26/05/2020
This article raises an issue that we, as EAFAI, have been raising for a while: that most of the Unit Trust Funds, over 80%, are invested primarily in bank deposits and government paper. We need more diversification for the sake of investors - spreading risk and seeking better returns. For the diversification to happen, we will need to expand oversight and governance of funds to include fund Trustees who are not conflicted - the current set up where only banks are trustees of unit trust funds tends to skew investments of Unit Trust Funds towards the banking sector. We need to have corporate and other entities who are not conflicted to become trustees of Unit Trust Funds.
The Capital Markets Authority recently released its First Quarter statistical bulletin showing what I believe is one of the biggest risks facing our financial sector.