Tuesday, November 16, 2010

5 Reasons Why I Invested My EPF@KWSP savings in unit trust

Most of us know that EPF@KWSP members are allowed to invest certain portion of their EPF@KWSP savings in selected unit trust funds. But, not many of us are taking the action to start investing in unit trust using their EPF@KWSP savings. For me, at first I was quite reluctant to invest my EPF@KWSP savings in unit trust. But, after some investigation and further considerations, I decided to invest partial of my EPF@KWSP savings in selected unit trust funds. I listed below, 5 reasons which I considered good enough to convince me to start investing my EPF@KWSP savings in selected EPF@KWSP approved unit trust funds:

1) Higher return of investment
This is the main reason why I invested my EPF@KWSP savings in unit trust. Based on the average performance of my existing unit trust funds, the return of investment is much higher compare to the 5.65% dividend rate given by EPF for year ending 2009.

2) Lower sales charge
For most unit trust investment, the common service charge range between 5% - 6%. But, for investment from EPF@KWSP savings, the maximum service charges is only 3%. For long term investment, the difference of 2%-3% can mean quite a lot of money.

3) Take control of my own EPF@KWSP savings
Perhaps I can't take control of all of my EFP@KWSP savings, but at least I have a control of small portion of it. Over the long run, I hope this small portion can grow into something significant.

4) It's not the money from my own pocket
Sometimes it is quite painful to transfer some of our hard earned money from our own pocket into unit trust investment. Because there are risks in unit trust investment. So, EPF savings is another alternative. After all, I can't withdraw my EPF@KSWP savings till I am 55 years old. So, why not take some risk with a small portion of my EPF savings?

5) Free Takaful Coverage
There are some EPF@KWSP approved funds come with Takaful coverage. This is something really worth it - investment come with insurance coverage. But, of course, there are terms and condition to enjoy this benefits.

The above 5 reasons are solid enough for me to start investing my EPF@KWSP savings in selected unit trust funds. Anymore reason which I missed out? Do feel free to share with me.

However, must always bear in mind, all investment come with risks. We always hope to get higher and better returns from our investment. But, must be aware that there are also some risks that the investment might not be able to give us the type of returns we wish for. Prepare ourselves with these possibilities. Make sure we can accept these possibilities.

All the best in your investment!

Note: If you wish to know how much you can withdraw from your EPF@KWSP savings to invest in unit trust, click here. If you wish to know the list of approved unit trust funds for EPF@KWSP members' investment scheme, click here. Do take note, the list of approved unit trust funds can change from time to time.