Investment In Brunei

Growing up in Brunei, I was not exposed to the idea of investing my money on assets like Stock, CFD, ETF, Bonds, Unit Trust, etc. And to be honest, it was really confusing to understand to pick which of these products to invest as each of them has different benefits and drawbacks. This post reports you some of my findings about investments in Brunei.

The idea of investment is to use your money to make more money. By buying previously mentioned assets, you may grow your wealth if the value of the assets that you got increased. You may also lose your money if the assets’s value decreases. Before we continue this article, I’d like to put out a disclaimer

This article is strictly my opinion and knowledge about investment. This article is not meant to be taken as a financial advice. I’m not a professional so please get your financial advice from professional. Investment is risky and you may lose your money or even lose all of your money. Take this article with a pinch of a salt and take your due diligence before your commit to investment.

Now, how do we start buying these assets in Brunei, you ask?

In Brunei we only have two local platforms that we can use to invest on some of these assets.

• BIBD Securities
• Baiduri Capital

Maybe Standard Chartered have one but I did’t manage to find one in their website.

As of now, I am in the middle of studying the Baiduri Capital platform so I have yet to have any information about BIBD Securities.

From Baiduri Capital, you can get the followings:-

• ETF
• Bonds
• Unit Trust
• Insurance

With my limited knowledge, let me explain what ETF and Unit Trust are first. Because they look almost similar.

ETF

ETF is a collection of individual stocks that you can buy yourself through Baiduri Capital trading platform. It requires smaller investment capital to start buying ETF. It also has smaller management fee compare to Unit Trust. The big difference is, you can day trade ETF which means you have a more active role in managing your portfolio.

Unit Trust

Whereas Unit Trust, it is much more passive in the investor’s (you) point of view. Unit Trust is a product offered by different investment companies where the company will actively invest on other assets such as Stocks, ETF, Bond, etc. When you invest in Unit Trust, you basically trust your money to these companies to invest in the assets that company is investing.

The big downside of investing in Unit Trust, in my own opinion, is the fact that your fund is not as liquid as ETF. Since you had to go the counter to invest your fund and to withdraw your investment.

But, the value of investing in Unit Trust is that you don’t have to scratch your head figuring out which Stocks, Bonds, Commodity, etc you want to get as the job is already done by the fund manager (the company). Obviously you need to carefully choose the company you want to invest your money.

Photo by Chris Liverani on Unsplash

Profiting From Our Investment

Now, how do we make money from investing these assets.

So far from what I understand.

1. You can sell off your assets once their value in the market increases. The difference between the value of your assets when you sell it off and when you purchase it is your profit.
2. Some Unit Trust offers dividend which can be paid directly to your account or you can opt to reinvest the dividend into your investment, thus compounding your investment!

My Investment

Before I know all of these differences between all of these kinds of assets, I just straight away invest my money on Unit Trust at Baiduri Capital. I know it’s not a wise decision. I have the habit of doing things first and correct it later down the road. Another reason why I rushed my decision is because I don’t want to delay action and if I analyse how too much, I will become more paralysed from taking the next action.

Photo by Markus Spiske on Unsplash

Having said that I want to talk about the two Unit Trusts —Allianz Income and Growth Fund, and Templeton Global Total Return Fund — that I bought and explain to you why I got them. If you also plan to get Unit Trust from Baiduri Capital, be aware that they charge a management fee of 3% to 4% of your total investment. Each Unit Trust requires different amount of management fee, you can consult Baiduri Capital’s financial adviser directly.

There are two reasons why I got them.

1. They both are considered low to medium risk Unit Trust, so the value of the funds are not as volatile as other high risk funds. High risk funds tend to grow or shrink at very high rate, so I could make or lose a lot of money in a short span of time. Low to medium risk funds don’t move that much.
2. Both of these funds offer at least 6% dividend annually based on their previous performance. It is advisable to put the dividend back into the investment as a result, my investment will be compounded. With the “magic of compounding”, I can grow my investment more than 100% after 21 years.

Consider this, if I invest B$ 1,000 every year, and every year my investment grow by 6%. You can have a look at the table below to see how my investment will perform in 30 years.

Seems like a good plan

I just need to be reminded that the result might not be exactly the same as above because sometimes fund may not perform well. And if that happened I probably take out my investment and put them into another different assets. Who knows 🤷‍♀️

Closing Thoughts

Again, there’s always uncertainty when it comes to investment, to protect myself from that uncertainty, I need to risk an amount I willing to lose. So far I like what I have done in my “investment journey”. That is all from me, I might update this article in the future if I have more knowledge in this area, or write a follow up story after my first dividend. Thanks for reading!