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Malaysian firm rolls out ESG robo platform

BIMB IM started to manage ESG portfolios when it partnered with a UK firm in 2015.
The mechanical arm and a butterfly.

Kuala Lumpur-based BIMB Investment Management, which is a wholly-owned subsidiary of Bank Islam Malaysia, has rolled out a robo-advisory platform to investors in Malaysia.

The platform, which the firm calls “Best Invest”, is an investment mobile application that focuses on shariah-compliant ESG investments, according to a statement from the firm.

Shariah-compliant investments are 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 app offers investors two options, which are the “do it for me” and the “do it myself” functions. The “do it for me” function enables the app to identify and select the most suitable asset allocation based on the investor’s risk profile, while the “do it to myself” function enables investors to make their own decisions.

Partnership with UK firm

BIMB IM’s robo app will make use of existing shariah-ESG funds managed by the firm, according to the statement. The firm has four shariah-ESG funds, which include a global dividend fund, an Asia-Pacific equity fund, a Malaysia equity fund and a global sukuk bond product, according to the firm’s website.

In total, the firm manages around RM 1bn ($230m) in ESG investments, according to the statement.

The firm started to launch shariah-ESG funds in 2015 when it partnered with UK-based Arabesque Asset Management, which is an ESG-quant investment management firm. Arabesque AM makes use of a platform to monitor the sustainability metrics of 4,000 corporations globally. The platform also includes big data, which combines at least 200 ESG metrics.

“We plan to have more shariah-ESG funds in the Best Invest app,” Najmuddin Mohd Lutfi, BIMB IM’s chief investment officer, said in the statement.

Besides its shariah-ESG funds, the firm manages three other Malaysia equity funds and a mixed-asset product. While they are not ESG-focused, they are shariah-compliant, according to the firm’s website.

Separately, other firms have also set their sights on Malaysia’s robo-advisory market. Last year, New York-headquartered Wahed Invest received an Islamic digital investment management license in the country last year. In 2018, Singapore-based robo-advisory firm Stashaway received its fund management licence from the Securities Commission Malaysia to operate in the country. In 2017, Kuala Lumpur-based Farringdon Group launched Algebra, which is a shariah-compliant robo-advisory platform.

Part of the Mark Allen Group.