Wealth Management: What are the types of investment products suitable for me?
It is important to understand the product before you invest as different investment products have different risk levels and time period for the product to provide the best yield.
The chart below illustrates the risk and potential return of the common types of investment products.
There is a trade-off between risk and return. The higher the potential return, the higher the potential risk.
It is advisable that you invest only in products that are consistent with your risk appetite.
Please refer to the Investment Knowledge Base
category for more information on factors to consider before investing
and the do's and don'ts on investment
A comprehensive wealth management plan should generally include ways to maintain, grow and distribute assets
investment plan would depend on your goal and willingness to take risks
- Fixed deposit - Money placed with banking institutions for a fixed tenure, e.g. 1, 3, 6, 9, or 12 months to earn interest.
- Bond fund - An investment fund that invests primarily in bonds or other debt securities.
- Capital guaranteed product - A product that provides a return while at the same time provide capital guarantee at the end of maturity.
- Corporate bond - A debt instrument for a loan which is issued by a borrower to an investor who is the buyer of the bond and lender of the money. In return for the money, the issuer agrees to pay regular interest to the bondholder for the term of the loan and the principal sum borrowed upon maturity.
- Equity fund - An investment fund that invests primarily in shares.
- Investment linked insurance - A life insurance plan that combines investment and protection. The premiums paid will partly be used to pay for life insurance cover and partly for investment in specific investment funds of the policyholder's choice.
- Listed large capital stock - Companies whose shares are listed on Bursa Malaysia Securities Berhad with market capitalisation of generally above RM2 billion.
- Listed small capital stock - Companies whose shares are listed on Bursa Malaysia Securities Berhad with market capitalisation of generally below RM750 million.
- Option/warrant - An instrument that gives the holder the right but not the obligation, to subscribe for a particular instrument, e.g. new ordinary shares, at a pre-determined exercise price within a stipulated validity time frame (exercise period). The warrant becomes worthless after the expiry of the exercise period.
- Separately managed equity portfolio - A portfolio managed by fund manager where investors own the securities individually.
- Unit trusts - Pools of money managed by an investment company. They offer investors a variety of choice, depending on the fund and its investment objective.
Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)
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