ASB Dividend: More than cash, power to build wealth
Amanah Saham Nasional Berhad (ASNB) recently announced an income distribution of 5.75 sen per unit for its fund, Amanah Saham Berhad (ASB), bringing relief to investors who eagerly await the ASB dividend announcement every year.
This figure reflects ASB’s ability to continue delivering competitive returns to investors despite a highly challenging domestic and global economic environment, where overall economic growth remains pressured and the local stock market has not performed as strongly as it did in 2024.
The fund manager’s ability to maintain dividends at a rate of over 5% should give investors the confidence to remain invested in ASB for long-term financial benefits.
This is not unexpected, as Amanah Saham Bumiputera (ASB), a low-risk investment transacted at a fixed price of RM1 per unit, continues to deliver dividend returns that are significantly higher than the Maybank 12-month Fixed Deposit benchmark which offers annual returns of only 2.05%–2.1%.
3 Smart Strategies to Manage ASB Dividends for Wealth Growth
Many ASB investors are surely breathing a sigh of relief, as they now have additional financial resources to prepare their children for the new school year. Others may be planning to settle debts, upgrade their gadgets, or purchase new furniture and clothing in anticipation of the upcoming Aidilfitri celebrations.
Undeniably, many view ASB dividends as a “bonus” or extra money to spend, whereas in reality, dividends are an important tool that can help you build a strong savings foundation for the future.
This is because the key requirement for the power of compound interest to grow your investment is the retention of both capital and dividends over the long term. Therefore, dividend withdrawals need to be managed carefully to ensure the investment continues to grow. The following are several steps that can be taken to manage dividends effectively:
1. Avoid withdrawing unless there is an urgent need
If your finances are comfortable, refrain from withdrawing dividends for non-essential purposes. If you are young, consider setting a long-term goal, such as accumulating RM1 million in ASB by age 50. For older investors, the focus could be on building a Retirement Fund. This approach not only helps you build a solid savings foundation but also ensures you have financial resources available to seize investment opportunities when they arise.
2. If withdrawal is necessary, budget before accessing dividends
This step ensures you do not withdraw more than needed. Use the online withdrawal facility via myASNB to access dividends gradually based on your requirements. Some investors withdraw all their dividends at once to avoid repeated trips to the counter. While convenient, withdrawing without a plan often results in the dividends being spent immediately, undermining long-term growth.
3. No urgent need but want to give yourself a reward (‘self-reward’)
For those who are new to investing or have been investing for years but rarely or never withdraw, there may be a desire to reward yourself for successfully maintaining the discipline to stay invested in ASB. If you wish to indulge in a ‘self-reward,’ set a reasonable amount so you can balance the satisfaction of treating yourself while still allowing your investment to grow. For example, consider withdrawing only 20–30% of your dividends to purchase desired items or enjoy a treat at your favourite café.
Conclusion
To manage your ASB investment effectively so that it ultimately becomes a solid savings foundation, dividends should not be viewed merely as an annual bonus or extra money.
Instead, they should be regarded as a powerful tool capable of multiplying your investment. Dividends act as the driving force behind the power of compound interest, which can grow your investment significantly, provided that both capital and dividends are retained over the long term.
Therefore, dividends must be managed wisely to fully enjoy the benefits of long-term investing and to build a robust savings buffer for times of need.
So, what will you do with this year’s dividends? Keep it to grow your investment, use them wisely for personal benefit, or spend them all? The choice is yours!