KUALA LUMPUR: The cross-border investment products under the ASEAN Collective Investment Scheme (CIS) framework will be the “flavour of the year” for the fund management industry, the Federation of Investment Managers Malaysia (FIMM) said.
The framework was established last year by the Securities Commission Malaysia (SC), the Monetary Authority of Singapore (MAS) and the Securities and Exchange Commission of Thailand (SET).
It is aimed at facilitating cross-border offerings of collective investment schemes, such as unit trusts, thus enabling fund managers from Malaysia, Singapore and Thailand to offer their investment products directly to retail investors in the three countries under a streamlined process.
FIMM Chief executive officer Nazaruddin Othman said five products had been approved, two by the Malaysian authorities and three by Singapore, while Thailand is currently considering one for approval.
“It will provide more options to Malaysian investors in terms of products offerings,” he told Bernama.
He said the distribution of investment products by foreign fund managers in Malaysia would depend on the market conditions in the country, as well as the ability of the fund managers to appoint a distributor locally.
Nazaruddin said the framework, which was introduced in line with the liberalisation of fund flows across the three countries, has also attracted the interest of other ASEAN members.
He added however, countries intending to participate in the framework need to enhance regulations in their own countries first, to be on par with that of the existing signatories and which are considered as more advanced in terms of regulations and supervision.
Meanwhile, on the outlook of unit trust funds, he said the industry is not expected to be affected by short-term fluctuations such as the weakening of ringgit and oil price slump, as its objectives is long-term returns.
“Over the long-term, unit trusts basically, should be able to generate returns above inflation rates.
“Furthermore, it also depends on the fund managers strategy and valuation during market volatility, that would create the capital appreciation.
“If the valuation is attractive, they (fund managers) will buy as there will be earnings created when the market rebounds,” he added.
According to the SC, there are 76 fund management companies in Malaysia as of Sept 30 last year, with total assets under management of RM633.31 billion.
– Bernama