Securities Commission executive director of market development, Salmah Bee Mohd Mydin
KUALA LUMPUR: The fund management industry has surpassed the trillion-ringgit milestone since February this year, driven by robust performance in the equity markets, especially due to strong valuations in the United States, according to the Securities Commission Malaysia (SC).
Its executive director of market development, Salmah Bee Mohd Mydin said the industry has grown steadily over the past decade, with assets under management (AUM) increasing by more than 65 per cent to RM975.5 billion in 2023 from RM588.4 billion in 2013.
"Over the same period, we have seen the industry’s AUM continue to be well-diversified among various asset classes and into regional and global markets,” she said in her keynote speech at the Federation of Investment Managers Malaysia (FIMM) Conference 2024, here today.
Salmah highlighted that the unit trust industry is the backbone of the fund management sector with over 760 funds that have a wide range of offerings including domestic equity, global multi-thematic, China-focused funds, and balanced and aggressive funds.
Fund managers are increasingly allocating capital to foreign markets in their search for better yields, with RM718.2 billion (67 per cent) invested domestically and RM351 billion (33 per cent) directed outside the country.
"A similar trend is also observed in the unit trust industry, where between 2017 and 2023, we saw not only a consistent increase in the number of funds investing abroad but also growth in the total investment amounts.
"In 2023 alone, RM135.76 billion of the RM499.88 billion in unit trust funds’ net asset value (NAV), was allocated outside Malaysia, representing a 2.5-fold increase compared to 2017,” she said.
Between 2018 and 2024, the number of unit trust funds (UTFs) offered grew by 18 per cent to 764.
Similarly, total NAV grew by 28 per cent to RM545 billion, while the industry saw a 23 per cent growth in the number of accounts, totalling 26 million, over the past five years.
Salmah emphasised the importance of raising awareness about saving for retirement and promoting innovative solutions to help Malaysians save for retirement.
This includes providing options for managing retirement funds to reduce the risk of outliving savings, she said.
"Fund management companies and financial planners are key intermediaries and play a crucial role in guiding Malaysians through the retirement journey. SC recognises this and the importance for more innovative decumulation solutions that can help retirees efficiently manage and draw down their accumulated savings.
"The SC is open to facilitating such innovation and, in this regard, I would like to invite interested parties to discuss these with the SC,” she said. - Bernama
