EPF, Unit Trusts in Opinions, The Star

While reading The Star this morning after breakfast, I found this message in the Opinion section:

Be aware of risks when investing in unit trusts

WE REFER to the letter, “EPF should not allow use of funds to buy unit trusts” (The Star, Feb 22).

The Employees Provident Fund is sympathetic to Sad Retiree’s experience. While it is the EPF’s responsibility to ensure that members have sufficient funds for their basic retirement needs, it must also be responsive to the needs of its members who wish to diversify their investment options.

The members’ investment withdrawal was designed to give members, who already have a sufficient amount in their EPF savings, an alternative to invest part of their savings in unit trusts through approved fund managers.

However, members must be reminded that investments made on their own, while potentially able to generate higher returns, are also subject to higher risks.

The choice to apply for the withdrawal depends on each individual’s risk-return profile. Members who are not confident about investing on their own should always opt to leave their savings with the EPF.

The EPF would like to encourage members who are considering the members’ investment withdrawal to seek professional advice and be fully aware of all the risks involved before making a decision.

NIK AFFENDI JAAFAR, Senior Manager, Public Relations, Employees Provident Fund, Kuala Lumpur.

It was a response to another message in the Opinion published last Wednesday:

EPF should not allow use of funds to buy unit trusts

IT is about time the Employees Provident Fund withdrew the provision allowing members to use their EPF funds to buy unit trusts.

This is to safeguard ignorant investors from losing their life savings.

Investing in unit trusts is the same as dabbling in the share market. In fact, it is worse because the investors are at the mercy of a third party (the fund managers) who are supposed to make money for them by investing prudently in the share market and such.

I lost about RM30,000 using my EPF fund to buy unit trusts the values of which have mostly dwindled, and that, too, from reputable unit trust companies.

I invested in unit trusts 10 years ago, and now approaching 55, I feel so sad with the loss.

After all, the role of the EPF is to protect contributors and ensure they have sufficient funds for retirement.

SAD RETIREE, Kuala Lumpur

I believe it is the duty of the EPF (Employees Provident Fund) organization to advise their members on the risks involved in taking out their hard earned money and hand it to these eager unit trust agents. Some of the these unsuspecting souls could be sold easily to the sweet promise of high returns promised to them. It is not in the agents’ interest to dwell too much on the risks because they are after the commission from the sales. Of course, we are expected to read the prospectus completely, but how many of us read all of the fine prints before signing above the dotted lines?


4 Comments (+add yours?)

  1. WWC
    Apr 16, 2006 @ 17:52:15

    I am a Unit Trust Agent for the past 9 years, last 4 years as full time. If you need to know why people invest in unit trust even though the fees are 7%, do email me..


  2. myusri
    Apr 17, 2006 @ 11:11:48

    Dear WWC,

    Since this is a blog site which is meant to be shared with the general public, I would recommend you sharing your experience with all of us. Sure, I will also e-mail you too.


  3. simon
    Oct 26, 2007 @ 01:32:56

    hi, can you please explain what unit trust are,and explain with unit trust are important for bankers to consider,and the risk involved with unit trust and what risk are involved when dealing in unit trust.


  4. myusri
    Oct 29, 2007 @ 19:16:15

    I’m no expert on Unit Trust. Maybe Wikipedia can be of help? See:


    With any investment scheme, the investor may lose her money. The risk is may be less with Unit Trust compared to trading shares directly on the stock market but you need to take into account the fees you need to pay. Read the prospectus and talk to your financial adviser!


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