Posted inSingapore

AIA Singapore debuts shariah fund

Existing customers of specific investment-linked plans will be able to invest in Franklin Templeton products.
Malaysia Mosque with Muslim pray in Malaysia, Malaysian muslim with mosque religion concept

The AIA Shariah Global Diversified Fund will be made available to customers through some investment-linked plans, including the AIA Pro Achiever, AIA Pro Achiever 2.0, AIA Pro Lifetime Protector, AIA Pro Lifetime Protector (II) and AIA Invest Easy (Cash/ Supplementary Retirement Scheme.

The product is denominated in Singaporean dollars and aims to meet the increasing demand among Muslim consumers in the country, where such investment options are often limited, according to AIA.

The fund is exposed to a diversified portfolio of global shariah-compliant equities and sukuk, an Islamic financial certificate similar to a bond, by investing in three funds managed by Franklin Templeton.

Diversified exposure

They are the Templeton Shariah Global Equity Fund (45%), Franklin Global Sukuk Fund (40%), and Franklin Shariah Technology Fund (15%).

Incepted in 2012, the global equity fund invests primarily in shariah-compliant equity and equity-related securities in sectors such as energy (17.8%), healthcare (16.7%), and materials (12.0%).

The $85.2m fund is managed by Alan Chua, Peter Sartori, Ferdinand Cheuk and Warren Pustam.

Around 42% of its AUM is invested in North America, followed by 31.8% in Europe and 21.6% in Asia.

The $408.64m global sukuk fund invests in shariah-compliant fixed income securities, with 30.8% in sovereign fixed income, followed by 28.4% in government-related agencies, and 25.6% in corporate financial institutions.

Managed by Mohieddine Kronfol and Sharif Eid, it allocates 65.2% of its AUM to the Middle East or Africa, and 24.3% in Asia.

Launched in February this year, the Franklin Shariah Technology Fund was one of the first-of-its kind available for sale in Europe.

The fund aims to capture opportunities in technology as businesses prioritise digital transformation with ESG analysis embedded into their fundamental investment process.

Franklin Templeton manages more than$3.3bn in Shariah-compliant funds globally as of end of March.

Shariah-compliant funds do not invest in industries or businesses involved in any non-halal items such as gambling, alcohol, tobacco, pork, and adult entertainment. They also do not invest in interest-bearing instruments.

Part of Mark Allen.