As the fund will open to subscription tomorrow, I did a quick search and found an excellent article from S. Dali stripping down Amanah Saham 1Malaysia facts and exploring some of its implications. A quick extract so that those who just want the AS1M facts don’t have to go too far

Amanah Saham 1Malaysia (AS 1Malaysia), an all-Malaysian fund managed by Permodalan Nasional Bhd (PNB). As of end-2008, PNB’s AUM of RM120 billion amounted to 18.1% of the total market capitalisation of Bursa Malaysia.

Amanah Saham 1Malaysia is a fixed price products sell at 1ringgit per unit, like ASB/ASW/ASM, it is an equity fund with around 70% or more (of fund size) exposure to equity.

The fund will be invested in Malaysian companies with its yield benchmark according to 5-year Malaysian government yields which currently hovers around 3.7 to 4.0 percent.

S1M will not be the biggest fund under PNB. ASB is the biggest fund so far with RM62bil fund in circulation (as per its annual report ended 31/12/08), even ASW has the approved fund size of RM14 billion. e) ASM and ASW2020 give out dividends based on the returns of their investment portfolios, which are 95% equity and 5% others. Their returns have been consistently above 6% over the years. However, this does not mean that it cannot go lower than 6%.

To my knowledge it is not capital guaranteed. The Securities Commission guidelines has it clearly defined that if its a GUARANTEED FUND – (1) A guaranteed fund is one which guarantees investors will get back the capital invested, with some returns (if any), or guarantees investors a certain investment return payable at a pre-determined date in the future. (2) The word “guarantee” must appear in the fund’s name. Where a fund does not comply with the requirements in this appendix, it must not use the word “guarantee”, or any other name which may imply some form of guarantee, in its name or in its promotional materials. Such a fund is prohibited from holding itself out as a guaranteed fund.

And those who wish to dig deeper can click on this link: Amanah Saham 1Malaysia – The Facts & Implications.

The Basics

Amanah saham is simply the Malay word for unit trust. The term is widely associated with unit trust schemes managed by Permodalan Nasional Berhad (PNB).

ASB was launched on May 1989 and may be the most popular unit trust scheme of PNB thanks to its open-ended structure and many benefits. Here more info on the ASB scheme and why it is so interesting:

1. Low-Risk
2. Capital guaranteed
3. Price per unit is RM1.00
4. Dividends are exempt of tax
5. No sales or redemption charge
6. Dividends are computed monthly, but are calculated annually
7. Open to Malaysian Bumiputras aged 18 and above. A Trust can be set up for those aged between 12 and 18
8. You can only invest up to RM200,000, but your balance can be higher thanks to compounding growth

All this sounds pretty solid by itself. But what really sets this fund apart is its Bumiputra specificity. Thanks to it, PNB will always strive meet Bumiputera’s interest by directing most of its profits to ASB.  This explains why ASB has consistently out-performed other PNB Schemes (ASN, ASN 2, ASW 2020, ASM etc.) and why the following performance are so good.

Fund Performance

As you can see, the returns are pretty juicy for such a safe scheme. ASB returns and flexibility offer a great venue for Malays to start investing and build up their equity. After all, such schemes were set up for just this purpose (A little history on Amanah Saham Nasional and PNB), and most Malays should take up this low hanging apple and have some ASB in their portfolio mix.

A few related articles:

• How to calculate ASB dividend and bonus
• Why Borrowing to Invest in ASB Is A Bad Idea
• Can You Purchase Amanah Saham Units Using Maybank2U.com?

Note No.1 – This article is not here to judge of the morality of the ASB schemes.

Note No.2 – There has been some discussion in the blogosphere about the Haram status of PNB’s scheme and ASB particularly. If such things are important to you, please do your background research and make sur ASB is following your investment principles.