CIMB Niaga and Principal Indonesia collaborated to introduce Reksa Dana Syariah Principal Islamic ASEAN Equity Syariah, a Shariah compliant mutual fund that allows investors to capitalize on the growth potential of ASEAN economies while adhering to Islamic investment principles.
ASEAN currently ranks as the fifth-largest economic region in the world, with a GDP surpassing US$3 trillion. This economic powerhouse is projected to advance further and become the fourth-largest economy globally by 2050, according to the World Bank.
“Reksa Dana Syariah Principal Islamic ASEAN Equity Syariah is the first US dollar-denominated offshore Shariah mutual fund product in Indonesia focusing on investments in the ASEAN region,” Principal Indonesia Public Relations and Communication Officer Shevani Thalia told IFN Investor.
By being denominated in US dollars, the mutual fund offers several advantages. Firstly, it provides a hedge against local currency risks for investors. Secondly, it grants access to international markets without requiring currency conversion.
The mutual fund aims to grow capital in the long run by investing in at least 80% and up to 100% of its investments in equity Shariah securities, with 0–20% in other Shariah securities and domestic Shariah money market instruments.
Geographically, the fund’s investments in equities as at the 31st May 2024 included Malaysia (41.42%), Thailand (20.62%), Indonesia (18.74%), Vietnam (10.83%) and Singapore (8.39%).
This fund currently does not invest in the Philippines due to Indonesian regulatory restrictions. According to the Indonesian Financial Services Authority, the Philippines has not yet become a country that has fully signed the International Organization of Securities Commissions Multilateral Memorandum of Understanding.
The fund is registered and monitored by Otoritas Jasa Keuangan and complies with European regulatory standards for strong investor protection and a robust risk management framework.
“Though the fund was available since last year in another distribution channel, it is now available for all investors at CIMB Niaga starting from the 25th April 2024,” Shevani noted. With CIMB Niaga, the number of customer outreach channels expanded beyond urban cities to cover much of Indonesia.
Participating investors now have the option to transfer some or all of their investments in this fund to other mutual funds operated by either manager.
CIMB Niaga will provide regular reports and updates on the fund to investors. The bank is also responsible for managing the investments of the fund according to Shariah principles. This includes selecting suitable equities within the ASEAN region that comply with Islamic finance guidelines.
The opinions and viewpoints expressed in the Fund Profile do not constitute as a recommendation for any funds highlighted. The information presented is not investment advice and should not be treated as such.
| Reksa Dana Syariah Principal Islamic ASEAN Equity Syariah (USD) | |
| Fund manager | Principal Indonesia is part of the Principal Financial Group (PFG) |
| Launch date | 11th April 2023, available at CIMB Niaga starting from the 25th April 2024 |
| AuM | US$2.35 million |
| Minimum initial investment | US$10,000 |
| Custodian bank | Standard Chartered |
| Investment objective | Reksa Dana Syariah Principal Islamic ASEAN Equity Syariah (USD) aims for pure capital appreciation by investing in Shariah compliant equities within the ASEAN region while operating in US dollars. Obtain capital growth in the medium to long term through investment in equity Shariah securities issued by corporations and sold in public offerings and/or traded on the stock exchange both domestically and abroad, as well as in other Shariah securities in accordance with Shariah principles in the capital market. |
| Valuation period | Daily |
