A recent study revealed a surprising statistic: only 2.7% of Malaysians invest in foreign assets outside their Employee Provident Fund. This tiny fraction is at odds with the country’s increasing global connectivity and awareness. The vast majority of Malaysian investors are missing out on significant opportunities beyond our borders. Investing overseas is no longer the exclusive domain of the wealthy elite but an accessible path to portfolio diversification, higher returns, and greater resilience against domestic economic shifts.
Source: StashAway
In this article, we’ll discuss four key reasons why Malaysian investors might benefit from allocating a portion of their assets internationally. Broadening investment horizons can offer various advantages, from accessing fast-growing global markets to benefiting from currency diversification. Whether you’re an experienced investor or just starting out, understanding these benefits could help enhance your financial growth and security. It’s an opportunity for Malaysians to explore the potential that global markets have to offer.
1. Tapping into global growth
In terms of investment returns, Malaysian investors often find greater opportunities in global markets than in the local landscape. The world’s most advanced and liquid stock exchanges, such as those in the United States, have historically generated substantial capital gains that outperform many Malaysian companies.
For instance, tech giants like Apple, Amazon, and Google have delivered exceptional returns, with the NASDAQ Composite surging over 40% even amid the 2020 pandemic. This demonstrates the remarkable growth potential that savvy Malaysian investors can access by looking beyond their borders.
Chart: Capital IQ
Similarly, neighbouring Singapore has a strong and resilient economy, characterized by steady GDP growth and low inflation rates. The Singapore stock market spans a diverse range of sectors, including finance and real estate. Notably, its REIT market is one of the largest in Asia, providing investors with opportunities for stable returns through income-generating