Find out what are the best Malaysian Private Retirement Schemes (PRS) to invest in in 2020/2021. Save, invest, and retire well!

Private Retirement Schemes Quick Overview

Private Retirement Schemes (PRS) were introduced in 2012 as a voluntary long-term investment scheme to help accumulate funds for retirement. PRS benefits include a RM3,000 annual tax relief available this year and one final year in 2021 (unless extended).

In view of Covid-19 PRS members below age 55 are able to withdrawal their PRS Sub-account B for amounts up to RM1,500 once per PRS Provider from 30 April 2020 until 31 December 2020.

PRS are generally divided into 3 categories defined as below. Investors have an option for auto-glide that will automatically determine the fund based on your category and group. To note as well the age bands have been raised by 5 years for all 3 categories:-

Core FundsAgeAllocation
Conservative55 years above (Previously 50 years above)80% in bonds/fixed income instruments with minimum 20% in money market instruments and maximum 20% in equity
Moderate45 - 55 years (Previously 40 - 50 years)Maximum of 60% in equity; 40% in bonds/fixed income and money market instruments
GrowthBelow 45 years (Previously below 40 years)Maximum 70% in equity; 30% in bonds/fixed income and money market instruments

Overall, PRS returns have been a good option especially if you take advantage of the tax incentives offered, and select a decent performing PRS fund.

 

Top PRS Ranked by Lipper Leaders Ratings

There are overall 55 PRS funds from various PRS providers. Rankings are based on Lipper Leader ratings in 3 categories: total returns, consistent return, and preservation.

Lipper Leaders ratings are measured vs peers with the top 20% of funds in each peer group receiving a 5 rating (aka Lipper Leaders), the next 20% receiving a 4 rating, the middle 20% 3 rating, the next 20% 2 rating, and the bottom 20% a 1 rating.

  • Consistent Return: reflect funds’ historical risk-adjusted returns, relative to peers. A Lipper Leader for Consistent Return may be the best fit for investors who value a fund’s year-to-year consistency relative to other funds in a particular group.
  • Preservation: a fund that has demonstrates a superior ability to preserve capital in a variety of markets when compared with other funds in its asset class.
  • Total Return: a fund that has provided superior total returns when compared to a group of similar funds. Lipper Leaders for Total Return may be the best fit for investors who want the best historical return, without looking at risk

This year we have broken down the ratings for each metric. (Note: the metric for Expense is unavailable for PRS)

Best Consistent Return for PRS

  • Affin Hwang: PRS Growth / PRS Moderate / PRS Shariah Growth
  • AmPRS PRS Islamic Equity / PRS Islamic Balanced / PRS Tactical Bond / PRS Conservative / PRS Moderate
  • Kenanga OnePRS Growth / Shariah OnePRS Growth / OnePRS Shariah Equity
  • Public Mutual Growth PRS Equity / PRS Conservative / PRS Moderate / PRS Islamic Growth / PRS Islamic Moderate / PRS Islamic Conservative

Best Preservation for PRS

  • Affin Hwang Aiiman PRS Shariah Growth / PRS Conservative
  • AIA PAM PRS Conservative
  • AmPRS PRS Conservative / Asia Pacific REITs / PRS Islamic Fixed Income
  • Kenanga OnePRS Conservative / Shariah OnePRS Conservative
  • Manulife PRS Conservative / Shariah PRS Conservative
  • Principal PRS Plus Conservative / Principal Islamic PRS Plus Conservative
  • Public Mutual Growth PRS Equity / PRS Conservative / PRS Strategic Equity / PRS Growth / PRS Islamic Conservative / PRS Islamic Strategic Equity
  • RHB Retirement Series Conservative

Best Total Return for PRS

  • Affin Hwang Aiiman PRS Shariah Growth / PRS Moderate / PRS Growth
  • AmPRS Growth PRS Islamic Equity / PRS Islamic Balanced / PRS Moderate / PRS Tactical Bond
  • Kenanga Growth OnePRS Shariah Equity / OnePRS Growth
  • Public Mutual Growth PRS Equity / PRS Conservative / PRS Growth / PRS Moderate / PRS Islamic Conservative / PRS Islamic Moderate / PRS Islamic Growth

Best Overall Lipper Leaders Score for PRS

5.0 average rating:

  • Affin Hwang Aiiman PRS Shariah Growth
  • Public Mutual PRS Equity
  • Public Mutual PRS Conservative
  • Public Mutual PRS Islamic Conservative

4.7 average rating:

  • Affin Hwang PRS Moderate
  • AmPRS PRS Islamic Equity
  • AmPRS PRS Conservative
  • Kenanga OnePRS Shariah Equity
  • Public Mutual PRS Moderate
  • Public Mutual PRS Islamic Moderate

4.3 average rating:

  • Affin Hwang PRS Growth
  • Affin Hwang PRS Conservative
  • AmPRS PRS Islamic Balanced
  • AmPRS PRS Moderate
  • AmPRS Asia Pacific REITs
  • Public Mutual PRS Growth
  • Public Mutual PRS Islamic Growth

Overall: There are now increased number of funds with 4.3 and higher ratings (Total 17 vs 14 in 2019). The Affin Hwang PRS and Kenanga have been consistently at 4.3 and higher ratings. AmPRS and Public Mutual has an increased number of PRS funds at 4.3 and higher rating. Principal (formerly CIMB) previously had multiple funds at 4.3 and higher ratings but have dropped to 4.0 and below ratings in 2021.

 

Top PRS Ranked by Returns

Highest Compounding Annual Growth Rate

PRS (like Unit Trust) performance is typically reported in terms of annualised returns. We have calculated out the compounding annual growth rate (CAGR) which we believe better reflects the investment’s long-term returns factoring in compounding over time.

  1. AmPRS Islamic Equity: 7.65% (2019 #5: 5.37%; 2017-2018 unranked)
  2. AmPRS PRS Islamic Balanced: 7.39% (2017-2019 unranked)
  3. Principal PRS Plus APAC Ex Japan: 7.23% (2019 #1: 7.71% 2018 #1: 12.19%; 2017 #1: 14.21%)
  4. Principal Islamic PRS Plus APAC Ex Japan: 6.71% (2019 #3: 6.11%; 2018: #2: 8.02%; 2017 unranked)
  5. Public PRS Islamic Growth: 6.32% (2017-2019 unranked)

Analysis

  • AmPRS Islamic Equity and Islamic Balanced have taken the #1 & #2 spots (with AmPRS Islamic Balanced jumping up 13 spots from #15 to #2).
  • Principal PRS Plus APAC Ex Japan and Islamic PRS Plus APAC Ex Japan have maintained returns but dropped in rakings to #3 & #4 respectively.
  • Public PRS Islamic Growth has risen to the #5 spot also jumping up 13 spots from #18 to #5.
  • Overall: More Islamic funds in the top 5 rankings. Shariah compliant holdings exclude conventional banking, gaming, tobacco and alcohol sectors which are negatively affected during the Covid-19 outbreak. Funds with exposure to Asia are also seeing better gains with better recovery rates although risks of subsequent waves possibly hampering recovery.

 

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Top PRS Ranked by Category

Growth

  1. AmPRS PRS Islamic Equity: 7.65%
  2. Principal PRS Plus APAC Ex Japan: 7.23%
  3. Principal Islamic PRS Plus APAC Ex Japan: 6.71%
  4. Public Mutual PRS Islamic Growth: 6.32%
  5. Affin Hwang PRS Growth: 6.26%

Moderate

  1. AmPRS PRS Islamic Balanced: 7.39%
  2. Affin Hwang PRS Moderate: 6.12%
  3. Kenanga OnePRS Moderate: 5.78%
  4. AmPRS PRS Tactical Bond: 5.31%
  5. Principal PRS Plus Moderate: 5.19%

Conservative

  1. AmPRS PRS Conservative: 4.99%
  2. Affin Hwang PRS Conservative: 4.57%
  3. Public Mutual PRS Islamic Conservative: 4.15%
  4. Public Mutual PRS Conservative: 4.07%
  5. Principal PRS Plus Conservative: 4.04%

Islamic

  1. AmPRS PRS Islamic Equity: 7.65%
  2. AmPRS PRS Islamic Balanced: 7.39%
  3. Principal Islamic PRS Plus APAC Ex Japan: 6.71%
  4. Public Mutual PRS Islamic Growth: 6.32%
  5. Affin Hwang Aiiman PRS Shariah Growth: 5.77%

Analysis

  • By returns, the top 10 PRS funds consists of 7 Growth funds & 3 Moderate funds.
  • Islamic funds performance have outperformed non-Islamic funds performance for the first time overall.
  • Overall: Overall returns have picked up for PRS funds compared to the last few years. Almost half the PRS funds long term are returning 4.00% pa and above returns. Only 6 funds have negative returns with the worst performing fund at -4.87%.

 

Contact Us Today for Your PRS Investment!

Get connected to a licensed financial planner who can assist you with your PRS fund selection towards meeting your financial goals, assist with your tax planning, and help you save with PRS funds available from as low as 0% sales charges today!

 

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