Investing in PRS this year

I take more of a hands-on approach to investing, albeit not a successful one (oh well). It’s the eagerness towards learning personal finance and the idea of not paying fees. Because of that, I only subscribe to mutual funds under the Private Retirement Scheme for tax relief (extended to the year 2025). Since 2015, I invested RM3,000 every year between Oct-Dec. I always do it at the end of the year as I am not keen on unit trust, and historically, a market correction is more likely to happen end of the year?

Why Public Mutual?

There are no good reasons, and this post is not affiliated (Hi PB staff, do you have a budget for this site?). I started in Public Mutual because my sibling is an agent with them, and I am not familiar with all the information. Between 2015-2018, I grind my teeth every time I open the portal, PMO seems to be doing well, but the PRS is always a lagger and was on losses for 2 years.

Now the funds are back to green and made some returns. It feels good, even if it’s not that impressive when you look at the annualized returns of 4-5%. Especially given that 2019 was a great year (S&P 500 went up by 30.43%).

What about year 2020?

This year, I took at the overall segment, which is the best performing fund across the PRS offerings. And here’s the table I use (from the PPA website, link below).

Source: PPA Fund Information by MorningStar. You can get the clearer PDF from the website.

I’ll spare the detailed thoughts, as we all have different investment preferences and risk appetite. But here’s my general view based on historical data:

Top 3 financial house to avoid
  • Manulife
  • AIA Pension Fund
  • RHB
Top 3 financial house to consider
  • AffinHwang
  • Kenaga
  • Public Mutual
But some funds returned 10%!

Yes, both AmBank and Principle CIMB have few outstanding funds. However, it’s among the bad funds by the same financial house. They could swap fund managers at any time. I am not good at picking the jackpot, so consistency is better than guessing for me. If you are a lucky person, make sure you pick the right one.

Job insecure, market at high, going for a ride again?

Yes. Here’s my personal view, if you don’t have spare cash to invest, but your income tax bracket is >10%, I would consider withdraw EPF (I do through i-Lestari) and invest in PRS to claim the tax relief.

If you’re investing, remember to do it before 31st Dec. All the best!

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