Thursday November 1, 2012
Big plans for HwangIM's assets under management for private retirement scheme
It wants to grow its private retirement scheme to RM100mil
KUALA LUMPUR: Hwang Investment Management Bhd (HwangIM) aims to grow its assets under management for its private retirement scheme (PRS) to RM100mil in three years, said chief executive officer and executive director Teng Chee Wai.
He said PRS was a very healthy development for the capital market in Malaysia because there were only a few big pension players today.
“It would be good for the market in the long-term to have more big pension players and HwangIM intends to be one of them,” he said at the launch of the fund house's Hwang PRS Solutions here.
HwangIM is the first of the eight approved PRS providers to roll out the voluntary retirement investment service.
Teng said that although PRS was not required to provide a capital guarantee, unlike the Employee Provident Fund's minimum 2.5% yearly dividend, the returns from capital guarantee funds were poor because “there's no free lunch out there.”
For its part, he said HwangIM does not intend to set up a capital guarantee fund under PRS.
“If the other providers decide to structure a capital guarantee fund, they can do so. The guarantee is given by a third party, not the Government.
“I'm quite sure that if you have a capital guarantee fund you will not be able to generate enough returns for retirement. You can't have both capital appreciation and capital guarantee,” Teng said.
He added that safeguards had nonetheless been put in place by the regulators.
“When PRS was first mooted, one of the key concerns the industry had was how to make sure the public's investment is safe,” Teng said.
PRS is open to all Malaysians and foreigners above 18 years of age as well as to companies looking to add to their employees' existing retirement contributions or in the form of staff retention programmes.
The funds launched by HwangIM yesterday come under four categories: growth, moderate, conservative, and syariah-compliant.
“At the moment the industry is launching the default funds. Each has its own age bracket, minimum asset allocation and foreign exposure limit. The conservative fund for example cannot have foreign exposure,” Teng explained.
He added that HwangIM had no immediate plans to introduce other PRS funds although there is no limit placed on the number of products a provider can sell.
“I don't believe in having so many. We will focus on the funds we have now,” he said.
The other seven PRS providers appointed by the Securities Commission are AmInvestment Management Sdn Bhd, American International Assurance Bhd, CIMB-Principal Asset Management Bhd, ING Funds Bhd, Manulife Unit Trust Bhd, Public Mutual Bhd, and RHB Investment Management Sdn Bhd.