KUALA LUMPUR (Nov 5): Exchange-traded funds (ETFs) in Malaysia are seeing renewed momentum thanks largely to younger investors, according to the stock exchange operator.
Investors are showing growing interest in ETFs — investment funds tracking a basket of securities and traded on a stock exchange — for their low cost and diversified exposure, said Leong See Meng, director of securities market at Bursa Malaysia Bhd (KL:BURSA).
“Younger investors are becoming more discerning in how they construct their portfolios,” Leong said. “They recognise that ETFs offer broad exposure and risk diversification at a fraction of the cost of traditional mutual funds.”
The average daily trading value of ETFs has risen to RM1.41 million as at end-October 2025, up 53% from last year's data. The number of retail accounts investing in ETFs has also increased to over 6,100 as at end-October 2025, compared with about 4,700 at the end of last year.
ETFs have long suffered from low trading volume since its first introduction in Malaysia more than two decades ago. There are now 15 ETFs listed on Bursa Malaysia, after two were recently delisted due to their small fund sizes and high operating expenses.
“What we see is a quiet momentum that has built up since day one,” Leong said.
Leong was speaking at a press conference following the launch of the FTSE4Good Bursa Malaysia ETF — the country’s first sustainable and responsible investment-qualified ETF.
One of the long-standing problems plaguing the industry is distribution. Leong noted that investor education is crucial to developing the ETF market, an area that Bursa Malaysia is actively focusing on.
An ETF campaign two weeks ago led to a significant increase in new account openings for ETF trading and investments, Leong said, stressing the need to maintain the momentum through continuous engagements.
“We foresee a promising future for ETFs, as they remain one of the most effective instruments for investors to build diversified portfolios with low entry and management costs,” he added.