EPF Investment Scheme

Unit Trust Schemes

• Maximum age for a qualified member is 60.
• Members cannot withdraw funds from the EPF once every 2 months.
• Investment cannot be made with any unit trust scheme.
• Balance in Account 2 is not eligible for this scheme.

Real Estate Investment Trusts (REITs)

• Income of REITs is mainly derived from rental income and capital appreciation of the property held by the trust.
• Portfolio of REITs cannot be switched to equities easily as the assets are not highly liquid.
• REITs are allowed to be listed.

Collective Investment Schemes

• A collective investment scheme is an investment fund that invests in a specific collection of shares.
• It is another term used to describe a unit trust scheme.

Unit Trust Schemes

• Annual report of a unit trust scheme typically includes:
  • Statement of assets and liabilities of the unit trust scheme
  • Auditor's report
  • Fund composition and statement of asset allocation
• Prospectus of a unit trust fund must be renewed every 2 years.
• Unit holders are entitled to receive a unit trust certificate or statement for their investment.
• Unit trusts are professionally managed by the UTMC.
• Value of a unit will fluctuate in line with the changes in the net asset value of the unit trust.

Investment Strategies

• A unit trust that has 80% of its assets invested in growth stocks is most appropriate for an 18-year-old's college fund.
• To minimize the impact of the initial service charge, investors should invest as regularly as possible and avoid lump sum investments.
• Adhering to a long-term buy-and-hold strategy, making sure that the units purchased match their long-term investment objectives, is the best way to minimize the impact of the initial service charge.

Net Asset Value (NAV)

• NAV includes the value of equity investments in the unit trust scheme, trustee fees, and auditor's fees.

FMUTM

• FMUTM (Federation of Malaysian Unit Trust Managers) is an organization that provides a common platform for UTMC to discuss issues related to the unit trust industry.

Investment Risks

• Risks of borrowing to invest in unit trusts include:
  • Interest rate fluctuations
  • Default in repayment of loans
  • Premature repayment of loan
  • Margin call
• Inflation rate affects the effective return after tax.

Unit Trust Benchmarking

• KLIBOR (Kuala Lumpur Inter-bank Offer Rate) and KLCI (Kuala Lumpur Composite Index) can be used as benchmarks when assessing investment performance.
• The current account situation as a percentage of GDP cannot be used as an investment benchmark.

Unit Trust Financing

• The maximum margin on unit trust financing is fixed at 79%.
• The maximum amount that can be borrowed from a financial institution for investment is 79% of the investment amount.

Unit Trust Parties

• Parties involved in the unit trust industry include:
  • UTMC (Unit Trust Management Company)
  • Trustee
  • Investment Manager
  • Unit holder

Prospectus

• The prospectus of a unit trust fund typically includes:
  • Investment objectives
  • Authorized investments
  • Fees and charges
  • Trust expenses

Distribution Reinvestment

• Distribution reinvestment refers to the process of reinvesting distributions in a unit trust.

Average Unit Cost

• The average unit cost for an investment can be calculated by summing the amount invested and dividing it by the total number of units purchased.

Unit Trust Classification

• A unit trust fund with 70% of its assets invested in equity is classified as an equity fund.
• A unit trust fund with 85% of its assets invested in money market instruments is classified as a money market fund.

This quiz assesses knowledge of the rules and regulations related to investment schemes, particularly the EPF. It covers topics such as age limits, withdrawal rules, and eligible investments.