Saturna launches new Islamic equity fund focusing on ASEAN

Saturna launches new Islamic equity fund focusing on ASEAN

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GLOBAL: Saturna, the wholly-owned Malaysian subsidiary of US-based Saturna Capital, launched today, the ASEAN Equity Fund. The fund is a Malaysian ringgit-denominated, Shariah compliant equity growth fund, which is tailored to capitalize on the expected growth of the ASEAN region. It is available to both domestic and foreign qualified high net worth individuals and institutional investors. In an exclusive interview with Islamic Finance news, Monem Salam, the president and fund manager of Saturna (Malaysia), provides an insight into the unique fund. “The basic idea is to offer a fund that alligns the interest of the fund manager with the investor. The distinct features of the fund in our opinion are more Islamic/ethical than the funds that are available out there,” said Monem. The ASEAN Equity Fund has a low-fee structure, designed to be fair, transparent, and aligned with the long-term interests of unit holders. Exceptional features of the fund include: full disclosure; waiver of management fee and upfront sales charge; low administrative fees (0.25% annually); no withdrawal penalty; and daily liquidity. The most important and innovative part is that there is only a performance fee, which according to Monem is based on the premise: “If the client makes money, then we make money”. Accrued on a daily basis, Saturna obtains a certain percentage (10%) of the growth in the net asset value. “At the end of the year, if the accrual is a positive, the accrued amount will be paid to the fund manager. If it’s a negative, we don’t get paid. We start over the next year,” said Monem. “From that perspective, it is not only very fair but it is very unique and in our view, there is nothing like this in Malaysia. It incorporates risk-sharing elements, which is more in line with Islamic principles.” Commenting on investment avenues, the fund will primarily be invested in companies of the ASEAN-5 (Malaysia, Indonesia, Singapore, Thailand and the Philippines), using the ‘bottoms-up’ and the ‘buy-and-hold’ approach. Demonstrating his confidence in the growth of the ASEAN region and the need for global diversification, Monem highlighted: “Because of the Asian financial crisis, the balance sheets of governments and companies in this region are relatively clean compared to other parts of the world. There are a lot of good stories to tell in this part of the world. Therefore for a GCC investor, investing in ASEAN countries is something that they need to do to be able to diversify outside of the GCC region.”