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i-VCAP Management Launches Shariah-compliant Fund
Chief Executive Officer Mahdzir Othman said the fund is poised to inject fresh impetus into Malaysia's Exchange Traded Fund (ETF) market which for the most part, has been nascent at best.
"However, there is a challenge in terms of investor awareness in the ETF as it has been misunderstood as normal equity stock. More investors are also currently shifting into property," he told reporters after launching the fund here Thursday.
The initial take-up rate for the fund is targeted to be between 20 million-100 million units at RM1.00 per unit, with a minimum subscription size of 1,000 units.
Mahdzir said the company is initiating an advertising and promotions campaign to raise awareness of the ETF among investors.
"Islamic ETFs are suitable for investors seeking a low cost, passive approach to investing in an equity portfolio which comprises Shariah-compliant companies.
"Islamic ETFs can either be used for long-term investment, as an asset allocation tool, or as a flexible intra-day trading instrument," he added.
The MyETF-MMID is scheduled to be listed on the main market of Bursa Securities on March 21, 2014. The subscription period is up to March 12, 2014.
At present, Malaysia has five existing ETFs listed on Bursa Securities, namely, the ABF Malaysia Bond Index Fund, FTSE Bursa Malaysia KLCI, CIMB FTSE China 25, CIMB FTSE ASEAN 40 and i-VCAP's current flagship fund, MyETF-DJIM25.
The MyETF-DJIM25 benchmarks the Dow Jones Islamic Market Malaysia Titans 25 Index, comprising 25 blue-chip Shariah-compliant companies listed on Bursa Securities.
Mahdzir said the ETF is a proven and well accepted product in developed financial markets and it is only timely that Malaysia follows suit.
"The challenge lies in educating investors and providing more ETF options. We hope all parties will make a concerted effort to create a vibrant and dynamic market in Malaysia.
"With support from regulators and industry players, in the long run, ETFs will prove to be a very viable proposition for Malaysians," he added.
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