PRS Express

Your reading vehicle for all your retirement needs.

For internal distribution only

Issue 76 23 February 2021

2020 was a good year for PRS funds

Despite rising Covid-19 infections globally and market volatility, the Private Retirement Scheme (“PRS”)
industry continued to sustain strong growth in 2020. The total Asset Under Management of the existing
57 PRS funds increased by 36% YoY to RM4.7 billion as at end December 2020 while membership base
grew by 8% YoY to 490,323 as at end Dec’20 (Source: PPA). The PRS industry recorded 29% YoY
increase in contribution to RM850.6 million as at end Dec’20 (Source: PPA). Investor optimism was
driven by news of Covid-19 vaccine rollouts, fostering hopes of a return to economic normality.

Commendable PRS fund performance

Most of the PRS funds achieved better returns in 2020 compared with 2019. According to data by
Morningstar, an independent research firm, the total number of PRS funds that recorded double-digit
returns for the year had increased to 30 in 2020 from 18 in 2019. Within the core PRS funds, the growth
category was the best performer with 1-year average return of close to 14% for conventional and 17% for
Shariah growth category in 2020 (Source: PPA/Internal Estimate). In addition, the 1-year average return
for non-core PRS equity fund with heavy foreign exposure was 15% for conventional and 20% for
Shariah last year (Source: PPA/Internal Estimate). Stocks rallied on the back of more US fiscal stimulus,
vaccine optimism and loose monetary policy. Nonetheless, we should be mindful that past performance
is no guarantee of future results.

Shariah PRS funds shine amid Covid-19 chaos in 2020

All PRS funds had its worst fall in March 2020 when the governments around the world imposed
lockdowns to stem the spread of Covid-19 pandemic. However, Shariah PRS funds fared better
compared to its conventional peers due to the exclusion of the conventional banking, gaming, tobacco
and alcohol sectors, which were more economic sensitive. To fill the gap, Shariah funds allocated more
to healthcare, industrials and technology sectors which outperformed last year. Heading into 2021, the
prospect for the technology sector is likely to be positive as more businesses understand the importance
of harnessing technology to drive future growth.

Adding Shariah funds into your PRS portfolio can provide diversification benefit since their sector focus
differ from conventional funds.

Page 1 of 3

AIA Pension and Asset Management Sdn Bhd (APAM)

Level 10, Menara AIA • www.aia-prs.com.my
PRS Express
Your reading vehicle for all your retirement needs.
For internal distribution only

Issue 76 23 February 2021

Stronger fund performance despite headwinds last year

AIA PRS funds returned positive for the 1-year period as at end Dec’20, exceeding the 12-month fixed
deposit rate of 1.85%. PRS funds continue to be a good complement to EPF savings whereby EPF
dividend rate was 5.45% in 2019 and news reported that EPF dividend forecast for 2020 by some
economist could be on par with 2019 or slightly less.

The rally in equity market coupled with good stock selections had contributed to strong performance
particularly in AIA PAM-Growth Fund which recorded the highest total return of 16.4% for the year.

PRS fund performance comparison with peers as at end December 2020.

MTD Return YTD Return (12 months) APAM
PRS Performance Type December 2020 ending December 2020 1-Year Total Return
APAM APAM Peer Average Ranking 2017 2018 2019
PRS Conservative Core 0.8% 6.8% 6.6% 3/8 6.4% 0.0% 5.0%
PRS Moderate Core 2.2% 13.6% 12.4% 4/8 15.0% -9.6% 7.2%
PRS Growth Core 2.3% 16.4% 14.2% 4/8 13.5% -8.2% 7.2%
PRS Islamic Moderate Non-Core 0.2% 15.9% 15.4% 4/8 8.0% -10.7% 7.0%
MTD – Month to Date ; YTD – Year to Date (Jan – Dec)
Source: APAM / Bloomberg as at 31 December 2020
Note: Past performance is no guarantee of future results.

New fund offers global market opportunities

To meet the growing demand for Shariah-compliant investments, APAM is adding AIA PAM-Global Islamic
Growth Fund into its PRS product offering on February 23. The Fund aims to achieve long term capital
growth through investment in Shariah-compliant stocks and collective investment schemes mainly in the
global markets.

As Covid-19 impact continues to linger and global economic recovery is likely to be uneven, you may want
to balance your risk by investing in the new fund. A global fund offers a wide set of investing opportunities,
across sectors, globally while providing diversification outside of local investments.

For more information, kindly read the Disclosure Document, contact our PRS consultants or visit us at
www.aia-prs.com.my.

Page 2 of 3

AIA Pension and Asset Management Sdn Bhd (APAM)

Level 10, Menara AIA • www.aia-prs.com.my
PRS Express
Your reading vehicle for all your retirement needs.
For internal distribution only

Issue 76 23 February 2021

Disclaimer

This material has been prepared solely for information only. It may not be copied, published, circulated,
reproduced or distributed in whole or part to any person without the prior written consent of AIA Pension and
Asset Management Sdn. Bhd. (“APAM”). In preparing this material, APAM has relied upon and assumed the
accuracy and completeness of all information available from public sources or which was otherwise reviewed by
APAM. Accordingly, whilst we have taken all reasonable care to ensure that the information contained in this
material is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness
and make no representation or warranty [whether express or implied] and accept no responsibility or liability for its
accuracy or completeness. You should not act on the information contained in this material without first
independently verifying its contents. Any opinion contained in this material is based on information available as at
the date of this material and reflects prevailing conditions and our views as of the date of this material, all of which
are subject to change at any time without notice.

This material has not been reviewed by the Securities Commission Malaysia (“SC”) and Federation of Investment
Managers Malaysia (“FIMM”). The SC and FIMM are not liable for and are not in any way associated with this
material. The SC and FIMM are not responsible for the contents herein and do not make any representation on
the accuracy or completeness of this content, either in whole or in part. A copy of the Second Replacement
Disclosure Document dated 23 February 2021 (“Disclosure Document”) and the Product Highlights Sheet (“PHS”)
have been registered and lodged with the SC. The registration of the Disclosure Document and lodgment of the
PHS to the SC do not amount to nor indicate that the SC has recommended or endorsed the Private Retirement
Scheme (“PRS”). A PHS highlighting the key features and risks of the PRS is available and investors have the
right to request for a PHS. Investors are advised to obtain, read and understand the Disclosure Document and the
PHS before making a contribution. We suggest that you compare and consider the fees, charges and costs
involved prior to making a contribution. The Disclosure Document and the PHS can be obtained from our office,
our authorized distributors, consultants or representatives. Any issue of units to which the Disclosure Document
relates will only be made on receipt of an application form referred to and accompanying with a copy of the
Disclosure Document. The price of units and distributions payable, if any, may go down as well as up. The past
performance of the PRS should not be taken as an indication of its future performance. Specific risks and general
risks for the PRS are elaborated in the Disclosure Document. Investors are advised to understand the risks
involved in the PRS and make your own risk assessment and seek professional advice, where necessary.

Page 3 of 3

AIA Pension and Asset Management Sdn Bhd (APAM)

Level 10, Menara AIA • www.aia-prs.com.my