)

Pros of investing in ETFs via online investment platforms:

• A LOT of ETFs options
• Access to ETFs in global markets
• You can also use the same online investment platforms to buy stocks in various markets, unit trusts (I use FSMOne to buy my PRS fund), bonds and more

Cons of investing in ETFs via online investment platforms:

• You’ll be charged per trade so there’ll be some strategy involved. You don’t want to make small, but frequent trades = will lose a lot %-wise in fees
• The fact that there is a LOT of ETFs options can also be a con. They may offer educational materials and selector tools but at the end of the day, YOU as the investor must know your own risk profile and investment goals
• I am not kidding about how many options there are. As of writing time, FSMOne alone offers 3,420 ETFs in their platform! (If this alone overwhelms you, just use robo advisor or pick ETFs listed on Bursa Malaysia)

FAQs Section on Investing in ETFs in Malaysia

#1 – Which is the best ETF in Malaysia

The best ETF in Malaysia is the one that suits your risk profile and diversification strategy. Are you a low risk, medium risk or high risk investor? Are you over or under-invested in particular markets?

If you don’t know, then I highly recommend using Option 1- robo advisors, or engage with a financial planner – they can suggest some suitable ETFs combinations suited for your portfolio.

#2 – Can I invest in gold ETFs in Malaysia?

Answer: Yes, you can invest in gold ETFs in Malaysia. Here are some ways:

1. Open a Wahed Invest account and open a Gold Portfolio. It invests 97.5% of the funds in TradePlus Shariah Gold Tracker (download Wahed Invest from Appstore/iOS and use my referral code ‘surbin1’ to get free RM10 bonus
2. Buy TradePlus Shariah Gold Tracker directly from your CDS account. It’s listed in the Bursa Malaysia Main Market
3. You can buy various types of Gold ETFs from online investment platforms

Note: You can also buy Silver ETFs in Malaysia, but only from online investment platforms

Are there other ways to invest in gold ETFs in Malaysia? Let me know in the comments 🙂

#3 – Can I invest in US ETFs in Malaysia?

Answer: Yes, you can invest in US ETFs in Malaysia. Here are some ways:

1. Open a Wahed Invest account and open a US Stocks Portfolio. It invests 97.5% of the funds in Wahed FTSE USA Shariah ETF (download Wahed Invest from Appstore/iOS and use my referral code ‘surbin1’ to get free RM10 bonus
2. Go to Ultimate Comparison Between 8 Robo Advisor in Malaysia article and see the Best Roboadvisory in Malaysia: Global Exposure section
3. Buy MyETF Dow Jones U.S. Titans 50 directly from your CDS account. It’s listed in the Bursa Malaysia Main Market
4. You can get various types of US ETFs from online investment platforms too (probably the easiest way to get the famous Vanguard S&P 500 ETF in Malaysia)

Are there other ways to invest in US ETFs in Malaysia? Let me know in the comments 🙂

#4 – Can I invest in China ETFs in Malaysia?

Answer: Yes, you can invest in China ETFs in Malaysia. Here are some ways:

1. Open a Wahed Invest account and open a China Stocks Portfolio. It invests 97.5% of the funds in VP-DJ Shariah China A-Shares (download Wahed Invest from Appstore/iOS and use my referral code ‘surbin1’ to get free RM10 bonus
2. Go to Ultimate Comparison Between 8 Robo Advisor in Malaysia article and see the Best Roboadvisory in Malaysia: Global Exposure section
3. Buy Principal FTSE China 50 ETF and/or TradePlus S&P New China Tracker and/or VP-DJ Shariah China A-Shares directly from your CDS account. It’s listed in the Bursa Malaysia Main Market
4. You can get various types of China ETFs from online investment platforms too

Are there other ways to invest in China ETFs in Malaysia? Let me know in the comments 🙂

#5 – What is the best ETFs investment strategy?

I maintain that for most people, dollar-cost averaging strategy is the best investment strategy they can use. How it works is:

• Put in RMxxx in Week 1, Week 2, Week 3… until Week 52 and repeat, or
• Put in RMxxx in January, February, March… until December and repeat, or
• Put in RMxxx in Q1, Q2… until Q4 and repeat
• You get the gist

AFAIK, only robo advisors (see #1) can automate this process – let me know if others can as well.

I myself primarily invest in ETFs through robo advisors (secondary: online investment platforms). Otherwise, you have to manually make the order yourself every week/month/quarter. Easy in theory, but easy to skip (speaking of myself).

Do you do ETF investment in Malaysia?

If yes, which ones? How long? How is it so far?

As for me, you can view my ETF performance via the robo advisor that I chose – see The Ultimate Wahed Invest Review article.

I’ll end this here. What tips, pros and cons related to investing in ETFs in Malaysia would you add in this article? Share in the comments so all of us can learn!