BusinessTimes
THE unit trust industry plays an important role in channelling funds to the capital market and has a huge potential to develop, Deputy Finance Minister 1 Datuk Dr Ng Yen Yen said today.
In view that the savings rate in Malaysia is much higher than that in developed countries, the unit trust industry has the capacity to draw some of these savings and thus help grow the capital market.
It is estimated that last year about RM279 billion was placed as savings in Malaysia’s banking system by individuals as well as institutions, she said when launching the ASM Global Diversified Structured Fund in Kuala Lumpur.
“Malaysia’s savings rate is high, at about 35 per cent of the gross domestic product since 2000. This is much higher than that in the US, Germany, Japan and other developed countries,” she noted.
Ng said that with Malaysia’s economy remaining strong and with rising revenues, as well as well-grounded savings and investment rates, the growth prospects for the unit trust industry are bright.
“Until end-June this year, the net assets of the unit trust funds in the market were valued at RM146.6 billion or 13.47 per cent of the market capitalisation of Bursa Malaysia.
“Although this percentage is rising, it is still far from the 40 per cent that has been reached in the capital markets of developed countries,” she added.
To draw more investors to unit trust funds, Ng urged managers of unit trusts and their assets to come out with more innovative products such as structured investment products or protection of principal deposits.
At present, there are about 10 structured investment products that offer capital protection for investors, she said.
She also feels that the industry players must seek to fill the gaps in the market by developing product chains through packaging products with specific risk /returns risks that meet the demands of investors.
ASM Investment Services Bhd’s fund which Ng launched is a local onshore investment structured product denominated in ringgit with a total fund size of 500 million units at 50 sen each.
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