I-Vcap will be listing the ETF on Bursa Malaysia on 28 February, according to the firm’s website.
The MyETF-US 50 aims to track the performance of the 50 largest shariah-compliant companies listed in the US, according to its fund factsheet. Its benchmark index is the Dow Jones Islamic Market US Titans 50 Index.
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.
It is the first ETF in the country to track US equities. Malaysia’s ETF market remains small. It has nine ETFs listed on the local bourse, with seven of them being equity ETFs, according to data from Bursa Malaysia.
There are only four asset managers providing ETFs: Affin Hwang Asset Management, AmFunds Management, CIMB Principal Asset Management and I-VCap.
| ETF |
Manager |
Geographic focus |
| Commodity ETF | ||
| Tradeplus Shariah Gold Tracker |
Affin Hwang Asset Management |
– |
| Equity ETF | ||
| FTSE Bursa Malaysia KLCI ETF |
AmFunds Management |
Malaysia |
| CIMB FTSE Asean 40 Malaysia |
CIMB Principal Asset Management |
Asean |
| CIMB FTSE China 50 |
CIMB Principal Asset Management |
China (listed in Hong Kong) |
| Equity ETF (shariah-compliant) | ||
| MyETF Dow Jones Islamic Market Malaysia Titans 25 |
I-Vcap Management |
Malaysia |
| MyETF MSCI Malaysia Islamic Dividend | I-Vcap Management | Malaysia |
| MyETF MSCI South East Asia Islamic Dividend | I-Vcap Management | Southeast Asia |
|
MyETF Thomson Reuters Asia Pacific ex-Japan Islamic Agribusiness |
I-Vcap Management |
Asia-Pacific (ex-Japan) |
| Fixed income ETF | ||
| ABF Malaysia Bond Index Fund |
AmFunds Management |
Malaysia |
Source: Bursa Malaysia
However, assets in ETFs in Malaysia have grown 55% in 2017 from 2013, according to Kianhong Tan, Singapore-based senior analyst at research firm Cerulli Associates, citing data from Morningstar.
Malaysia’s ETF industry (AUM in $m)
“On the retail front, both the Securities Commission (SC) and Bursa Malaysia are trying to increase retail investors’ awareness for ETFs, and this will take time,” Tan told FSA.
He noted that the case is different with institutional investors. “We did hear of some interest regarding the usage of ETFs.”
The SC launched initiatives last year to develop a more vibrant ETF market, which include recommending the lower minimum capital requirement for ETF issuers and the broadening of ETF distribution channels by permitting financial institutions, online platforms and financial planners to offer ETFs to clients via stock brokerage firms.
Overall, Malaysia’s fund total industry had assets of $179bn in October, according to the SC.
