This article will supply you with a list of investment companies in Malaysia. To understand the value of this list to a potential investor, a brief description of an investment company is mentioned as well as the different types of investment companies. Lastly, the main steps of investing are given and different opportunities to invest in.
What is an investment company?
An investment company is a business, which as the name suggest their core activity is investing and identifying investment opportunities. This term is quite broad. An investment company can invest in anything from real estate to stocks. But what are the requirements to be called an investment company?
An Investment company should always be operating with a fund of capital supplied by investors, making it a pooled fund of capital. Investment companies could be either publicly (traded on the stock market) or privately owned. Some investment companies are listed, most are not.
In most cases when mentioning an investment company. It is a company that makes a profit by buying and selling shares.
Three types of investment companies
The three types of investment companies are closed-end funds, mutual funds (open-end funds), and unit investments trusts. They all have different qualities which will be explained in this section of the article.
These investment companies are traded on the stock exchange. As it is a closed-end fund, there is a fixed number of shares outstanding. Which results in that trading these stocks do not have any influence on their portfolio.
These companies have a floating number of shares. So, the fund can become larger and smaller, this depends on the amount of total capital invested. When there are more shares outstanding there is more capital put into the fund, therefore the fund is larger. This structure can be more complex for investment managers as they have to plan for the possibilities that investors want to get all their money back at a sudden.
Unit investment trusts
These investment companies are very similar to the mutual fund type. As these are like the mutual fund redeemable investment (shares). The main difference between the two is their legal structure. A mutual fund is a company, while unit investment trusts are not.
List of investment companies in Malaysia
Unit trust companies
AmChina A – Shares
TA Global Technology Fund
TA Investment Management (Islamic fund)
Steps to selecting an investment company
What are your goals?
It is important to know your goals in order to select the correct investment firm for you. Some may like a more defensive approach. Investors hope this will result in a lower return but a more stable return. Some investors pick the aggressive approach which consists of very risky investments, aiming for a high return in a small amount of time.
When do you require a return?
Some investors, invest to get a rerun in the long-run. This could be beneficial as returns are usually higher and more stable. However, most investors do not have a large sum of money available over a long period. Some unfortunate things may happen, for example, an unforeseen renovation or a broken car. That is why it is so important to predict your expenditures, and know when you require to have a return back on your investment.
Make an investment plan
This plan should consist of the previously discussed aspects, the risk you are willing to take and when you want a return. Furthermore, you should think about what industry you would like to invest in. When selecting an investment company find out in what industries they invest in, and whether or not this is suitable for you. The industry you want to invest in depends on your preference. Some are interested in green investments. While others focus on something completely different, like the automotive industry.
In the case of an investment company, they make the choices for you. These investment companies have a very broad portfolio, so your investment should already be very diversified. However, do always consider investing in several investment companies as something unforeseen could always happen. For example, a scandal of the investment company.
How hands-on do you want to be?
This is not very applicable in an investment company as your investment is being handled by an investment expert. They will invest for you. However, if you would like to be more hands-on consider joining a venture capital or a hedge fund.
What are the charges?
Do they charge you management fees? This would not be the case with a listed company as you buy shares of them directly from the stock market. But unit trust companies could charge you fees. Ask yourself the question of what percentage you are willing to pay.
Other opportunities for investors
There are a lot of different ways to invest and a lot of different opportunities. For the purpose of this article, we want to provide you with four different methods of investing. These are venture capital, hedge funds, equity crowdfunding and lastly joining an angel investor network.
Venture capital – This type of investment involves an investor which supplies money and guidance to a growing company in exchange for equity of the company.
Hedge fund – This is a pooled fund of capital managed by an investment expert, very similar to the three types of investment companies in this article. Hedge funds, however, have a larger barrier to entry. The capital in hedge funds provided by one investor is usually a lot more than in an investment company.
Equity crowdfunding – This is a method for start-ups and growing companies to get capital in exchange for equity. The difference with VC is that there are a lot of investors involved who normally do not provide guidance.
Joining an angel investor network – Is very similar to VC however the guidance provided is far more intensive when being an angel investor. Also, the amount of capital is usually lower than the amount a VC will invest.