Bank Islam Malaysia Berhad’s wholly owned subsidiary, BIMB Investment Management Berhad has announced its new wholesale Islamic fixed income fund, BIMB Shariah IncomePlus Fund (BSIF).
The fund aims to provide sophisticated investors with a low risk investment portfolio offering a regular monthly income distribution, in the form of cash or additional units.
According to BIMB Investment, its latest offering invests in a portfolio combination of cash and Sukuk as underlying assets that offers a higher cumulative return to sophisticated investors while preserving their capital.
“The launch of this fund is timely given the current low interest rate environment. BSIF offers corporate investors the opportunity to diversify and rebalance investment portfolio in cash and high investment-grade sukuk” said BIMB Investment Chairman, Mohamed Ridza bin Mohamed Abdulla.
The fund aims to also provide a regular monthly income distribution and capital growth over the medium to long-term investments. Additionally, BSIF is tax-exempted and tax vouchers will be shared with investors.
70 to 90 percent of the fund will be invested in cash instruments while the rest 10-30 percent of the fund will be invested in Sukuk Investment.
“Corporates have witnessed the reduction of the overnight policy rate (OPR) by 100 bps this year alone, bringing the OPR level to 2.00%. Looking forward, the benign inflation outlook provides further room for monetary easing with prospects of another 25 bps cut from the current OPR level. BSIF is an alternative for corporate investors given the low deposit rate due the reduction of OPR. Exposure of at least 10% in high investment-grade sukuk provides a kicker to BSIF returns. Based on our indicative portfolio, BSIF has a potential to generate return of 3.18% per annum (p.a) despite the current low interest rate environment,” said BIMB Investment Chief Executive Officer, Najmuddin Mohd Lutfi.
Through BSIF, sophisticated investors are able to purchase units of the fund with a minimum initial investment of RM10,000 with subsequent additional investments starting from RM5,000.
BSIF annual management fee is 0.15% p.a with a trustee fee of 0.03 percent p.a.