Malaysia’s i-VCAP launches ETF tracking Thomson Reuters’ APAC ex-Japan Islamic Agribusiness Index

i-VCAP launches the MyETF Thomson Reuters APAC ex-Japan Islamic Agribusiness. November 2015.

i-VCAP Management Sdn Bhd has launched its MyETF Thomson Reuters Asia Pacific ex-Japan Islamic Agribusiness (MyETF-AGRI) fund, that will largely invest in upstream agricultural production businesses.

i-VCAP is Malaysia’s leading exchange traded fund (ETF) manager, and the new fund is its first collaboration with Thomson Reuters as the benchmark index provider for i-VCAP’s MyETF Series. It is also the world’s first agriculture-related Islamic ETF.

i-VCAP is a unit of ValueCap Sdn Bhd, which is owned by Khazanah Nasional BhdKumpulan Wang Persaraan (Diperbadankan) (KWAP) and Permodalan Nasional Bhd.

MyETF-AGRI will look to invest in the 30 constituent companies that make up the Thomson Reuters Asia Pacific ex-Japan Islamic Agribusiness Index and in substantially the same weightings as they appear on the benchmark index.

i-VCAP chief executive officer Mahdzir Othman said the fund does not invest purely in commodity stocks.

He said the MyETF-AGRI provides investors with immediate exposure into a diversified basket of Shariah-compliant stocks that are primarily engaged in upstream agricultural production activities in 10 leading Asia Pacific countries – Malaysia, Singapore, Indonesia, Thailand, the Philippines, Taiwan, Korea, Hong Kong, Australia and New Zealand.

“The earnings in agriculture businesses are resilient; even in economic downturns, they are able to sustain earnings as they produce necessities that people consume,” Othman commented.

The fund is i-VCAP’s second Islamic ETF issued this year, bringing the number of Shariah compliant ETFs in Malaysia to four and 18 in total in the world. It is the fourth in the firm’s MyETF series.

The MyETF-AGRI is an open-ended fund with an approved fund size of 500 million units, it is tentatively scheduled for listing on the Bursa Securities Market on December 3, 2015.

The subscription period for the fund ends November 19, 2015 at MYR1.00 per unit with a minimum subscription size of 100 units.

The global ETF market has closed in on the $3 trillion mark with Shariah-compliant ETFs only registering about $320 million of that total, the firm said.

In Malaysia, Shariah-compliant ETFs make up of over 30 percent of the ETF market.

Malaysia leads in terms of Shariah-compliant ETF products in the world. Malaysia’s four Shariah-compliant ETFs account for some $75 million or 23 percent of the global Shariah-Compliant ETF segment.

The launch of this landmark fund represents many firsts for the industry including being the first agricultural-related Islamic ETF globally and the first sectoral Islamic ETF in the region while reinforcing Malaysia’s position as the global hub for Islamic finance and investment products,” the firm said in a statement.

Othman said the introduction of MyETF-AGRI is expected to further spark awareness among Malaysian investors on ETF as an asset class.

“Investment products such as ETFs are especially appealing within the current market environment as they can provide fair net investment returns because investors are not burdened by high charges and fees,” he said.

He also pointed out that ETFs provide a competitive alternative for retail and institutional investors looking to broaden their investment portfolios over the medium to long-term, as the fees are lower as compared to other collective investment schemes or funds currently offered in the local market.

An ETF is similar to a mutual fund except that it can be bought and sold like a share as it is traded in real time on a stock exchange. Like a unit trust, ETFs provide exposure to a basket of securities but incur lower fees as they are passively managed.

Also read:

Malaysia’s Najib delivers $4.6b boost for stock market

Malaysia’s i-VCAP aims to double AUM to $550m in two years

Malaysia’s ValueCap plans to grow its AUM to $2b by year end

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.