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China AMC to co-launch shariah China fund

The collaboration with RHB Asset Management comes at a time when Malaysian investors have poured money into China-focused equity funds, Morningstar data shows.

China Asset Management Company (China AMC) in Hong Kong and Kuala Lumpur-based RHB Asset Management have collaborated to launch a China shariah-compliant fund in Malaysia, according to a China AMC statement.

RHB AM, which is a subsidiary of RHB Investment Bank, manages $11.9bn in conventional and Islamic products.

Shariah-compliant funds are invested in line with basic Islamic principles. For example, no stocks may derive income from gambling, alcohol, tobacco, pork products, adult entertainment or military equipment. The principles also restrict the use of some mainstream financial instruments such as debt-financing, charging interest or the use of derivatives.

The new fund will invest in shariah-compliant Chinese equities, which include China A-shares, H-shares, Islamic real-estate investment trusts (REITs) and Islamic ETFs, according to the statement. It will be advised by Raymond Jing, portfolio manager at China AMC in Hong Kong.

The tie-up comes at a time when China equity funds are becoming popular in Malaysia. Year-to-date, Greater China equity funds had net inflows of RM 1.88bn ($430m), which is the second highest after Asia-Pacific funds (RM 2.46bn in net inflows), according to data from Morningstar Direct.

The partnership aims to combine China AMC’s mainland investment know-how and RHB AM’s shariah capabilities to provide investors a broader hunting ground to capitalise on the opportunities available in China, the statement said.

“We aim to capture these opportunities for investors in Malaysia as well as in Southeast Asia,” China AMC’s Jing said in the statement.

Separately, Maybank Asset Management and Schroders have tied up this month to co-develop a range of investment products for Malaysia’s sophisticated wealth investors.

Hong Kong-based Value Partners, which specialises in China and Asia-Pacific funds, also received last month approval from the country’s Securities Commission to set up a fund management firm in the country. The firm’s Kuala Lumpur base will serve as its hub in Southeast Asia for product development, investment and distribution.

Part of the Bonhill Group.