Complete guide to exchange-traded funds (ETFs) in Malaysia (2026)
14 October 2026An exchange-traded fund (ETF) is a fund that tracks an index, commodity or basket of assets and trades on a stock exchange like a share. In Malaysia, you can buy ETFs listed on Bursa Malaysia through a local broker, buy foreign ETFs through an international broker, or invest through a robo-advisor.
Exchange-Traded Funds (ETFs) have transformed investing by offering easy access to a wide variety of assets, including stocks, bonds, commodities, and indices, all within a single fund. Whether you’re looking to invest in Malaysian markets through Bursa Malaysia or gain exposure to global markets like the S&P 500, ETFs provide a flexible and cost-effective way to diversify your portfolio.
Traded on stock exchanges worldwide, ETFs allow investors to buy and sell throughout the trading day with real-time pricing, making them an appealing choice for both new and experienced investors.
The global ETF market continues to grow. ETFs held a record US$24.03 trillion in assets at the end of August 2026, with US$1.96 trillion of net inflows in the first eight months of the year, according to ETFGI.
In Malaysia, interest is rising too. Bursa Malaysia said retail ETF trading accounts passed 6,100 by end-October 2025, up from over 4,700 in 2024, and average daily ETF trading value reached RM1.41 million.
This growth highlights the increasing interest among investors in Malaysia and around the world in using ETFs for diversification and wealth building. Selecting the right ETF involves more than just picking the most popular option. Investors need to consider their financial goals, risk appetite, and market conditions, along with key factors like fees, liquidity, and the underlying index or assets.
What is an Exchange-Traded Fund (ETF)?
An Exchange-Traded Fund (ETF) is an open-ended investment fund designed to track the performance of a specific underlying asset, such as an index, commodity, bond, or other securities. Unlike mutual funds, ETFs trade on stock exchanges, allowing investors to buy and sell shares throughout the trading day at market prices, similar to individual stocks.
ETFs offer a cost-effective way to invest, as they typically have lower fees compared to actively managed funds. Instead of purchasing each underlying asset individually, investors gain access to a diversified portfolio through a single ETF, reducing both cost and complexity.
In Malaysia, ETFs listed on Bursa Malaysia provide exposure to a wide range of markets and asset classes, from U.S. and China equities to ASEAN markets, bonds, and even commodities like gold. This versatility allows Malaysian investors to diversify their portfolios both locally and globally with ease.
Combining the diversification benefits of unit trusts with the flexibility and liquidity of stocks, ETFs present an efficient investment option for building wealth over time.
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What is an index?
An index is a collection of securities—such as stocks, bonds, or commodities—that represents the overall performance of a specific market or sector. It serves as a benchmark to track the price movements and trends within that market, providing investors with a snapshot of its performance over time.
For example, the FTSE Bursa Malaysia KLCI tracks the top 30 companies listed on Bursa Malaysia, reflecting the health and direction of the Malaysian stock market. Similarly, global indices like the S&P 500 represent the performance of 500 leading companies in the U.S., offering insight into the broader U.S. market.
Indices play a crucial role in ETFs, as many ETFs are designed to replicate the performance of these indices, allowing investors to gain exposure to an entire market or sector through a single investment.
Which ETFs are listed on Bursa Malaysia?
Bursa Malaysia's ETF list shows 13 ETFs, 7 of them Shariah-compliant, covering Malaysian and foreign equities, bonds, gold, and leveraged and inverse KLCI products. The FTSE Bursa Malaysia KLCI ETF has been renamed the FTSE4Good Bursa Malaysia ETF and now tracks the FTSE4Good Bursa Malaysia Index.
ETFs combine the benefits of stocks, unit trusts, and index funds, offering diversification, flexibility, and cost efficiency. Traded like stocks, they provide real-time pricing, liquidity, and transparency, with low fees and no upfront charges. Investors can easily access a wide range of markets and asset classes, from Malaysian equities to global indices, bonds, and commodities. Below is a comparison of ETFs available on Bursa Malaysia.
| ETF Name | Ticker | Type of ETF | Shariah Compliant | What does it track? | Fund Manager |
|---|---|---|---|---|---|
| TradePlus Shariah Gold Tracker | GOLDETF | Commodity ETF | Yes | Gold spot price | AHAM Asset Management |
| FTSE4Good Bursa Malaysia ETF | FBMKLCI-EA | Equity ETF | No | FTSE4Good Bursa Malaysia Index | AmFunds Management |
| Principal FTSE China 50 ETF | CHINA50-EA | Equity ETF | No | FTSE China 50 Index | Principal Asset Management |
| TradePlus S&P New China Tracker | CHINEXT-EA | Equity ETF | No | S&P New China Sectors Index | AHAM Asset Management |
| Eq8 Dow Jones US Titans 50 ETF | DJUSTITANS-EA | Equity ETF | Yes | Dow Jones US Titans 50 Index | i-VCAP Management |
| Eq8 Dow Jones Islamic Market Malaysia Titans 25 ETF | DJIM25-EA | Equity ETF | Yes | Dow Jones Islamic Market Malaysia Titans 25 Index | i-VCAP Management |
| Eq8 MSCI Malaysia Islamic Dividend ETF | MYDIV-EA | Equity ETF | Yes | MSCI Malaysia Islamic Dividend Index | i-VCAP Management |
| Eq8 MSCI SEA Islamic Dividend ETF | SEADIV-EA | Equity ETF | Yes | MSCI Southeast Asia Islamic Dividend Index | i-VCAP Management |
| VP-DJ Shariah China A-Shares 100 ETF | CHINA100-EA | Equity ETF | Yes | DJ Shariah China A-Shares 100 Index | Value Partners Asset Management |
| Eq8 FTSE Malaysia Enhanced Dividend Waqf ETF | WAQF-EA | Equity ETF | Yes | FTSE Malaysia Enhanced Dividend Index | i-VCAP Management |
| ABF Malaysia Bond Index Fund | ABFMY1 | Fixed Income ETF | No | Markit iBoxx ABF Malaysia Bond Index | AmFunds Management |
| Kenanga KLCI Daily 2x Leveraged ETF | KLCI2XL | Leveraged ETF | No | 2x FTSE Bursa Malaysia KLCI Index | Kenanga Investors Berhad |
| Kenanga KLCI Daily (-1x) Inverse ETF | KLCI1XI | Inverse ETF | No | -1x FTSE Bursa Malaysia KLCI Index | Kenanga Investors Berhad |
The Securities Commission Malaysia also revised its guidelines in March 2026 to allow digital currency ETFs, and Bursa Malaysia consulted on rule changes to list them. No digital currency ETF is on Bursa's ETF list yet.
Several of these ETFs are Shariah-compliant. See our guide to Shariah-compliant ETFs for local and global options.
What are popular ETFs outside Bursa Malaysia?
The largest and most traded ETFs are listed in the US and Europe, tracking indices such as the S&P 500 and Nasdaq-100, as well as bonds, gold and Bitcoin. Malaysians can buy them through an international broker or a robo-advisor.
Investing in ETFs beyond Bursa Malaysia offers Malaysian investors exposure to global markets, sectors, and asset classes. These international ETFs allow for diversification into U.S. equities, emerging markets, bonds, commodities, and more. With well-established fund managers and broad market coverage, these ETFs provide opportunities for portfolio growth and risk management across various economic cycles.
Below is a comparison of popular ETFs not listed on Bursa Malaysia:
| Fund Name | Ticker | Type of ETF | What does it track? | Fund Manager |
|---|---|---|---|---|
| Vanguard S&P 500 ETF | VOO | Equity ETF | S&P 500 Index | Vanguard |
| SPDR S&P 500 ETF Trust | SPY | Equity ETF | S&P 500 Index | State Street Global Advisors |
| iShares Core S&P 500 ETF | IVV | Equity ETF | S&P 500 Index | BlackRock |
| Invesco QQQ Trust | QQQ | Equity ETF | Nasdaq-100 Index | Invesco |
| Vanguard FTSE Developed Markets ETF | VEA | Equity ETF | FTSE Developed All Cap ex US Index | Vanguard |
| iShares Core MSCI EAFE ETF | IEFA | Equity ETF | MSCI EAFE Index | BlackRock |
| Vanguard FTSE Emerging Markets ETF | VWO | Equity ETF | FTSE Emerging Markets Index | Vanguard |
| Vanguard Information Technology ETF | VGT | Sector ETF | MSCI US Investable Market Information Technology Index | Vanguard |
| Financial Select Sector SPDR Fund | XLF | Sector ETF | Financial Select Sector Index | State Street Global Advisors |
| Energy Select Sector SPDR Fund | XLE | Sector ETF | Energy Select Sector Index | State Street Global Advisors |
| Vanguard Dividend Appreciation ETF | VIG | Dividend ETF | NASDAQ US Dividend Achievers Select Index | Vanguard |
| Vanguard High Dividend Yield Index ETF | VYM | Dividend ETF | FTSE High Dividend Yield Index | Vanguard |
| iShares 20+ Year Treasury Bond ETF | TLT | Bond ETF | ICE U.S. Treasury 20+ Year Bond Index | BlackRock |
| Vanguard Short-Term Bond ETF | BSV | Bond ETF | Bloomberg U.S. 1-5 Year Government/Credit Index | Vanguard |
| SPDR Gold Shares | GLD | Commodity ETF | Gold Bullion | State Street Global Advisors |
| iShares MBS ETF | MBB | Bond ETF | Bloomberg U.S. MBS Index | BlackRock |
| ProShares VIX Mid-Term Futures ETF | VIXM | Volatility ETF | S&P 500 VIX Mid-Term Futures Index | ProShares |
| iPath Series B S&P 500 VIX Short-Term Futures | VXX | Volatility ETF | S&P 500 VIX Short-Term Futures Index | Barclays |
| ProShares Short VIX Short-Term Futures ETF | SVXY | Volatility ETF | Short S&P 500 VIX Short-Term Futures Index | ProShares |
| ProShares UltraPro QQQ | TQQQ | Leveraged ETF | 3x Nasdaq-100 Index | ProShares |
| ProShares Ultra QQQ | QLD | Leveraged ETF | 2x Nasdaq-100 Index | ProShares |
| Direxion Daily Semiconductor Bull 3x Shares | SOXL | Leveraged ETF | 3x PHLX Semiconductor Sector Index | Direxion |
| ProShares Ultra S&P 500 | SSO | Leveraged ETF | 2x S&P 500 Index | ProShares |
| ProShares Short S&P 500 ETF | SH | Inverse ETF | -1x S&P 500 Index | ProShares |
| ProShares UltraPro Short QQQ | SQQQ | Inverse ETF | -3x Nasdaq-100 Index | ProShares |
| ProShares UltraShort S&P 500 | SDS | Inverse ETF | -2x S&P 500 Index | ProShares |
| iShares Bitcoin Trust | IBIT | Bitcoin ETF | Spot Bitcoin | BlackRock |
| Fidelity Wise Origin Bitcoin Fund | FBTC | Bitcoin ETF | Spot Bitcoin | Fidelity Investments |
| Franklin Bitcoin ETF | EZBC | Bitcoin ETF | Spot Bitcoin | Franklin Templeton |
Leveraged, inverse and volatility ETFs are designed for short-term trading and can lose value quickly if held for long periods.
How do you buy ETFs in Malaysia?
There are three main routes: a local broker for ETFs listed on Bursa Malaysia, an international broker for US and other foreign-listed ETFs, or a robo-advisor that builds and manages an ETF portfolio for you.
Investing in ETFs is straightforward, but the method you choose depends on whether you’re looking to invest in local ETFs listed on Bursa Malaysia or global ETFs from international markets. Here are the main ways to buy ETFs in Malaysia:
1. Through the Malaysian stock market
Local ETFs are traded on Bursa Malaysia, just like individual stocks. To invest, you’ll need to open a stock trading account with a brokerage that provides access to Bursa Malaysia. Once your account is set up, you can search for the ETF ticker, place a buy order, and start investing. Bursa-listed ETFs trade in board lots of 100 units.
2. Through an international broker
Malaysia offers a limited number of ETFs, but global markets list thousands across different sectors, regions and asset classes. Some local brokers offer foreign-market trading, usually at higher commissions than local trades. Many investors use international brokers instead. Before opening an account, check:
- that the broker is licensed by the Securities Commission Malaysia or a reputable foreign regulator
- commission per trade and any minimum fee
- currency conversion (RM to USD) fees and custody or inactivity fees
- where the ETF is domiciled, as this affects how much tax is withheld from dividends (see below)
3. Through a robo-advisor like StashAway
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What should I check before investing in an ETF?
Before investing in an ETF, investors should:
- Understand the ETF’s investment objective, underlying assets, and risks.
- Compare the ETF’s expense ratio, liquidity, and historical performance.
- Consider the fund manager’s reputation and track record.
- Evaluate whether the ETF aligns with their investment goals and risk tolerance.
Do Malaysians pay tax on US ETF dividends?
Usually yes, at source. The US withholds 30% of dividends paid by US-domiciled ETFs to Malaysian residents, because Malaysia has no income tax treaty with the US. Ireland-domiciled (UCITS) ETFs holding US shares typically pay 15% US withholding at fund level instead, under the US–Ireland treaty.
In Malaysia, foreign-sourced dividends received by resident individuals are exempt from income tax until 31 December 2036, subject to conditions. Tax rules change, so check LHDN guidance or a tax adviser for your situation.
| Feature | US-domiciled ETF (e.g. iShares Core S&P 500, IVV) | Ireland-domiciled UCITS ETF (e.g. iShares Core S&P 500 UCITS, CSPX) |
|---|---|---|
| Listed on | NYSE Arca (US) | London Stock Exchange |
| US tax on US dividends | 30% withheld from distributions to Malaysian residents | Typically 15%, paid at fund level |
| Expense ratio | 0.03% (per prospectus; iShares, 9 Oct 2026) | 0.07% (iShares, 9 Oct 2026) |
| Income | Pays out dividends | USD share class accumulates (dividends reinvested) |
Examples only, not recommendations. Both funds track the S&P 500.
How much do ETFs cost, and why do fees matter?
You pay two main costs: a brokerage fee each time you buy or sell, and an annual expense ratio deducted from the fund. Large index ETFs can charge as little as 0.03% a year, and small differences in fees compound over time.
One of the biggest advantages of ETFs is their cost-effectiveness. Unlike actively managed unit trust funds, ETFs typically have lower fees because they are passively managed and designed to track an index. However, while ETFs are generally cheaper, it’s still important to understand the fees involved, as they can have a significant impact on your long-term returns.
When buying ETFs on the stock market, investors must pay a brokerage fee, which varies depending on the broker. Many Malaysian brokers charge around 0.05% to 0.10% of the transaction value, subject to a minimum fee, plus a clearing fee of 0.03% (capped at RM1,000 per contract). Stamp duty on ETF trades is currently exempt until 31 December 2028. Additionally, ETFs have an annual expense ratio, which covers management fees, trustee fees, and other administrative costs. In Malaysia, this generally stays below 1% a year for Bursa-listed ETFs, significantly lower than unit trust funds, whose expense ratio averaged about 2% for equity funds (FIMM, 2020 data). For comparison, the US-listed iShares Core S&P 500 ETF charges 0.03% a year and its Irish-domiciled UCITS version 0.07% (iShares, October 2026).
While these percentages may seem small, they add up over time. A higher expense ratio can eat into your investment gains, affecting the overall growth of your portfolio. The table below illustrates how different expense ratios can impact portfolio value over the long term, assuming a 7% annual return and an initial investment of RM10,000:
| Portfolio Type | Expense Ratio | Value after 10 years | Value after 20 years | Value after 30 years |
|---|---|---|---|---|
| Zero-fee portfolio | 0% | RM19,672 | RM38,697 | RM76,123 |
| ETF | 0.6% | RM18,596 | RM34,581 | RM64,306 |
| Unit trust 1 | 1.5% | RM17,081 | RM29,178 | RM49,840 |
| Unit trust 2 | 2% | RM16,289 | RM26,533 | RM43,219 |
Illustration only. Assumes a constant 7% annual return before fees, which is not guaranteed; actual returns vary and can be negative.
As the table shows, even a small difference in fees can result in a significant difference in returns over the long run. This doesn’t mean you should always choose the lowest-cost investment—paying higher fees for a unit trust fund may be worthwhile if you want to rely on a fund manager’s expertise. However, it does mean that investors should carefully consider how fees impact their portfolio’s growth over time.
ETF vs unit trust: what's the difference?
ETFs trade on an exchange throughout the day and usually track an index at low cost. Unit trusts are bought from fund managers or distributors at one end-of-day price and are usually actively managed, with higher fees.
While both ETFs and unit trust funds provide access to a diversified portfolio of assets, they differ significantly in structure, management, and cost. The table below highlights the key differences between ETFs and unit trust funds:
| Feature | ETFs | Unit Trust Funds |
|---|---|---|
| Investing Objective | Mostly passively managed, tracking an index without active selection. | Actively managed (excluding index funds), with fund managers selecting securities to outperform an index. |
| Buy and Sell Transactions | Traded on stock exchanges throughout the trading day at market prices. | Bought and sold through fund management companies or banks at a single price determined at the end of the trading day. |
| Cost to Invest | Brokerage fee and clearing fee apply (stamp duty is exempt until 31 Dec 2028); annual management fee usually < 1% of NAV. | Up to 5.5% upfront sales charge; annual expense ratio averaged about 2% for equity funds (FIMM, 2020 data). |
| Minimum Investment Amount | Bursa-listed ETFs trade in board lots of 100 units; some foreign brokers let you buy a single unit. | Varies by fund and distributor; some funds start from RM50, others from RM1,000. |
| Continuous Pricing | Yes – prices fluctuate throughout the trading day. | No – priced once at the end of each trading day. |
| Transparency | Full visibility of underlying securities. | Limited visibility – most only reveal top holdings. |
| Dividends | Yes – dividends may be distributed to investors. | Yes – dividends may be distributed to investors. |
| Redemption Charges | No redemption charge, but brokerage and other trading costs apply when you sell. | Yes – applicable for specific unit trust funds (e.g., through banks). |
For a deeper look at unit trusts, read our complete guide to unit trusts in Malaysia.
Frequently asked questions
What determines the price of an ETF?
An ETF's price is driven mainly by the value of the assets it holds, known as its net asset value (NAV). Because ETFs trade like shares, the market price moves through the day with supply and demand, so it can sit slightly above or below NAV. Market makers help keep that gap small.
Do ETFs pay dividends?
Yes, some ETFs pay dividends, depending on the underlying assets they hold. If the ETF invests in dividend-paying stocks or interest-bearing bonds, it may distribute dividends to investors. However, some ETFs reinvest dividends instead of paying them out. Investors should check the fund’s distribution policy before investing.
How are transactions in ETFs settled?
ETF transactions follow the T+2 settlement cycle, meaning that when an ETF is bought or sold, the transaction is finalized two business days after the trade date. This is the same settlement process used for regular stocks on Bursa Malaysia.
Is there any risk in investing in ETFs?
Like all investments, ETFs carry risks. The primary risks include market risk, liquidity risk, and tracking error risk. Market risk arises when the value of the ETF fluctuates with changes in the financial markets. Liquidity risk refers to how easily an ETF can be bought or sold without significantly impacting its price. Tracking error risk occurs when an ETF does not perfectly replicate the performance of its underlying index due to fees, management strategies, or market conditions.
How much money do I need to buy an ETF on Bursa Malaysia?
Bursa-listed ETFs trade in board lots of 100 units, so the minimum is about 100 times the ETF's price, plus brokerage and clearing fee (stamp duty is currently exempt for ETFs). For example, an ETF trading at RM1.50 needs about RM150 for one board lot before fees. Some foreign brokers let you buy US ETFs one unit at a time.
Are there Shariah-compliant ETFs in Malaysia?
Yes. According to Bursa Malaysia, 7 of the 13 ETFs on its March 2026 list are Shariah-compliant, including the TradePlus Shariah Gold Tracker and the Eq8 range of equity ETFs. Check each fund's prospectus for its Shariah adviser. Our guide to Shariah-compliant ETFs also covers global options.
What is the Indicative Optimized Portfolio Value (IOPV) for an ETF?
The IOPV is an estimated real-time value of an ETF’s net asset value (NAV) during the trading day. It is updated frequently to give investors an idea of the fair value of the ETF’s holdings. The IOPV helps traders make informed decisions by comparing the market price of an ETF with its estimated fair value.
What is the role of a market maker in ETFs?
A market maker plays a crucial role in ensuring liquidity and efficient pricing for ETFs. They do this by continuously offering to buy and sell ETF shares, helping to minimize the bid-ask spread. Market makers also ensure that ETFs trade at prices close to their NAV by engaging in arbitrage when discrepancies arise.
