Younger investors in Malaysia searching for cheaper and more accessible investment products such as exchange-traded funds are rapidly reshaping the country’s investment landscape, with under 35s now accounting for 43% of active retail trading accounts, according to a senior official at Securities Commission Malaysia (SC).
Younger investors accounted for more than half of new retail accounts opened annually over the past five years, Sharifatul Hanizah Said Ali, the SC’s executive director of Islamic capital market, said at Asia Asset Management’s 14th Annual Malaysia Roundtable.
“The question is not whether they will invest, but whether the industry can meet their expectations,” she said in her keynote speech at the roundtable on May 5.
She said younger investors are increasingly participating in equities, ETFs and digital assets and expect better user experience, lower fees and more product choice. “ETFs are gaining strong traction because the appeal is clear – low-cost, simple, accessible.”
But many continue to seek ETF exposure overseas, prompting the SC to push for a broader domestic ecosystem for the funds.
“Expanding our domestic ETF offerings is therefore critical to retaining investment activity at home, and in doing so, we can widen and deepen capital market depth and liquidity,” Sharifatul said. The SC “is taking steps to broaden the ETF landscape. We are expanding the framework to facilitate new asset classes, including digital assets”.
She also highlighted a growing disconnect between young investors’ interest in markets and their retirement planning for the long term.
“The emerging generation entering the capital market is also the least engaged when it comes to retirement savings,” she said, noting that only 6% of members of the Private Retirement Scheme (PRS), a voluntary retirement scheme, are younger than 30.
To address this, she said the SC plans to broaden the investment universe for PRS products by allowing direct access to locally listed ETFs,stocks and real estate investment trusts.
