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The best way for
you to invest in bonds is through bond funds or fixed income funds. Like
other unit trust funds, bond funds approved by the Securities Commission are
collective investment schemes that pool money from many investors for the
purpose of investing in bonds. The funds are managed by professional
managers and the income earned from the investments is then distributed to
unit holders in proportion to their ownership.
The general bond funds
usually invest in the medium- to long-term bonds while the money market
funds and short-term bond funds invest in short-term bonds. A short-term
bond has a maturity period of less than a year and is technically referred
to as a money market instrument. Islamic bond funds would deal only with
bonds issued by companies under the Syariah principles.
It is expected that more bond products and bond funds will be introduced in
the near future as the Malaysian bond market continues to grow. There is the
Bon Simpanan Malaysia Siri 03 (BSM03) that was released for purchase by
Malaysian senior citizens in January 2002. Read more about this in question
9 on the different types of bonds.
Other than bond funds, you could invest directly in the PDS listed on the
Bursa Malaysia (Malaysia Stock Exchange) such as the CULS or ICULs.
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