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Thursday, August 27, 2015

Which PRS Fund to Invest?

If you have yet to know about Private Retirement Scheme (PRS), check out my previous post on what is PRS. So supposed by now, you should know all the benefits of PRS. At this point of time, you are a ready buyer, so to continue the last question from the previous post....

Which PRS fund Should I buy?

Since minimally, you will put in RM3,000 to maximize your tax savings, you will have a variety of 47 PRS Approved Funds. So how to choose one out of 47 funds?

Method 1: Based on Age & Risk Tolerance
Age and risk are correlated as older age should take lesser risk since it is getting nearer to retirement and vice versa. So here's a general guideline on the fund selection based on the age and the risk tolerance. Based on your category of core funds, you can then narrow down to a few options. 

Method 2: Based on Past Performance
Well, since #YourFinanceDoctor is representing client only and does not represent any fund houses, the past performance should be taken from a neutral website - Morningstar. (Click Here). So sorting with Annualized Return, you will see as the following figures. You will realized that there are a lot of negative one during this market situation.
Taken from Morningstar on 27/8/2015

Method 3: Based on Agent
I believe this is the most common case! Whichever agent that came up to you regardless of representing any particular fund house, as long as he could persuades you, you will buy. But is it the best in the market for you? You will never know until you read this post! Heh! 

Like the saying goes, "Don't invest in what you don't know. Learn first then invest." PRS is definitely a good vehicle as one of your investment option and it should be used deliberately! So I supposed those of you that are reading this, you are doing a great job! Cause you must be learning, that's why you stumbled upon here. Well, sharing is caring! Do share out as well! ;)

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