BIMB Investment declares 6% income distribution yields for BIMB ESG Sukuk Fund

BIMB Investment Management Berhad (BIMB Investment), a wholly-owned subsidiary of Bank Islam Malaysia Berhad, has declared income distribution for BIMB ESG Sukuk Fund for the financial year ended 31 October 2020 as follows:

Class(es) of UnitsDenominated CurrencyIncome Distribution Yield (%)
Class ADenominated in Ringgit Malaysia (RM)6.01
Class BDenominated in US Dollar (USD)6.00
Class CDenominated in Singapore Dollar (SGD)6.02
Class DDenominated in Ringgit Malaysia (RM)6.01
Class EDenominated in US Dollar (USD)6.00

“We would like to take this opportunity to thank our investors for their continuous support and investment in our ESG Sukuk Fund which have delivered a 6.0% income distribution yield. There are many Sukuk funds but these funds are based entirely on credit ratings. We have added additional assessments, which are the ESG score and UNGC (United Nations Global Compact) score, that would give additional comfort to investors. The nature of Sukuk is that it has lower investment risks than stocks,” said BIMB Investment Chairman, Mohamed Ridza bin Mohamed Abdulla.

The income distribution yield exceeded its benchmark target of 5 percent.  It is higher than last year’s income distribution yield of 4.12 percent  for the RM denominated class, 4.04 percent for the SGD denominated class and 4.08 percent for the USD denominated class.

The Fund offers investors a subscription in the RM, SGD and USD denomination at 1.25 sen per unit. The Fund gives investors access to investments in the domestic, regional and global Sukuk universe. The minimum investment amount is RM1,000.

“In recent years, shareholders have suffered substantial losses following ESG risk events. Aside from Covid-19, the negative environmental and social impacts on oil spills, factory waste dumping, increased carbon emissions, and unsafe products can be fatal, resulting in severe costs to shareholders. Additionally, poor governance and accounting controls can undermine the success of great business characterised by sustainable, competitive advantages and long term growth prospects. We believe that by incorporating in-depth ESG considerations, we can mitigate these risks,” said BIMB Investment CEO Najmuddin Mohd Lutfi.

He continues, “Sustainable and socially responsible investing remains a huge area of opportunity to tap on, and Covid-19 will accelerate the agenda of sustainable investing. Studies conducted in recent years show that positive and sustainable impact on companies’ long-term financial success, hence resulting in positive returns to investors in the long run.”

The Fund combines both Shariah-compliant principles and Environmental, Social, and Governance (ESG) factors in its selection criteria. The Fund applies Arabesque S-Ray in its ESG screening which systematically combines over 200 ESG metrics with news and data signals from over 50,000 sources across 15 languages.

The Sukuk issuance is assessed on their performance on the normative principles of the United Nations Global Impact (UNGC), i.e. Human rights, Labour rights, Environment, Anti-Corruption.

In addition to their credit risk profile and financial performance, Sukuk issuers are also analysed on their ESG performance. The ESG analysis provides insights and understanding of a company’s management quality and its positioning for long-term success.

The Fund buys investment-grade Sukuk rated at least A3 or ringgit-denominated Sukuk rated at least P1 by RAM Rating Services Bhd. For non-ringgit-denominated Sukuk, the Fund buys papers rated at least BBB- or A3 by Standard & Poor’s, or other equivalent ratings by other rating agencies.

BIMB Investment is the only bank-backed Islamic Asset Manager in Southeast Asia to be the signatory of the United Nations-supported Principles for Responsible Investment (UNPRI).

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