Thursday, July 10, 2008

What you need to know when investing in Unit Trusts using EPF savings.

1. EPF funds are basically an alternative savings plan conservatively managed to generate stable and moderate returns that at least maintain the purchasing power of our retirement savings by keeping pace with the prevailing inflation rate.
2. EPF dividen rate can't be use as a benchmark of investment performance for unit trusts.

Unit Trust Funds
1. The performance should be evaluated against their respective benchmarks over a medium-term horizon of three to five years.
ie. an equity fund evaluated if it beats KLCI. (Kuala Lumpur Composite Index)

But what are the criteria for me to invest?
EPF has set up certain rules for your investment
Only 20 % from your entitlement in Accout 1

Table of minimum amount listed below:
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To Summarize:
It pays to invest early in your working life and using a portion of your EPF savings to enhance your overall returns is a wise way to start.
To apply DCA (Dollar Cost Averaging), you can withdraw a fixed amount regularly every 3 months or every year to invest in equity unit trusts,

those who have low tolerance of risk and nearing retirement, they are encouraged to maintain their savings in EPF accounts.

Author is a certified Unit Trust Consultant (click here to view profile)

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