The Definitive Guide to Investing in Malaysia

The News Straits Times reports that young Malaysians have low financial literacy. This is very alarming and reflects our poor education system, which fails to teach this important skill. 

It is important now more than ever to learn about investing. Investing is an important skill to learn simply because there is a limit to how much work a person can do. A normal human typically works from the age of 20 to 50, and then the body will reach its limit. Thus, investing will enable you to have a source of income even after you stop working. 

This guide will provide a brief review of investment options in Malaysia, their returns and how you can start. Note that this guide is for beginners and I have excluded other riskier options such as Forex, properties and cryptocurrencies. In addition, I do not recommend unit trust funds because of the high management fees which can eat up your capital.

Table of Content

  1. EPF
  2. ASB
  3. Stock market
  4. REITs
  5. ETF
  6. Crowdfunding
  7. P2P Lending
  8. Robo Advisor
  9. Bonds
  10. Conclusion
  11. Investing FAQ

1. Employees Provident Fund (EPF, Malay: “Kumpulan Wang Simpanan Pekerja”)

EPF (Malay: KWSP) contribution is deducted from your monthly salary and saved for your retirement. These savings are comprised of you and your employer’s contribution plus the yearly dividend. The statutory contribution rate is currently 11% and your employer will contribute another 12% or 13% of your salary. Nonetheless, you can opt to contribute more.


EPF reports that its past 30 years return on average is 6.26% and its all-time return is 5.94%. 

EPF historical returns chart (Source: MyPF)

How to start

If you are already working, your salary will be automatically deducted and contributed to your EPF account. 

Further Resources

EPF’s website (Contribution)

2. Amanah Saham Bumiputera (ASB)

ASB is an investment scheme launched by the Malaysian government for Bumiputera. The investment fund aims to generate competitive and consistent long-term returns for the shareholders. Meanwhile, non-Bumiputera can invest in Amanah Saham Malaysia (ASM), although it has lower returns than ASM

How to start

You can register for an ASB account at your nearest local ASNB branch. 


ASB all-time return is 9.91% while its average 10-year return is 7.94%.

ASB Dividend Chart since 1990 (Plotted in R, Source: MyPF)

Further Resources

ASB Product Page

3. Stock Market

A stock is proof of ownership in a company. When you buy a stock, you own a piece of that company. If the company does well, the stock price goes up. In addition, if the company makes a profit, it will share its profit with shareholders in the form of dividends.

How to start

Go to the investment branch of local banks to sign up for a CDS account. For example, Maybank investments or CIMB investment. Alternatively, you can use online stockbroking accounts such as TD Ameritrade or IG.


Depends on which company, how much dividends offered and how the stock has performed. 

Further Resources

Bursa Marketplace

4. Real Estate Investment Trusts (REITs)

REIT provides an option to invest in properties by paying a smaller fraction of the real estate prices. REITs provide a way to invest in high-quality real estate, without having to deal with the risks associated with it. Similar to stock, when you buy REIT, you won a piece of a particular real estate. The main benefits of investing in REITs are their affordability and liquidity. Affordability because REITs only cost a fraction of the original real estate price. Liquidity means that units of REITs can be converted to cash quickly as these units are traded on the stock exchange.

How to start

Similar to stocks, when you sign up for CDS account, you can start investing in REIT.


Returns range from 8 to 20% depending on which REIT.

Further Resources

The Intelligent Investor

5. Exchange Traded Funds (ETF)

Exchange Traded Funds (ETF) combines the feature of an index fund with a stock. When buying an ETF unit, you buy a piece of a group of companies, rather than one company. ETF is suitable for investors who want to diversify their portfolio, without investing in any particular stock.

How to start

Similar to stocks and REIT, when you sign up for CDS account, you can start investing in REIT.


Returns range from 8 to 15% depending on which ETF.

Further Resources

The Bogleheads’ Guide to Investing 

6. Crowdfunding 

Crowdfunding is a method of financing a new business using small amounts of capitals from a large amount of people. Crowdfunding works by connecting people with new business ideas and other people who support those ideas. Examples of Malaysian crowdfunding platforms are Leet Capital, MyStartr and Crowdplus.

How to start

Click Further Resources below and sign up on one of the crowdfunding platforms.


There are many crowdfunding platforms, some focus on generating profitable business while others are social enterprises. Each crowdfunding has different returns. 

Further Resources

List of registered Malaysian crowdfunding platform

7. P2P Lending

P2P Lending is a form of lending between individual investors and companies, cutting the financial institutions role as the middleman. Businesses that rely on P2P lending are usually high-growth small and medium enterprises (SMEs). 

How to start

Click Further Resources below and sign up on one of the P2P platforms.


Depending on the company, P2P Lending can have returns ranging from 10 to 14%, with higher risk as well. 

Further Resources

List of registered Malaysian P2P platform

8. Robo advisor

Robo advisor is a service that uses algorithms to match a client’s needs with a specific investment portfolio. As the name suggests, the robo advisor relies on little to no human management. Robo advisor is suitable for people who want to invest but do not want to micromanage their investments. 

How to start

At the time of writing, the robo advisor platforms that have received approval from Securities Commission Malaysia are MyTHEO, StashAway and Wahed.

9. Other resources

There are many resources online to learn about investing. For absolute beginners, I will recommend the following:

10. Conclusion

Malaysia has relatively mature and diverse options for people looking to invest their money. Choosing which to invest depends on several factors such as your salary, returns and the risk associated with each investment. However, the most important thing is to start early. Compounding interest works wonder and you will be surprised how much your net worth will be after two and three decades. For specific investment instrument, I would recommend ASB as it has low cost and risk. Once you have maxed out your ASB, you can start diversifying in other investments.

11. Investing FAQs

I don’t have the time to learn about investing, what can I do?

Contribute more towards your EPF. EPF is deducted automatically from your salary and you can opt for a higher contribution per month. If your salary is RM2000, 15% contribution per month means it is RM3600 annually. With a 6% growth rate, your contributions will be around RM300,000 in 30 years. Most Malaysians do not have cash for your retirement and having that amount is definitely better than nothing.

When should I start investing?

Now. Starting earlier enables your money to increase exponentially via compound interest. I can emphasise this enough, the earlier you start investing, the more time your money has to grow. If you’re not willing to invest in the riskier options, start with ASB. For non-Bumiputera, start with ASM (Amanah Saham Malaysia).

Are these investments halal or Syariah-compliant?

Most of these instruments have both non-Syariah compliant and Syariah-compliant options including EPF. For ASB, there are debates around its status. Currently, the general consensus is it is halal although a portion of it should be contributed to zakat

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