CIMB-Principal Asset Management Bhd yesterday launched a syariah-compliant fund as it aims to capitalise on the country's strong economy and the well-performing stock market.
The fund, CIMB Islamic Al-Azzam Equity Fund, will focus on companies with healthy cash flows and high dividend yields, mainly in oil and gas, plantations and consumer discretionary sectors.
"Having witnessed a slowdown in several European economies, Malaysia is likely to outperform its regional peers ... and the local authority remains optimistic as Malaysia is believed to stay resilient," said CIMB Principal deputy chief executive Munirah Khairuddin.
Speaking to reporters at the launch of the fund, Munirah said the government's 110 initiatives introduced under the Economic Transformation Programme, worth RM177 billion, would help stimulate the economy.
"We are confident that investors of our fund would be able to capitalise on the consistent capital growth from the medium to long-term time horizon this fund has to offer," said Munirah.
She pointed out that the time to invest is now, despite what is happening in Europe.
"Malaysia has attracted a fair bit of foreign funds seeking a safe haven amidst current volatile Asian markets. Even foreigners are investing here, what more us," she said.
Munirah said asset allocators will continue to position monies in Malaysia as long as regional volati-lity remains and this has lifted Malaysia's price earnings ratio premium contribution to the region to a high of 38 per cent.
Additionally, the premium is also justified by the 11 per cent higher Malaysian's earnings per share growth contribution to the region.
She added that investors to the Al-Azzam fund can have access to companies such as Axiata, Tenaga Nasional Bhd, IOI Group and DiGi, with a minimum investment of RM500.
The fund has an approved size of 600 million units, priced at 25 sen per unit during the initial offer period between now and August 21.
Munirah said that syariah-compliant unit trust funds continue to gain popularity among non-Muslims because the equity component of such funds can be less volatile and more defensive in nature.
On the expected yield for this new fund, CIMB-Principal chief investment officer Raymond Tang said a 12-month investment would most likely see a return of between three per cent and 3.5 per cent.
"Our market has been performing really well the past year compared to even Singapore and we believe we can do better than the market," he said.
CIMB-Principal has assets under management (AUM) valued at RM33.5 billion and the AUM has been growing at an average of 18 per cent annually.