2007/04/24

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KUANTAN: The Securities Commission has released an alert to educate the public on ways to recognise illegitimate Internet investment schemes.

In a pamphlet available to visitors at the Permodalan Nasional Berhad’s Malaysian Unit Trust Week, the SC outlined the characteristics of an illegitimate investment scheme.

For example, they may offer investors a scheme that guarantees enormous returns without posing any financial risk to them.

They also tend to assure investors that they will receive returns as high as 30 per cent per month.

The company’s contact address may be based in countries where investors would be unable to ascertain its validity and status.
Investors would also find it difficult to find information on the company’s licence or of its existence in the webpages of any authorities.

Some may claim that their activities do not require a licence or that their licence was issued by another country.

Their offers are also available for a short time. They will also come with instructions to wire the money to a foreign bank account.

The SC also warned the public that the web pages may be designed in a professional manner to mislead investors, complete with details such as the latest share prices, market commentaries, market news and links to other financial web pages.

It added that should indiviiduals become involved in recruiting others, they could be found guilty of propagating illegitimate investment schemes.

NST Online » Frontpage

2007/03/12

Where will you will be when you’re 64?
Get a head start for twilight years

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A life of comfort and good health in retirement is not beyond the average Malaysian executive despite cases of some who ended penniless after wasting their Employees’ Provident Fund savings in poor investments. Financial experts say prudent investments in sound financial instruments can yield handsome returns in old age. ANIS IBRAHIM, SUGANTHI SUPARMANIAM, HEIDI FOO and PRESENNA NAMBIAR have the stories.

CAN a 35-year-old Malaysian executive earning about RM4,000 a month afford a comfortable lifestyle after retirement at 55?

This is a question often on the minds of those on the threshold of middle age but which seldom yields a definite answer.

Yes, it is possible to live the same lifestyle in 20 years’ time but it is going to cost a bomb.

One will need to have between RM1.4 million and RM2.8 million at retirement to maintain the same lifestyle depending on which financial planner one talks to.
Besides inflation, which will reduce the amount of items one can buy in 20 years with the same amount of money available today, there is also the astronomical cost of medical treatment in old age.

Malaysians will have to bear much higher medical costs in the twilight of their lives, especially so in the light of the longer life expectancy of Malaysian men and women of 72 and 76 respectively.

Despite the frightening prospect of not having enough money in old age, there is still good news for most: Good financial planning can ensure a problem-free retirement.

The first step to take is to realistically identify the lifestyle one wants at retirement and work towards attaining it.

The next is to identify the financial instruments to be used to accumulate between RM1.4 million and RM2.8 million by 2027.

Integral to this would be the savings one accumulates with the Employees’ Provident Fund — about RM500,000 for the person earning about RM4,000 at 35 years of age.

Financial planners suggest several ways of going about this including investing in the stock market, unit trusts and property, saving money in the bank and buying an endowment insurance policy.

But how much should one invest to live comfortably after retirement?

Some financial planners say one should put aside a third of the monthly income — or RM1,300 for a person taking home RM4,000 a month — for investments.

Others say 20 per cent would suffice if one cannot afford more.

While these may hold promise of a rosy future, there are unexpected pitfalls for the unwary, including the vagaries of the stock and property markets and the general economic condition of the nation.

For those who cannot expect as much monthly after retirement as they did while working, the EPF suggests that they work on estimated monthly financial returns of 40 per cent of their salaries.

This is based on the International Labour Organisation’s (ILO) “replacement rate” for salaries after retirement.

EPF officials say that while 75 per cent would come from their EPF savings, Malaysians would still have to depend on other sources of income for the rest.

Developed countries like the United Kingdom and the United States apply a replacement rate of between 60 and 75 per cent of the average monthly salary.

All told, the average 30-something Malaysian in the private sector cannot depend on his EPF savings to ensure a comfortable lifestyle in retirement.

You can also post your comments on www.monsterblog.com.my.

Opinion

Saturday August 12, 2006

NO INVESTMENT is without risk. You cannot get higher rates than that given by a bank without some risk. 

All unit trust investments must be monitored by the investors weekly. 

As soon as they have accumulated to the desired amount, the unit trust should be sold. 

It is not true that we have to leave the unit trust for a few years to see some dividends. 

Remember, fund managers make money for the company they work for. Without your funds they will have no work. 

L.B.L,  Petaling Jaya.  

Sunday September 17, 2006

BY SIMON KHOO

PEKAN: Malaysians should start to master the art of wealth creation in tandem with the country’s progress, said Deputy Prime Minister Datuk Seri Najib Tun Razak. 

Saying that the time had come for the people to seek economic independence by making smart investments, he urged them to learn to manage their financial resources to gain more wealth using a first-class mentality. 

“Having political power without economic independence will lead us nowhere,” Najib said. 

In this regard, he added, the Government would ensure a fair and equal distribution of wealth through institutions like Permodalan Nasional Berhad (PNB). 

“We will look after the rights of the bumiputras but at the same time, the rights of others will not be taken away,” he said during the opening of a PNB public awareness exhibition at the Sultan Ahmad Shah convention hall here yesterday. 

Najib said the Government would support the efforts by PNB in raising the equity of bumiputras from the present 18% to between 20% and 25% in 2010. 

The present RM60bil in funds held by PNB, he added, showed that it had been managed efficiently. 

“The Government will ensure PNB’s continuous success and is confident it will reach RM100bil over the years with new products,” he said. 

Najib said the people should start to find ways to increase their wealth by investing part of their income. 

Citing an example, he said those who have made an initial investment of RM10 in 1981 in one of the unit trusts and re-invested the annual dividend could have a present balance of RM2,700. 

“Imagine the situation if the investment amount had been much higher,” he said. 

Najib also announced that the PNB Unit Trust Week would be held in Kuantan next year.  

Monday October 16, 2006

BY YEOW POOI LING

YOU have RM500,000 cash in your bank and an array of investment managers, financial advisers and other intermediaries offering you a huge variety of investment options. 

How much return do you want? Capital guaranteed? Which markets do you want to invest in? Is it a good time to buy or sell certain equities?  

The decisions could be endless and daunting to many investors, said S&P NetWorth Advisors Sdn Bhd chief executive officer Paul W. Chan. 

He said there were mainly two sources of ideas for investment decisions – external and internal.  

External sources include current news, for instance high oil prices, events such as the North Korean nuclear test, magazine articles and brokers’ recommendations.  

The internal-source investor, on the other hand, focuses on his own financial needs and a personalised long-term strategy designed to meet those needs. 

His buy or sell decisions are based on what is required to ensure that his financial holdings are in accord with the game plan.  

“Investment professionals are only used to assist in executing decisions already made. Thus, current market fads, trends and so-called expert opinions are largely irrelevant to such investors,” Chan said.  

He said investment decisions were unlike other consumer spending decisions, which could be influenced by marketing and advertising activities.  

One frequently asked question is a variant of “Oil prices and gold are sky high, and I’ve read that many experts are sounding an alarm about stocks. Should I sell my funds?” 

Investor decisions on whether to cut stock holdings would depend on the market’s volatility, what the business magazines say or the direction of the interest rate regime, Chan said.  

“External sources will never tell you whether it’s a ‘good’ time to sell stocks as no one knows what the market will do in the coming months,” he added.  

While current events might provoke a review of one’s personal list of questions, they should not dictate the answers, Chan said, adding that investors should take ownership of their investments.  

“Watch out for the high entry cost of investment, understand its goals and time-horizon, the investors’ risk appetite, their age groups and portfolio diversification. Have a simple personal checklist to jumpstart towards investing with peace of mind,” he said. 

Singular Asset Management chief investment officer Teoh Kok Lin said investment products that used to be exclusive to certain investors were now “brought to the level of the laymen given market liberalisation.”  

For example, retail investors could now invest in commercial properties – which were not so easily accessible in the past due to the high capital required – via real estate investment funds (REITs).  

“Such a trend pushes investors to learn faster and adopt a better investment habit. While volatility risk is always present, investors have to understand their own risk appetite and improve on where and how to put their money,” Teoh said.  

Aseambankers Malaysia Bhd chief executive director Surachet Chaipatamanont said products were “retailised” for better accessibility and this included Islamic offerings.  

Islamic products are offered across the board for retail investors. The breath and depth of the market allowed “investors of all types to be offered Islamic alternatives,” he said.  

Chaipatamanont added that Islamic products, compared with conventional ones, provided more competitive pricing and “in most cases, higher returns.” 

HLG Asset Management chief executive officer Richard Lin Kwok Wing said the investment options for a fund of RM500,000 could include equity based unit trusts, bond based unit trusts and balanced funds.  

Hong Leong Unit Trust has 19 unit trust funds under its management, offering a diverse product range including a selection of syariah-compliant unit trusts, growth funds, equity funds, balanced funds, sectoral funds as well as bond funds. 

He said diversification was essential for any investment type to enable investors to customise the investments according to their objectives.  

For example, an aggressive investor could have higher exposure to shares and lower exposure to bonds and money market instruments while an investor with moderate risk could opt for a very small degree of exposure to shares with bonds and money market comprising the bulk of their portfolio, he added.  

Lin said investment decisions would depend on three factors – first, the risk appetite of the individual. “Risk averseness of investors varies in accordance to their age, income and marital status,” he said. 

Second, the investor’s investment objectives would be taken into consideration, emphasising the creation of value, return or growth. The third factor would be the investment horizon – the investor’s short, medium or long-term goals.  

Thursday November 2, 2006

By SUSAN TAM

KUALA LUMPUR: Malaysia should create more Islamic wealth management products to capitalise on the increasing interest from high net worth individuals from the Middle East. 

Member of the Central Syariah Advisory Council for Bank Negara and Securities Commission, Dr Mohd Daud Bakar, said it was time for Malaysia to take advantage of this interest by providing a range of products for investors. 

“Investors are increasingly interested in investing in this region. They are keen on sukuk products, equity-linked notes and structured products.  

Dr Mohd Daud Bakar (left) and Dr Tan Chong Koay at the fund launch.

“Equity-linked products are also appealing to all investors, retail and corporate,” he said at a briefing to launch the Pheim Asia Ex-Japan (PAXJ) Islamic Fund yesterday. 

Dr Mohd Daud is also president and chief executive officer of Amanie Business Solutions Sdn Bhd, which is the adviser to Pheim Unit Trusts Bhd, responsible for launching PAXJ Islamic Fund. The latter is a wholly-owned unit of Pheim Asset Management Sdn Bhd. 

Dr Mohd Daud said Malaysia should step up efforts to tap the global Islamic financial market, projected to grow from an estimated US$700bil in 2005 to US$1.4 trillion by 2010 and US$2.8 trillion by 2015.  

He said Malaysia had the adequate infrastructure to be an Islamic finance hub, but lacked the products to lure more investors. 

Pheim Group founder and director Dr Tan Chong Koay said the PAXJ Islamic Fund would give investors a chance to tap into high-growth investment opportunities in Asia and in the Islamic financial market. 

“We believe that Asian equities will emerge as one of the global asset classes that have the potential to deliver superior returns,” he said. 

Dr Tan said this was due to the strong regional economic outlook and renewed focus of corporations and governments in strengthening business fundamentals. 

“Also, there has been an increasing number of companies with capital appreciation potential, specifically in small to medium-sized entities,” he added. 

PAXJ Islamic Fund has an approved size of up to 200 million of RM1 units and is benchmarked against absolute annual returns of 7% in the long term. 

Dr Tan said up to 95% of the funds would be invested in syariah-compliant equities in South-East Asia. A minimum of 5% would be kept as liquid assets or cash, and could be invested in syariah-compliant fixed income instruments. 

He also said that to date, all the funds launched by the firm had outperformed their respective benchmarks since inception. 

The PAXJ Islamic Fund is the company’s fifth unit trust fund and the second syariah-compliant after Dana Makmur Pheim, a domestic balanced fund launched in 2002. 

Thursday November 9, 2006

This week, Yeoh Keat Seng discusses the pitfalls of investing in unit trusts and suggests an industry mechanism that would provide investors with greater depth when including this investment instrument in their wealth management portfolio. 

WITH an aggregate net asset value (NAV) of over RM50bil as at mid-2006, unit trusts have become a mainstream form of investment for individual investors.  

Over the last 10 years, the industry’s NAV has grown seven-fold and now represents around 7.2% of Bursa Malaysia’s market capitalisation compared with only 1% previously. 

The pace of the growth of the industry here should not come as a surprise, as it mirrors the experience in the developed markets. Unit trusts offer several advantages which suit the needs of retail investors, namely diversification at an affordable price, access to professional fund managers, assurance of liquidity and convenience. 

Yet anecdotal evidence suggests a gap often exists between what investors expect and what they get from investing in unit trusts. This may be due partly to some investors having unrealistic expectations, or advisers not setting expectations right at the beginning or offering advice that may not be sound, or industry players importing unit trust practices from elsewhere without accommodating these to our market’s structural differences.  

This article focuses on the gap in expectations arising from the peculiarities of investing in unit trusts in our market, and suggests a possible solution to the problem.  

Conventional wisdom says that investors should treat unit trusts as buy-and-hold instruments because by sticking to the same fund, they will enjoy better returns than if they continuously try to time their investments. For many investors though, the theory does not seem to apply in practice.  

There are several possible reasons for this. First, a buy-and-hold approach works only if the factors that have contributed to the fund’s performance remain intact over time. Very often though, they do not always remain so for very long. 

Also, fund managers change. In developed markets, the fund management process is often institutionalised, which means that performance does not usually fluctuate much when there is a change of fund manager. In our case, performance is often highly dependent on individuals rather than a process, and unfortunately, their tenure with a firm often tends to be shorter than the client’s recommended investment horizon. 

Fund sizes change. Many award-winning funds have been unable to sustain their performance as they grow substantially bigger. This is not to say that size is a handicap, but in certain cases where the investment mandate is very narrow, or where the securities are very illiquid, there is often an inverse correlation between size and performance. 

Second, some funds are not meant to be long-term buy-and-hold investments. While there is a diversity of sector and theme-based funds in developed markets, it is debatable whether such funds can serve the needs of the average Malaysian looking to invest passively in a unit trust fund here. 

A technology fund in the US would have an investment universe comprising hundreds of stocks in different sub-segments worth hundreds of billions of dollars. A similar fund here would only have a handful of alternatives, with depth and breadth sorely lacking. Such funds may be good for tactical allocation, but not buy-and-hold. 

Third, a rigid buy-and-hold strategy should not apply blindly regardless of market circumstances. Even within an individual’s recommended asset allocation based on his risk requirement, there is a case for lowering his equity weighing if it becomes obvious that the market is about to go through a bearish phase. 

Another argument in support of a more active approach is that buy-and-hold fails to take advantage of changes in market cycles and investment styles the market favours. Small caps did very well between 2001 and 2003, but under-performed sharply after that. Index funds significantly outperformed others in 2004 and 2005, but were laggards prior to that. 

At other times though, the long-term buy-and-hold approach stems from the conscious decision on the part of investors. In many cases, when advice to switch or cut loss is given, there is no follow through. Whether it is unit trusts or stocks, many investors have a psychological problem with realising losses, even when they agree on the fund’s likely under-performance.  

In my opinion, a fund of funds could provide a timely remedy for the problems faced by many of our unit trust investors.  

A fund of funds is a unit trust that invests in a number of other unit trusts.  

Its advantages are extra diversification and simplicity, but in this context, I believe another critical advantage is the availability of a fund manager to actively manage the underlying funds.  

The value add of a fund of funds manager lies in selecting the appropriate funds, monitoring them for changes which could affect their performance (e.g. fund manager and size), taking advantage of opportunities to make tactical allocations, and being disciplined about cutting losses or switching out when market situations warrant it.  

Just as many investors are better off letting unit trust managers manage their money in individual funds, there are others who are better off letting fund of fund managers manage their unit trust funds as a whole. 

There is, however, a possible downside to this approach if the fund of funds manager does not do his job well. In that case, what the investor risks ending up with is a highly diversified but very mediocre performer at best, or a long-term under-performer at worst because of the extra layer of fees charged.  

Fund of funds are not available here yet, but I believe there is room for them in this market, especially given the circumstances described above.  

Monday December 18, 2006
THIS is the second article in a series of articles by the Securities Industry Development Centre on smart investing. 

IN the usual interaction between a unit trust agent and an investor, you normally see an agent doing most of the talking and the investor mainly listening. Not many pertinent questions are asked by the investor except for the standard “How much dividend will the unit trust give out?” or “What is the minimum amount to start investing?” 

To fully benefit from your unit trust investments, you must be prepared to ask many questions. The answers you get from these agents can help you determine whether investing in a unit trust is suitable for your investment goals and objectives. It will also prevent you from investing in unit trust products that are not suitable for you but which some agents may be promoting to earn higher commission. 

Here is a list of suggested questions (not exhaustive, of course) that you should ask your agents.  

Is this unit trust fund approved by the Securities Commission (SC)? All unit trust products must be approved by the SC. To check on an investment product, call (03) 6204 8000 and ask for the Trust and Investment Management Department or visit SC’s website at www.sc.com.my.  

How long has the unit trust company been in business? What is its record or performance in giving the promised returns?  It is important for an investor to check out the background of a unit trust company, including the company that will be managing the funds (if the fund is being managed by external fund managers). Find out their record and the experience of the fund managers. You must take the effort to get to know the people to whom you are entrusting your hard earned money.  

Does this fund suit my investment goals and risk profiles?  You must first be sure of what your investment goals or objectives are and how much investment risks you can tolerate (investment risks are essentially situations that may arise which can cause you to suffer losses).  

Nowadays, there are many categories and types of funds in the market, each with its own benefits and risks (the higher the returns promised, the higher the risks you have to take). Hence it is important for you to understand the funds being offered and for you to choose a fund or funds that suit your investment goals and risk tolerance. For instance, if you want a consistent income, you must invest in funds that provide steady consistent returns. You should not be pressured by any agent to invest in a fund that is not suitable for you.  

What will happen to the money that I put in a fund? Where will it be invested?  Each unit trust fund has its own investment strategy to meet its investment objective. For example, for an equity fund that targets growth of capital, generally most of the fund’s assets will be invested in equities of companies listed on the stock market that have potential for growth rather than a blue-chip company that offers consistent dividends. As such, the former is riskier.  

On the other hand, a bond fund will invest most of its funds in bond products, which are low risk. It is, therefore, crucial for an investor to know which investment products/instruments the fund will be investing in, as this will have direct implication on the risk tolerance of the investors. If the fund is investing in high-risk investment products, the unit trust fund itself becomes a high-risk investment. (Check Question 3 too). 

How do I know that my fund is doing well? How can I compare it with other funds?  Each fund has its own benchmark (something you can compare its performance with), which is stated in the prospectus. You can compare the rate of return of your fund with these benchmarks.  

The common benchmark for equity funds is the Kuala Lumpur Composite Index (KLCI) while for bond funds, it is normally the average 12-month fixed deposit rate of banks.  

Alternatively, you can compare your fund with other funds of similar characteristics. For example, if you have invested in a bond fund, compare its performance with other bond funds.  

A more complex unit trust fund may have a more complex benchmark. 

How will I make money from this fund? (Capital gains? Dividends?) If you invest in unit trusts, your returns could be in the form of capital gains (if the price of units moves favourably) or dividends (if the management company announced any). Get your distribution agent to explain this and read the prospectus.  

Do I have to pay any fees or charges?  Every investment has a cost to it and investing in unit trust funds is no exception. Generally, unit trust management companies will impose distribution/transaction charges, such as sales charge and/or redemption charge, when you buy and sell units and imposes management fees and trustee fees annually for the services they provide. Your agent must explain this clearly to you. Read the prospectus for more details on the kind of fees and charges imposed.  

If I change my mind after I have invested in a fund, can I sell it back to the company and get a full refund?  Investors are given a “cooling-off period” so they can reconsider if they want to continue investing in the unit trust fund. Subject to conditions, a unit trust investor is entitled to a full refund if he decides not to continue investing in the fund within the “cooling off period.” “Cooling off” is your right! Details on cooling off are highlighted in the prospectus.  

How easily can I sell the fund if I need my money right away?  Unit trusts are liquid investments. You may approach your distribution agents and submit a redemption notice to redeem the units and get your money back. It’s important that you know when you will be getting your money back so that you are more prepared in case you need the money urgently. Ask the agent. Details on redemption are also available in the prospectus.  

Will I be getting any statement regarding my investment status from the management company?  Your monitoring process will be easier if you receive a statement from the management company regarding your investment status. Find out how frequently you will be getting such a statement. You must monitor your investments.  

Where can I get more information about the fund?  Most of the information about a unit trust fund is in its prospectus and annual report. Ask your agent for a copy of the prospectus and read it before investing. 

l The Securities Industry Development Centre (SIDC), established in July 1994, is the training and education arm of the Securities Commission (SC).   Its mission is to build human capital, guide investors in the capital market and develop investor education programmes to meet the objectives of the Malaysian Capital Market Masterplan and address national development needs. It is recognised as a premier training centre for capital market participants and regional regulators.  

Monday December 25, 2006

This is the final article in a series by the Securities Industry Development Centre on smart investing.  

1. Are you an easy prey for investment scams? Take this quiz to check your vulnerability.   You always associate investments with: 

a) 100% profits 

b) Guaranteed returns with no risks 

c) Doubling your money in no time! 

d) None of the above 

         

2. Which of the following statements BEST describes your investment philosophy? 

a) I will choose only an investment that gives high returns with no risk 

b) I will choose an investment that matches my risk tolerance 

c) I will choose an investment that can double my money in no time 

d) I will choose an investment that is highly recommended by close friends 

3. You have been offered a job as a trading executive in a foreign commodity broking firm. The job requires you to get as many clients as possible to trade in a red bean futures contract in Macau. You were told that the investment yields high returns in a short time.   Your clients will have to deposit RM3,000 as a margin deposit at your firm. Your commission will be based on the amount of money your clients deposit in the firm. What is your next course of action? 

a) Start looking for friends and family members to become your clients 

b) Check with the regulators immediately whether the firm is licensed to trade in red bean futures in Macau  

c) Try to invest in the red bean futures contract yourself to test your luck 

d) Find out more about the investment from your friends who are working in the same firm 

         

4. How do you verify whether a unit trust agent is authorised to promote/sell unit trusts? 

a) Request for his call card 

b) Request for his authorisation card issued by the Federation of Malaysian Unit Trust Managers 

c) Not necessary to verify as any person can promote or sell unit trust products 

d) Check for an authorisation letter from the unit trust company 

         

5. Your unit trust agent asks you to give cash to him so that he could buy unit trusts on your behalf. What do you do? 

a) Give him the cash 

b) Give him the cash and request the agent to issue a receipt immediately 

c) Pay him with a cheque in his name 

d) Refuse to give him any cash  

         

6. If you want to check a stockbroker’s licensing status, which of the following websites would be your source for the required information? 

a) www.thestockbroker.com.my 

b) www.sc.com.my 

c) www.licensedcompany.com.my 

d) www.licensedbrokers.com.my 

         

7. A close friend persuades you to invest in an exclusive offshore investment scheme that guarantees 200% return and tax-free. Do you? 

a) Agree to make the investment because you trust your close friend implicitly 

b) Request for written materials on the investment and invest once you have read them 

c) Check with the regulators to see if they have any information on the investment scheme 

d) Agree to invest only if your friend could show the advertisements or news on the investment scheme in the media or the Internet 

         

8. To protect yourself from investment scams, which of the following measure(s) would you adopt? 

a) Read and understand the investment prospectus and annual reports 

b) Seek advice from licensed financial professionals 

c) Be sceptical and ask a lot of questions about the investment 

d) All of the above 

         

9. You will invest in an investment scheme if: 

a) The promotional materials and company website look professional and impressive 

b) The company’s office is at a prestigious address and its name professional and impressive 

b) The company’s office is at a prestigious address and its name sounds official  

sounds official 

c) The company’s personnel wear expensive swanky suits and drive snazzy cars 

d) None of the above 

         

10. If you fall victim to an investment scam, you would:  

a) Do nothing and keep quiet 

b) Blame it on your bad luck 

c) Lodge a report/complaint with the relevant authorities immediately 

d) Pay an unknown person who claims that he can guarantee the full recovery of your money   Answers:  

1. d: If you associate investment with 100% profits, guaranteed returns and doubling your money, you are more susceptible to investment scams. Most investment scams promise high returns with no corresponding risks to entice people to invest in it. 

2. b: Your investment choices should match your risk tolerance. If you are a risk-adverse person, make sure you invest in a low-risk investment scheme. To find out about the risks of each investment products, contact your remisier or licensed investment professionals. 

3. b: Always check with the regulators e.g. Securities Commission or Bank Negara, to verify if a company has been issued a licence and has been allowed to offer or market investment products to the public. 

4. b: The Federation of Malaysian Unit Trust Managers (FMUTM) is responsible for registering all persons who want to market and distribute unit trusts. When dealing with such agents, you should request for his “authorisation card” issued by the FMUTM. For more information on agents, visit FMUTM’s website at www.fmutm.com.my  

5. d: Never ever give cash to your unit trust agent. Always issue a cheque to the trustee or to an authorised person as specified in the prospectus. That is why reading the prospectus before investing is important. 

6. b: For a quick check on whether a company has been licensed or authorised to conduct or offer investment activities, log on to the Securities Commission website at www.sc.com.my or call the SC’s licensing department at (03)6204-8000. 

7. c: Beware of investment companies that offer high yield investments and operate from offshore locations such Bahamas, Macau, British Virgin Island or any other exotic offshore locations. Scammers love to use these international locations to boost their credibility.  

8. d: Before investing, do some research and ensure that you understand what you are buying. Go through the investment scheme annual reports and prospectuses and seek assistance from your remisier or licensed financial professionals to fully understand the information disclosed in these documents. Contact the SC to verify if the company has been licensed or authorised to offer such investment schemes. 

9. d: A company may have an official sounding name with a prestigious office at a premier location, complete with a professional looking website, but that does not mean that it is legitimate. Always check with the SC first. 

10. c: If you come across or become a victim of an investment scam, lodge a complaint with the SC’s complaints department: Tel: (03)6204-8999, fax: (03)6204-8991 or e-mail: aduan@seccom.com.my,  

The Securities Industry Development Centre (SIDC) was established in July 1994, and is the training and education arm of the Securities Commission (SC). Its mission is to build human capital, guide investors in the capital market and develop investor education programmes to meet the objectives of the Malaysian Capital Market Masterplan and address national development needs. It is recognised as a premier training centre for capital market participants and regional regulators.