AmIslamic fund eyes RM75m deposits

 

AmIslamic Bank Bhd launched yesterday its second Islamic structured deposit, the AmMomentum Select Islamic Negotiable Instrument of Deposit (NID-i).

The new product is aimed at providing a safe and profitable haven for investors. The minimum investment is RM70,000.

AmBank Bhd retail banking executive director Mahdi Murad said the NID-i, which is expected to raise RM75 million in deposits in a month, will perform in bull markets and protect investors during bear markets.

Mahdi said the NID-i is a highly innovative rule-based asset allocation strategy that uses momentum to decide how to invest in a portfolio of multiple assets.

"The new product automatically avoids underperforming asset classes and takes advantage of bull markets," he said.

Speaking to reporters after its launch in Kuala Lumpur, Mahdi said the NID-i is a four-year syariah-compliant principal protected structure that provides exposure to 100 top syariah-compliant stocks in 44 countries and in four indices, namely equity, energy, agriculture and metal.

"It's a deposit with a fixed tenure and returns linked to the performance of syariah-compliant underlying assets, which may be equities, bonds, commodities, foreign exchange, indices or any combination of these assets."

The fund is suitable for investors who are risk-averse and want to ride on economic recovery but are uncertain which asset classes to invest in and the best time to do so.

AmBank's structured products, treasury and markets senior manager Hoe Cheah Kit said that investors could expect 2 per cent return in the first year.

"Upon maturity, investors will get back the principal and the 2 per cent return if not yet drawn out," he said, adding that the expected average return for the NID-i will depend on how fast the economy recovers.

Hoe noted that in 2007 and early last year, the average return was around 8 per cent.

AmIslamic's first Islamic structured product, launched in September last year, raised RM45 million in deposits and gave a return of 1.5 per cent in the first six months.

The bank is expected to launch another conventional structured product by the year-end.