Bank Islam unveils structured investment fund
BANK Islam Malaysia Bhd (Bank Islam) yesterday launched its first structured investment fund, and hopes the RM300 million health-based product will be fully subscribed in a month's time.

Managing director Datuk Zukri Samat said based on the talks the bank had with prospective local clients, the response has been overwhelming.

The An-Najah Nid-i will invest in healthcare assets globally, across industries and countries, he said, adding that the product will appeal to high net-worth individuals and corporations.

Minimum individual investment is RM50,000 and RM1 million for corporations.

The product, said Zukri, will give clients the opportunity to invest in sophisticated, secure and potentially high-yielding instrument.

"The product offers 100 per cent capital protection when held to maturity but could yield potentially higher returns on maturity," he said at a press briefing in Kuala Lumpur yesterday.

He said based on simulation of historical back testing, the product showed a potential annualised return of between five per cent and 16.4 per cent or an average of 9.3 per cent.

He added that 90 per cent of the fund will be invested in Islamic negotiable instruments to ensure the initial investment sum is protected at maturity while the remaining 10 per cent will be invested in the Baraka Aging Population Index (Bapi) options for yield enhancement.

The Bapi comprises 30 stocks, carefully selected from a basket of 2,400 stocks from the Dow Jones Islamic Market World Index. Zukri said in the last seven years, the index had risen 206.86 per cent.

He added that Bank Islam chose to focus on global healthcare because of the combined factors of longer life expectancy, growing affluence and advancements in treatments for age and lifestyle-related diseases which will generate greater demand for health products and services.

"The demand is also expected to be relatively resilient through economic cycles," he said.

Zukri said Bank Islam is currently working on a couple of new investment products and has plans to launch products for the global market.

He also said that the bank wants to increase its non-fund based income by 5-10 per cent by June 2009, which includes income from its wealth management products.

As at June 2007, non-fund based income constituted 5.8 per cent of the bank's revenue of RM1.03 billion.