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Opportunities in syariah investing
DOING good has always been good for business. Syariah investing does the same too.
The world’s most successful and sustainable businesses are those that drive wide growth and innovations that provide for humanity’s most pressing needs - they consistently show steady growth and dependable profits.
These businesses have lower risk and increased certainty – factors that help them weather global economic storms. How do you find, measure and invest in these businesses? Syariah investing is one way.
It’s not just a faith-based choice
Syariah investing is closely related to Socially Responsible Investing (SRI) that considers ESG factors (Environment, Social, Governance). Syariah investing focuses explicitly on the values of fairness, justice, ethics and transparency – that drive tangible benefits and progress.
A path of growing opportunities
Between end-2010 and end-July 2019, Bursa Malaysia’s syariah-linked indices’ growth outstripped the FBM KLCI’s growth by about 8% – FBM Emas Shariah grew 19%, and the FBM Hijrah Shariah rose 27%. A total of 701 out of 924 companies (excluding REITs and ETFs) on Bursa Malaysia are syariah-compliant, making up over 64% of total market capitalisation.
Amanie Group founder and executive chairman Datuk Dr Mohd Daud Bakar says,“Islamic economics are based on a core concept of balance, its motives and objectives are geared towards the well-being of society. The restrictions ensure that syariah-compliant investments do not bring harm or unsustainable economic growth.”
Syariah-compliant investments fosters an attitude of risk-sharing and mutual responsibility. It prohibits unethical products and excessive leveraging. This resonates with domestic and international investors who seek it to diversify and insulate against the volatility of other asset classes.
Start your journey here
As a global leader in Islamic finance, Malaysia continues to drive a progressive and comprehensive legislative, regulatory, legal, tax and syariah framework.
Launched late 2016, Bursa Malaysia-i, the world’s first end-to-end syariah-compliant investing platform, provides listing, trading, clearing, settlement and depository services, among others. It continues to evolve in sophistication, serving investors and businesses through the Main, ACE and LEAP markets.
As at end-June 2019, Malaysia’s Islamic capital market (ICM) was worth RM2.0 trillion or 62.1% of Malaysia’s total capital market, while Islamic funds management achieved assets under management (AUM) of RM172.9 billion or 21.5% of the total industry.
Global Islamic funds AUM stood at US$83.9 billion, and Malaysia represented the largest Islamic fund assets with 35.8% of total global AUM.
Time to grow your syariah portfolio
Bursa Malaysia-i’s products such as i-Stocks, i-ETFs, i-REITs and exchange traded bonds and sukuk are popular, and you can also widen your reach – via the MyETF Dow Jones US Titans 50, Asia’s first US dollar-denominated syariah-compliant ETF. It provides exposure to the 50 largest Shariah-compliant US companies - blue chips like Apple Inc, Microsoft Corp, Facebook Inc and Exxon Mobil Corp, amongst others, while TradePlus Shariah Gold Tracker ETF provides low-cost, efficient and transparent exposure to commodities.
Start by educating yourself
There are many sources of information you can find online. But it’s hard to tell which one is accurate. Many investors trust a solution offered by Bursa Malaysia - Bursa Marketplace. It caters to all levels of investors, from beginners to experts.
In the learning centre, there’s a list of upcoming events and seminars – join a few, and learn while meeting other investors like yourselves.
Once armed with the basics, you can also access other tools such as market performance updates, analyst recommendations and trading ideas among others. It’s a good place to begin your journey in investing, and it grows with you as your needs become more sophisticated.
As many investors all around the world have found, syariah investing is a valuable portion of any portfolio. It’s time to discover the kind of sustainable wealth you can build for yourself while also creating benefits for society as a whole.
To find out more about Bursa Malaysia-i, visit http://www.bursamalaysia.com/market/islamic-markets/products/bursa-malaysia-i/
Part of a series of articles by Bursa Malaysia to educate, develop and empower everyday investors.