BIMB MYR Sukuk Income Fund

Launched on the 24^th July 2024 and focusing its investments on Sukuk issued or offered within Malaysia, the BIMB MYR Sukuk Income Fund is a moderate-risk offering that aims to provide a steady income stream over the medium- to long-term.

Issued and managed by BIMB Investment Management, subscription to this fund can be conducted at the branches of its parent firm Bank Islam and via designated physical and online distribution channels. Subscription is open to all investors, subject to applicable restrictions on non-Malaysians.

At least 70% of this fund’s net asset value (NAV) will be invested in sovereign Sukuk issued or guaranteed by the Malaysian government and RM-denominated Sukuk issued by corporations with minimum long-term rating of ‘A3/A-’ and short-term rating of ‘P1/MARC-1’ by either the Ratings Agency Malaysia (RAM) or Malaysian Rating Corporation (MARC).

Assets allowed within this 70% NAV allocation can include other Islamic collective investment schemes.

The remainder of up to 30% NAV can be placed in highly liquid Islamic money market instruments, investment accounts and Islamic deposits with financial institutions that are rated at least ‘A3/A-’ by RAM or MARC.

The single issuer limit for any specific instrument is 20% while the single issuer aggregate limit for multiple asset investments is 25%. This cap can be raised to 30% in both instances for Islamic instruments with the highest long-term credit rating, as issued by any Malaysian or global rating agency.

A lower 10% NAV cap applies for any single investment in Sukuk rated ‘A’ (‘A1/A+’ or ‘A2/A’ or ‘A3/A-’) by RAM or MARC. During adverse market conditions, the fund manager can act to protect the investors’ interest with a temporary defensive position of holding “higher exposure in Islamic liquid assets”.

Classified as a unit trust for Malaysian income tax laws, this fund’s performance benchmark is the 12-month Term Deposit-i Tawarruq profit rate of Bank Islam. Further, “investments in local Sukuk would be driven by the outlook of the central bank’s rates over the medium to long-term horizon.”

Income distribution on a quarterly basis will be in the form of new fund units, with valuation based on the distribution date’s NAV. The fund may obtain Islamic cash financing of no more than a month to meet redemption requests and for short-term bridging requirements, within a 10% NAV cap.

*Disclaimer:  The opinions and viewpoints expressed in the Fund Profile do not constitute as a recommendation for any funds highlighted. The information presented is not investment advice and should not be treated as such. 

Source: BIMB Investment Management