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Young man working on his computer; image used for HSBC MY's Investing In The New Normal Liquid article

Investing in the new normal

Unit trusts can offer diversification with lower volatility

As markets slowly recover from the impact of the COVID-19 pandemic, it may be time to consider a more diversified approach to your investment portfolio.

How should you position your investments in the new normal?

No one has a crystal ball. We still really don't know which direction the pandemic is headed or how long it will last. Markets have been trending upwards in recent months, signalling that the worst may be behind us, but there is still uncertainty. 1

While you may be apprehensive about betting your hard-earned money on the markets at the moment, experts believe long-term market uptrends remain intact despite the volatility we are seeing.1

But unless you are a seasoned investor, trying to pick the right investments yourself - especially amidst current market volatility - can be challenging.

An option to consider is investing in unit trusts. Unit trusts give you access to a wide range of professionally managed investments to suit your requirements while minimising the need to spend countless hours managing your portfolio yourself.

Benefits of unit trusts2

  • Affordability
    They have a relatively low cost of entry for investing.
  • Diversification
    Unit trust offers a wide spread of investments to diversity your risk, which also provides lower volatility.
  • Liquidity
    Unit trusts can be easily bought and sold, providing liquidity if required.
  • Professional fund management
    Fund managers have in-depth knowledge and experience to professionally manage your investments.
  • Investment exposure
    Unit trusts allow you to gain exposure to different asset classes simultaneously, without having to make large investment commitments.
  • Comfort of regulation
    Unit trusts are regulated, so you're investing in a safe investment vehicle.

Things to look out for when choosing unit trusts3

Understand the different types of funds

Different unit trusts focus on different asset classes. Learn the differences and choose funds that complement your financial goals.

Fund performance

Investigate the historical rate of return over the mid- to long-term to determine a fund's potential future performance.

Awards and recognition

Awards and recognitions that the company receives can help you gauge the credibility of the fund manager.

Determine the entry cost

Unit trust funds have an initial minimum investment amount. Find one that fits your financial circumstances.

Calculate the cost of investment

Consider all the costs of investing in a fund. Upfront sales charges, ongoing management fees and switching fees can eat into your returns.

3 strategies to consider for your unit trust investment in the new normal.

Asian high-yield strategy4

Against a historically low interest rate environment, an Asian High Yield strategy may provide an optimal solution for investors looking for yield. As of August 2020, yields of Asian high-yield bonds were approximately 7.5%, and default rates for the asset class are expected to be lower than other regions. This is anchored by strong fundamentals of Asian high-yield issuers that are more equipped to weather economic headwinds.

ESG strategy5

There is growing awareness that looking at companies' Environmental, Social and Governance (ESG) records can be beneficial for the performance of your portfolio over the long run. Adding these factors to your investment decisions could potentially help you manage risk and generate sustainable, long term potential returns. A sustainable investing strategy that is based on Sustainable Responsible Investing (SRI) not only enables investors to invest in companies with strong ESG records, but also bring about positive and measureable impact to society.

Index-linked strategy6

An index-linked strategy is where you build your portfolio to match or track components of certain financial market indices. One primary advantage of an index-linked strategy is that it tends to have lower costs than other actively managed strategies. In many instances –especially in the developed markets or global equity space – index-linked strategies may outperform other actively managed strategies. This strategy could be ideal for investors who want exposure to a broader market with a relatively low cost option.

To start investing, speak to your Relationship Manager today.


1. The Straits Times, Readying for market recovery in the post-COVID-19 era, 21 June 2020.

2. Federation of Investment Managers Malaysia, What are unit trusts?

3., 6 important factors to consider before investing in unit trust, 26 June 2018.

4. Fund Selector Asia, Affin Hwang AM rolls out Asia HY feeder in Malaysia, 8 September 2020.

5. Affin Hwang Capital Asset Management, Affin Hwang World Series – Global Sustainability Fund, September 2020.

6. Moningstar, How'd Active Funds Do in 2019? So-So, 20 January 2020.

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