Launch of Singapore’s first Shariah-compliant balanced fund backed
by quant investing technology and ESG screening
Focused on Asian stocks, global Sukuks as well as gold ETFs
(From Top Left) Mark Chua (CFA), Fund Manager and Lead Data Scientist, Maybank Asset Management Singapore; Norzulkarnien Nor Mohamad, Head of Islamic Banking, Maybank Singapore; John Lim, Fixed Income Manager, Maybank Asset Management Singapore; Sani Hamid, Director of Wealth Management, Financial Alliance Islamic Wealth Advisory (FAiWA) at the virtual Media Briefing of Maybank Asian Growth and Income - Islamic fund on Zoom
Singapore, 14 October 2021: Maybank Asset Management Singapore (“MAMS”) has launched Singapore’s first Shariah-compliant balanced fund named Maybank Asian Growth and Income – Islamic Fund (the “Fund”). The Fund provides investors a unique mix of securities across Shariah-compliant Asian stocks, global Sukuks as well as gold ETFs. It drives the swift decision making needed in today’s fast-changing investment environment by combining Maybank Asset Management’s proprietary quantitative investing technology with the deep experience of its fund managers.
While Singapore has seen the growth in conventional wealth management solutions, it has lagged in its offerings for Islamic investment solutions. A survey conducted by Financial Alliance’s Islamic Wealth Advisory (FAiWA) has shown that over 80% of participating Muslim investors would prefer Shariah investment solutions if they are available.
Besides benefitting the Islamic community in Singapore, ethically focused Islamic investments will also serve the wealth management needs of investors who want to advocate socially responsible investing or champion Environmental, Social and Governance (ESG) investing.
Contrary to the belief that Shariah investments offer limited potential returns as it is restrictive in scope, a recent market comparison of the Shariah universe of global stocks (DJIM World Index) versus the conventional stock universe (MSCI AC World Index) shows that the global Islamic equity index outperforms the broader global equity index by 56% over a 10-year period and 31% over a 5-year period. *Refer to the chart at the end.
Mr Goh Keat Jin, CEO of Maybank Asset Management Singapore commented, “In line with Maybank’s mission of Humanising Financial Services, we strive to be financially inclusive and innovative. The launch of Maybank Asian Growth and Income – Islamic Fund is an extension of Maybank’s efforts to expand our suite of wealth management solutions to investors. This includes serving the wealth accumulation objective of the Islamic communities in Singapore, Malaysia and Indonesia. Our Fund adheres to Shariah principles and is suitable for investors seeking ‘halal’ returns or looking to diversify their portfolios in new markets. It is catered to socially responsible investors who wish to invest in Shariah-compliant activities.”
Multi-factor assessment includes a stock’s ESG performance
The Fund targets to achieve a potential monthly dividend payout of 5% per annum and an annual return of 6% to 7% by taking an active asset management approach. MAMS is relatively more positive on the economic outlook of Asia-Pacific region as Western developed nations have lower growth potential. Through this Fund, investors will be able to participate in the potential economic upside of Asia-Pacific, excluding Japan.
Mr Mark Chua, MAMS’ Fund Manager and Lead Data Scientist, explained, “Investors may participate in the upside potential of equities and low volatility of Sukuks through our Fund which aims to provide income and capture capital growth from multiple sources. The downside risk is reduced given the diversified portfolio consisting of Sukuk, equity and gold ETF assets.
To curate a list of Asian stocks to own, we are tapping on our in-house quantitative investing expertise on top of using fundamental investing tools. This enables us to react to changing market scenarios quickly in order to seize opportunities in different market cycles. In addition, we have systematically integrated a stock’s ESG performance in our assessment process as part of a multi-factor model. This enables us to prioritise the inclusion of companies with better ESG scores in our Fund, thereby giving our investors access to quality ESG investing.”
Ms Rachana Mehta, MAMS’ Regional Co-Head of Fixed Income, said, “Sukuk, which is a Shariah-compliant bond instrument, offers investors the benefit of stable income growth in a mutual fund portfolio. The Fund utilises our proprietary tools to screen the criteria of thematic, country and credit of available Sukuks in the Gulf Cooperation Council countries and across Asia. We also adopt a structured approach to manage risks in our selection process. As the quantity of outstanding Sukuks remains small compared to conventional bonds, we believe its low supply and wider credit spreads will greatly support the Fund’s returns.” In 2019, Maybank Asset Management successfully launched the Global Sukuk Income - Islamic Fund which has a fund size of approximately S$60 million today.
The new Asian Growth and Income – Islamic Fund is distributed through Maybank Singapore and will be made available to other platforms. The minimum investment sum is S$1,000, and sales charge and fund manager fees apply.
Maybank Asset Management has won several accolades for its fund management expertise, including the Asia Asset Management’s Best of the Best Awards 2021, Global Brands Magazine Awards 2021, Global Economic Awards 2021, and Lipper Fund Awards in 2019, 2020, and 2021 respectively.
* Chart of the performance of global Islamic equity index versus global equity index
Source: Bloomberg as at 28 February 2021; Global Islamic Equity Index (DJIM World Index); Global Equity Index (MSCI AC World Index). Disclaimer: Past performance is not an indication of future performance.
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