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By Zulkhairi Zulkifli


ESG-themed investing is receiving more emphasis recently. Learn what is it about and how to include it in your portfolio.

According to the Global Investment Review 2020 report, at the start of 2020, ESG investing or ESG-themed investing had reached USD35.3 trillion in the five major markets, a 15% increase in the past two years (2018-2020) and a 55% increase in the past four years (2016-2020). It’s up from 33.4% in 2018 to 35.9% of all professionally managed assets across all regions. This trend is continuing to grow in most regions, with Canada experiencing a tremendous increase in absolute terms over the past two years (48% growth), followed by the United States (42% growth), Japan (34% growth), and Australasia (25% growth) from 2018 to 2020.

So, what is ESG investing all about? Let’s look at the facts.

ESG Investing for Sustainable Investment

ESG is an acronym that stands for Environmental, Social, and Governance Investing. In addition to evaluating an investment’s financial metrics, the ESG investing approach involves a need to weigh up the corporation’s or fund’s policies related to:

  • Environmental matters (climate change and pollution, for example)

  • Social matters (such as diversity and ethics)

  • Governance (style of leadership and transparency)


Why Are People Attracted to ESG Investing?


Traditionally, most long-term investors felt they had to choose between their values and making money. To fulfill this intention, they will hold a massive and diversified portfolio that likely ended up with companies that paid well but did not do much good for the planet or society in their business practices.

However, Schroder Global Investment Study 2020 reported that almost half (47%) of people around the globe are attracted to sustainable investments because of their broad environmental impact. Another 42% felt the attraction to sustainable funds is because they are likely to offer higher returns. The data shows that investors no longer need to be torn between their choices as sustainable investing by adopting ESG-based sustainable investing is good for both goals, making it an attractive choice indeed.

Local ESG Growth Trends


Where do Malaysians stand when it comes to adopting ESG?

Security Commission Malaysia (SC) developed a 10-year strategy blueprint (2010-2020) involving ESG. Since 2014, SC has introduced several initiatives, including developing the Sustainable and Responsible Investment (SRI) Sukuk Framework. In December 2014, Bursa Malaysia launched the FTSE4Good Bursa Malaysia (F4GBM) Index for the Malaysian market to provide more visibility and profiling of ESG-compliant companies that meet a variety of ESG inclusion criteria and are eligible to be included. The standard is consistent with the global ESG model that FTSE developed, with strong references to the Global Reporting Initiative and Carbon Disclosure Project. As of 30 September 2019, there are 71 constituents of the Index, with a market capitalization of RM510.4 billion. As of June 2022, the total number of constituents is 87.

On the other hand, the FTSE4Good Bursa Malaysia Shariah (F4GBMS) Index was launched in July 2021 with 54 constituents to cater to investor demand for ESG and Shariah-compliant index solutions. The purpose is to track constituents in the F4GBM Index that are Shariah-compliant. For the most recent review period, June 2022, nine new companies were added to the F4GBMS Index. This brought the total number of companies in the index to 65.

Both indices are reviewed semi-annually in June and December against international benchmarks.

The Reality of ESG Investing

From industry players, the challenges that arise in the development of ESG investment locally is due to a limited investment universe and a lack of quality ESG reporting standard. These limitations are reflected in the types of ESG-themed funds available in Malaysia.

With the limited local investment universe, the fund houses need to construct a portfolio that consists of global securities for diversification purposes. The aim is to deliver the most value to their investors with higher potential returns and manage downside risks. In addition to the lack of quality reporting standards, fund houses need to invest extra resources to verify the accuracy of the information reported. Some might rely on information from ESG rating agencies, while others use screening tools by third parties.

ESG Investing with a Licensed Financial Planner


Fear of missing out (FOMO) in investing is the sentiment of desire to stay continually connected with what others are doing. Often one succumbs to “recency bias”, which is to make a rushed decision based on recent investment performance.

How do you combat this and align your investment portfolio with your values? Let’s look at how financial planners can help in this situation.

  • Discover client’s ESG values

Usually, financial planners will seek to learn about clients’ unique set of financial goals and risk tolerance first. But ESG values can be very personal, they can differ from one person to the next. One client may prioritize environmental issues while another values diversity.

Financial planners must first understand how clients might want to see them executed in the investments they pursue. Then, personalize their portfolio to mirror the client’s values.

  • Deploy a negative screening approach

Once financial planners are on the same page with their clients, they can start putting clients’ values into practice. They will identify companies that don’t align with clients’ values and remove them from clients’ portfolios.

A straightforward approach is to identify the right ESG funds for their clients. A fund will reduce the need to analyze individual stocks and spread out risk by holding a large basket of equities.

  • Review and reporting

Greenwashing is one of the risks associated with ESG investing. It is a strategy to market a company as being sustainable or green when it really isn’t.

To manage the risk, financial planners will use the right ESG data and tools for the purpose of monitor and report on ongoing changes to the ESG scores of the companies or funds.

By working hand to hand with a professional Licensed Financial Planner, you will have clarity on the placement of ESG in your investment portfolio. Have you incorporated ESG into your investment? Share with us here! About The Author


Zulkhairi Zulkifli (CFP) is a Licensed Financial Planner With Expanded Scope. His expertise is in holistic financial planning and advising on equities, debentures, or warrants listed on Bursa Securities. Zulkhairi truly believes that a simple and personalized investment plan is vital to growing your financial assets. He can be contacted at zulkhairi@wealthvantage.com.my

Perlu atau tidak untuk anda mendapatkan khidmat perancang kewangan? Baca untuk ketahui dengan lebih lanjut!


Oleh Juliyana Mohd Yatim

Sesiapa saja boleh mendapat manfaat daripada nasihat dan panduan oleh perancang kewangan profesional namun ramai yang berasa terbeban apabila memikirkan kos yang perlu dikeluarkan. Namun, jika anda memerlukan khidmat nasihat kewangan pada saat yang sangat genting, membayar untuk khidmat perancang kewangan adalah satu pelaburan yang padu sebagai persediaan untuk menghadapi masa depan. Berbalik kepada persoalan tadi, bilakah masa yang sesuai untuk mengambil khidmat perancang kewangan?


Dengan peredaran zaman, isu kewangan juga menjadi semakin kompleks dan berubah menjadi lebih canggih dengan teknologi terkini dan semakin rumit. Urusan mengendalikan kewangan tidak lagi semudah zaman sebelumnya kerana keperluan kewangan akan berubah berdasarkan situasi semasa.


Sekiranya anda mulai sedar kepentingan merancang kewangan dan masih mencari untuk mendapatkan khidmat nasihat perancang kewangan, mungkin sudah tiba masanya untuk mengetahui apakah pilihan yang ada berdasarkan keperluan kewangan anda.

Bilakah Waktu yang Sesuai untuk Mendapatkan Khidmat Perancang Kewangan?


Terdapat 3 faktor yang mendorong individu untuk mendapatkan khidmat perancangan kewangan:

  1. Anda masih belum pasti samada mahu merancang kewangan untuk masa depan dan memerlukan seseorang untuk memberikan panduan dan menunjukkan ke destinasi yang tepat

  2. Anda tidak boleh mengendalikannya sendiri atau secara DIY (do-it-yourself) dan lebih suka mendapatkan khidmat daripada profesional yang pakar atau mahir dalam bidang kewangan

  3. Anda suka mengendalikan kewangan namun masih memerlukan khidmat profesional agar perancangan tidak berlandaskan emosi anda atau hanya berdasarkan pandangan pihak yang kurang mahir contohnya ahli keluarga dan rakan-rakan.

Jika anda menjawab ya untuk hampir kesemua faktor ini, anda mungkin termasuk dalam kategori mereka yang memerlukan khidmat perancangan kewangan profesional. Namun begitu, terdapat beberapa perkara yang perlu dinilai untuk memastikan masa yang sesuai mendapatkan khidmat perancang kewangan.

#1. Anda Memerlukan Panduan untuk Merancang Kewangan bagi Masa Depan


Sebagai permulaan, ramai individu yang memiliki impian atau matlamat hidup untuk dicapai yang hampir sama tapi berbeza berdasarkan kemampuan kewangan masing-masing. Misalnya:

  • Merancang untuk berkahwin

  • Persediaan untuk membeli rumah

  • Merancang untuk tabung pendidikan

  • Mengerjakan ibadah haji

  • Merancang untuk bersara

  • Merancang untuk menguruskan harga dsb

Dengan pelbagai sasaran kewangan, tidak hairanlah kita berusaha untuk menambahkan simpanan dan sumber kewangan selama bertahun lamanya sehingga memakan selama 20-30 tahun dan mungkin lebih lagi!


Jelasnya, walaupun ianya akan melibatkan kos untuk mendapatkan khidmat perancang kewangan professional, sekiranya ini dapat membantu anda untuk jangka masa panjang, harga dibayar akan dirasakan berbaloi. Malah, jika perancang kewangan dapat membantu anda membuat keputusan lebih baik secara tidak langsung kos terlibat terbayar dengan sendirinya samada penjimatan akibat terhindar dari kesilapan kewangan mahupun lebih efisien dalam rancang kewangan dan pelaburan.

#2. Apabila Anda Tidak Mahir untuk Mengendalikan Kewangan Sendiri


Sebahagian individu tidak mahir untuk menguruskan kewangan sendiri. Namun, perkara ini bukanlah satu kelemahan kerana yang paling penting adalah anda sedar akan kedudukan kewangan diri dan mahu mencari jalan untuk memastikan ia tidak menjadi lebih teruk.


Oleh sebab itu, adalah amat penting untuk anda mendapatkan khidmat nasihat daripada pakar untuk mengendalikannya. Salah satu kaedah yang boleh diambil adalah mendapatkan nasihat perancang kewangan berlesen.


Perancang kewangan yang mandiri boleh memberikan khidmat kewangan secara menyeluruh atau holistik daripada segi perlindungan insuran, simpanan dan pelaburan malah persaraan dan juga pengurusan harta.

#3. Anda Memerlukan Pendapat yang Tidak Berat Sebelah/Neutral


Ramai orang yang lebih selesa untuk DIY dan tidak akan meminta nasihat perancang kewangan kerana mereka merasakan ia lebih jimat.


Contohnya, anda ingin melabur dan walaupun anda telah menjalankan kajian dan membaca terlebih dahulu, ia tidak akan dapat menandingi kepakaran mereka yang berada dalam bidang pelaburan. Sebagai manusia, adakalanya keputusan yang diambil mengikut emosi dan tidak rasional atau tidak sesuai dalam situasi semasa.


Mendapatkan khidmat perancang kewangan akan dapat menyelamatkan anda daripada membuat keputusan yang salah atau tidak sesuai dan pada masa yang sama tidak melepaskan peluang yang hadir – ia bukan sahaja boleh memberi ruang untuk meningkatkan pulangan pelaburan, malah terhindar daripada risiko kerugian yang besar.

Berapa Kos untuk Mendapatkan Perancang Kewangan?


Mereka yang melantik perancang kewangan perlu sentiasa berhubung atau bertanya kepada perancang kewangan sebelum membuat sebarang keputusan kewangan atau pelaburan yang besar.


Walaupun terdapat segelintir yang beranggapan kos membayar penasihat kewangan adalah sangat mahal,namun masih ramai yang belum mengetahui pelbagai pakej yang dapat ditawarkan oleh perancang kewangan. Daripada itu, anda boleh menilai dan melihat sendiri daripada sudut ‘cost benefit analysis’ dalam membuat keputusan anda.


Khidmat yang boleh ditawarkan oleh perancang kewangan adalah berbalik semula kepada situasi kewangan anda. Contohnya, berikut merupakan khidmat yang ditawarkan oleh firma penasihat kewangan Wealth Vantage Advisory:


Financial Health Check


Modular Financial Planning


atau secara holistik dengan Full Financial Planning

Bagaimana Anda Mahu Memilih Perancang Kewangan yang Tepat?


Semasa memilih perancang kewangan, sudah tentu anda mahukan perancang kewangan yang dapat memahami matlamat atau ‘financial goals’ anda serta berpengalaman mengendalikan situasi individu yang hampir sama dengan keadaan anda dan paling penting untuk anda berasa selesa semasa berurusan dengannya. Jadi, anda mendapat kebebasan untuk membuat keputusan berdasarkan penilaian yang diberikan dan tidak berasa tertekan atau terburu-buru dalam memutuskan hal kewangan.


Kenali Perancang Kewangan Bertauliah


Jangan mengadaikan urusan kewangan anda kepada orang yang tidak mengendahkan keadaan kewangan anda, tapi sebaliknya mendapatkan nasihat daripada profesional yang boleh dipercayai.


Untuk mengenali lebih lanjut para perancang kewangan yang sedia berkhidmat untuk membantu anda mencapai matlamat kewangan, boleh merujuk di sini


Untuk pihak majikan pula, pelbagai inisiatif boleh dilaksanakan di tempat kerja bagi memperkasakan pembangunan kakitangan. Salah satunya dengan menjalankan Program Sejahtera Kewangan atau Financial Wellness Program (FWP). Kos yuran boleh dituntut dengan HRDCorp dan terdapat pelbagai topik berkaitan pengurusan kewangan peribadi dan yang berkaitan dengannya. Setiap sesi FWP menawarkan sesi Nadi Kewangan (Financial Pulse) untuk pekerja mengetahui keadaan kewangan mereka tanpa dikenakan sebarang caj tambahan.


Bagi mendapatkan maklumat lanjut tentang bagaimana anda boleh melaksanakan FWP di tempat kerja, sila tekan link ini

Kesimpulan


Melantik perancang kewangan bagi memantau dan memberi nasihat secara profesional masih melibatkan kos tertentu. Namun, apabila anda memilih perancang kewangan yang betul, semua kos yang perlu dibayar adalah sangat bermanfaat dan berbaloi bagi merancang kewangan anda.


Tidak dapat disangkal, ramai yang sering tersasar atau terkeluar daripada perancangan mereka sendiri samada sedar atau tidak. Dengan adanya pendapat kedua daripada mereka yang arif dalam perancangan kewangan, anda akan lebih tenang, tidak terbeban dan rasa hidup lebih aman. Mulakan langkah dan inisiatif awal dengan perubahan sikap kewangan yang baik!

Apakah langkah yang anda buat untuk mula merancang kewangan?


About the Author: Juliyana Mohd Yatim

Juliyana Mohd Yatim supports the firm in the Business Development unit. Prior joining Wealth Vantage, Julie has worked in banking, investment, and retail industry for more than 10 years. She received a BBA (Hons) in Finance from University Technology of MARA. Her current role, Julie is responsible for the firm's unique program known as FWP or “Financial Wellness Program" to be embedded as part of the Employee Development Program by turning FWP into a Growth Strategy. This task gave her a great opportunity to personalise and customise the program based on employers’ needs and prioritisation.

Updated: Aug 26, 2022

By Felicia Lim


Having trouble coping with your investment losses? Learn about these steps you can take before starting again.

There are different types of investment vehicles or assets classes that we can have to grow our net worth. We can utilize them to achieve different life goals. Common types of investment vehicles are property, stocks, unit trust, and saving plans; with many more available for an investor to explore.


While everyone would certainly want to reap profits all the time, the reality is that setbacks do occur.


If you are nursing an investment that is not doing well, or have recently exited from one, and are uncertain about how to proceed, this article has tips for you.

#1. Take a Break


You need to take a break and take a few steps back. Often, people rush about with their busy lives and just continue to pay the cost even if it’s expensive because they don’t feel it.


Think of it as a bleeding wound. Do you just wipe away the blood and go on rushing about, or do you take a moment to analyze what caused the wound and what are the best steps to treat it? Or would you be okay if it turns into an avoidable infection and affects your quality of life.


The same goes for any investment choices that aren’t working out as it could impact your overall financial situation. Hence, gives yourself some space to clear your mind, before you review and make new plans.

#2. Revisit the Life Goals of the Investment


Take another look at the purpose of the said investment. Or perhaps the life goals to which this investment belongs. Typically, the most common life goals are wedding funding, children’s education fund, haj planning, retirement funding, and many more which depend on your desires.


It is vital to be aware of the purpose so you can have a clear view of its exit plan – when it needs to be sold off to achieve your goals. The time frame is critical as it determines your short-term and long-term strategy as in to hold, sell, or switch, when possible.

#3. View the Failing Investment Against Overall Asset Allocation


Do list down all your assets and put in the holding of each asset. Calculate the holding percentage of each asset against the total asset, setting the total assets as 100%.


Quite often people asses their investment holdings by number instead of by percentage. Both are true hard facts, but they can give you different viewpoints. For example, RM50,000 could be 8% or it could be 50% of your overall asset allocation. This is significant since those holding 8% will be more relaxed and feel any decisions will have a smaller impact on their lives compared with those holding 50%.

If you have not yet explored the percentage of your failing investment against your overall asset allocation, do it now.

#4. Explore the Learning Points


List down what you did well, and what you want to continue to maintain moving forward. Examples of learning can be your understanding of your own risk appetite, your understanding of the legal process if for property investment, your gain in life experience, and many more.


In life, there are always things to learn. Sometimes we are too focused on what we lose and forgot about what we gain. You will gain some learning from each experience. A holistic learning experience would bring you joy and motivate you with more exposure to different things in life.

#5. Review What Went Wrong


List down what went wrong and how you can improve in the future. Some might feel exploring the root cause is painful and avoid doing it. Focus on how doing this will grow you, thereby shifting the focus to a positive (personal growth) rather than negative (dwell on mistakes).


The root cause can be either an internal or external factor. Internal factors could be either your own understanding of the investment features; or omission of life purpose tagged to that investment which commonly occurs, and other personal factors. External factors could be surrounding influence, following trends blindly without understanding further and aligned back to self, misleading information received, and others.

#6. Explore Possible Alternatives


List down the possible alternatives to explore which can reduce the financial impact or even enhance your current financial situation. Also, add in the financial impact on a short-term and long-term basis.


Doing this will enable you to have a clear holistic picture of the dos & don’ts together with the respective financial impact. By focusing on the data, you can reduce the emotional element & have more justifiable factors to consider as part of your financial decision-making process. The same method can be also adopted when you want to kick start a new investment plan in the future.

#7. Focus on What You Can Control


With all the above input, you are now able to make a wiser decision on what to do next. After all, action is the most important and critical step of any plan. Taking action means you can choose to take it or leave it instead of sitting on it and being affected emotionally due to it.


There are times when external factors that are out of your hands come into play. If that happens, just focus on what you can take control of at the current moment and move on. You might want to monitor or revisit from time to time as you chose to hold on to the investment. Make a decision and move with it.


#8. Consider Getting Professional Advice


Some people might feel a little overwhelmed by the above. Whether it leads to overthinking, or an inability to take action, it may be valuable to get a licensed professional’s opinion.


In Malaysia, financial planning is a regulated activity and a person needs to be licensed to give financial advice. You may check their licensing status on the Securities Commission website. Select one that you are comfortable talking with and let them be part of your financial planning journey.

Conclusion


Experiencing an unpleasant situation that brings you disappointment, sadness, or even fear is common in life. However, realizing it is an experience you can learn and grow from can motivate you to continue exploring the world of investing, especially since it’s essential to growing your money so you can achieve more in life.


Register your name here and get connected to a licensed financial planner for professional help.


About the Author, Felicia Lim


Felicia is a Licensed Financial Planner attached with Wealth Vantage Advisory. As an accounting graduate, her dual certification helps her serve multi-cultural clients better. With the technical skills & knowledge of various solutions on hand, Felicia can differentiate her role to the client. Besides that, Felicia communicates well with clients during the fact-finding process and diagnose their issues. Each proposal comes along with a comparison, justification & the relevant impact on the client’s financial goal. Her approach is always to act in the client’s interest first and it has been embedded in her diagnosis & solutions which is the root cause of the issue to be solved for the benefit of a client.


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