First home-grown Syariah-compliant investment fund

BANK Islam Brunei Darussalam (BIBD) is expected to launch soon the first locally developed Syariah-compliant investment fund called Asia-Pacific Al-Kauthar.

Minorhadi Mirhassan, BIBD head of investment banking, said the bank is still "trying to come up with a date" for the launch next month.

This fund is an investment portfolio of Syariah-compliant stocks in Asia-Pacific.

Junita Ishak, BIBD chief investment officer and head of asset management, said, "What we do is that we collaborate with the external fund manager and we do all the approvals and registrations for the facilities needed for the process of the fund's development."

Among external fund managers BIBD is collaborating with is Singapore-based Lion Global Investors which is a specialist in the Asia-Pacific equities. Seventy per cent of its mandate is to focus on the region

Junita said that since the fund is registered in Brunei, the laws of Brunei apply and the authorities including the Brunei International Financial Centre have approved the fund and that the regulatory body will be working closely with the bank.

"The fund is interesting also because we are selling to institutions as well as customers," she said. The fund's syariah compliance is one of the selling points in drawing more institutional customers. "We did a soft launching during the roadshow on March 16th, and that's where we invited all the institutions, and in terms of responses, it was very encouraging," she said.

Junita said while most of the funds brought into Brunei are "domiciled out of the Cayman Islands, or Bermuda, the United Kingdom, or Switzerland, or even Geneva", the Asia-Pacific Al-Kauthar fund is coming out of Brunei.

"On the retail side, it has been encouraging and we have received a lot of inquiries on the product, but people are still looking at how the product will appeal to the public," said Adinah Jamudin, head of securities, services and sales department. She added that at the moment, BIBD "does not have enough hands" to answer all the calls and the inquiries.

The Asia-Pacific Al-Kauthar fund is an open-ended mutual equity fund, which has a sales charge of three per cent and a minimum initial investment of $1,000. There is no fixed period of investment, based on the company brochure, however the fund focuses on long-term investments. "(Investors) can expect a higher return from this kind of investment, and at the same time, would have to accept more risk," stated the brochure. The Brunei Times