All You Need to Know About Buying Unit Trust Through EPF i-Invest [SPONSORED]

According to an article published in The Edge portal, ‘as of April 2020, EPF i-invest had recorded approximately 25,000 transactions worth RM219.3 million’.

That is pretty significant, for two reasons:

• That means the average transaction size is RM8,772 (!! that’s bigger than I thought!), and
• It also means that there’s a lot of demand for buying unit trust through EPF i-Invest platform, considering it just launched in Q3 2019.

What is EPF i-Invest

So, EPF/KWSP (Employees’ Provident Fund/ Kumpulan Wang Simpanan Pekerja) is your retirement-earmarked fund. The 11% deduction to your salary every month (plus your employer’s 13% contribution) goes towards this fund. This part you already know.

EPF i-Invest is the self-service online platform which allows EPF i-Akaun users to divert part of your EPF funds in unit trusts.

Its selling points are easy to see:

#1 – Sales charge capped at 0.5% maximum

I believe low sales charge is THE reason why so many EPF members bought unit trust through EPF i-Akaun.

#2 – Lots of unit trust options offered

They started with five fund management institutions (one of which is the sponsor of this post, Principal Asset Management Berhad) and have since, at the time of writing, increased that number to ten.

(But of course, more funds = more headache during the selection process. We’ll cover a bit about the selection process further down this article)

#3 – Digital everything

Have you set up your EPF i-Akaun yet? This account is something you should have anyway if you’re on company payroll. Click on the ‘First Time Login Guide’ if you don’t have it yet, and EPF will guide you through the next steps.

All the unit trust-buying happens through the EPF i-Akaun portal. You can:

• do all the researching, buying and selling of unit trust there
• view your consolidated portfolio online
• find out your eligible investment amount automatically without manual calculations (see #4)

Side note: Check your EPF i-Akaun at least semi-regularly, just for your own financial planning.

#4 – You’re only diversifying your surplus savings, not your whole EPF savings.

You can only invest up to 30% of the amount in excess of the required basic savings in Account 1 as per your age (see table below).

As provided in Principal Asset Management’s General info section, a member aged 34 with RM118,926.56 (banyaknya. Kerja apa tu) in her/his Account 1 is eligible to invest RM20,077.97 in total, following EPF’s requirement.

What people say about EPF i-Invest

Whenever the subject of EPF i-Invest or investing EPF money in unit trust comes up in discussions (as it often does), a few types of people show up:

1. Those who can’t use EPF i-Invest because don’t have enough Basic Savings amount
2. Those who diversified their EPF money, and are happy with the returns
3. Those who diversified their EPF money, and are NOT happy with the returns (they tend to be very vocal)
4. Those who haven’t, and don’t plan to diversify their EPF money into unit trust (don’t want to take the risk with retirement savings, completely understand)
5. Those who haven’t, and are considering to diversify their EPF money into unit trust (got more than enough in Basic Savings and want to take advantage of incentives all)

People in the FIFTH category. Can we talk?

Being Realistic with Your Unit Trust Returns

As I was doing my research for this piece, a few key phrases jumped out. One of them is ‘for the informed investor’.

For. The. Informed. Investor.

Are you an informed investor? Do you have a selection process in mind, for this process of picking unit trusts? You know there are tens of unit trusts to choose from, right? Do you have the time to read each one, or have the resources to hire someone for advice?

To be a more informed investor, you have to actively learn about unit trusts investment, especially you want to do it the DIY way via EPF i-Invest (so you can enjoy 0% sales charge).

One place to start the learning process is through Principal Asset Management’s Knowledge Centre page.

So. For anyone considering to buy unit trust through EPF i-Invest. Be an informed investor. Know, at the very least:

• If the unit trust is Syariah-compliant or not (if it matters to you)
• Which region(s) is it investing in
• The risk ratings
• The different types of unit trusts (keywords to learn: money market fund, equity fund, balanced fund)
• And more, including the exact steps of purchasing the unit trust fund through EPF i-Akaun platform

Or you can go through the shortcut: Principal publishes monthly Investment Outlooks, which recommends funds by risk profile to meet your risk tolerance and expected returns.

All the best. Share with us in the comments section your experience with EPF i-Invest, so the rest of us can learn and be better and more informed investors.

Disclaimer: This article is sponsored by Principal through a collaborative writing process.