Making its Bursa Malaysia debut on the 10th December 2024, the latest exchange traded fund (ETF) offering from Eq8 Capital aims to provide Shariah compliant returns while contributing to a charitable cause, explained Capital Executive Director and Acting CEO Syed Umar Abdul Rahman Alhadad.
“The ETF appeals because it is an instrument to generate Waqf assets that comes from its efficiency, transparency and regulatory oversight. Being on Bursa Malaysia means it is highly regulated, just as the rigour a listed company is required to adhere to. The reporting of the Waqf asset utilization will be issued annually to unitholders.”
As an open-ended passively-managed Islamic equity ETF with an initial size of up to one billion units, the Eq8 FTSE Malaysia Enhanced Dividend Waqf ETF is benchmarked against the FTSE Bursa Malaysia EMAS Shariah Factor Enhanced Target Dividend Index. Following the initial Shariah certification, Amanie Advisors will conduct quarterly reviews for compliance.
Fund manager Eq8 Capital, formerly known as i-VCAP Management, may use techniques like indexing – via full or partial replication strategy – to achieve investment objectives. Up to 90% of the fund will be invested in index-designated securities while a 10% cap applies on its assets invested in Islamic money market instruments and/or deposits placed with Islamic financial institutions.
Primary subscription to this fund, denominated in ringgit, is made in multiples of 100 units with participating dealers like Kenanga Investment Bank or as secondary purchases of 100-unit trading lots at Bursa Malaysia.
Syed Umar told IFN Investor this ETF trading on Bursa Malaysia makes it accessible at low entry levels, apart from promoting liquidity and flexibility of holdings. Larger transactions for institutional investors would be via a ‘Creation Unit Block’ process involving multiples of 500,000 units, including redemptions.
Islamic cash financing for meeting redemption requests and for short-term bridging requirements should be for no more than one month and the value is capped at 10% of the fund’s assets. Eq8 Capital can also charge the ‘Establishment Cost’ of no more than RM500,000 over two years.
Ahead of the ETF listing, the top 10 constituents of the benchmark and their respective weightings were:
| No | Company Name | Weightings (%) |
| 1 | Inari Amertron | 10 |
| 2 | Time Dotcom | 10 |
| 3 | Bursa Malaysia | 8.52 |
| 4 | Gamuda | 8.4 |
| 5 | Kossan Rubber | 6.35 |
| 6 | VS Industry | 5.5 |
| 7 | Axis Real Estate Investment Trust | 5.44 |
| 8 | Bank Islam Malaysia | 4.46 |
| 9 | Bermaz Auto | 4.42 |
| 10 | United Plantations | 4.24 |
Annual distributions are made after the financial year closing on the 30th June, with a 50:50 split between the unitholders and the designated charity – which is the nation’s Islamic endowment entity Yayasan Waqaf Malaysia, operating under the auspices of the Prime Minister’s Department.
The Waqf proceeds will be channeled into projects related to education, healthcare, environment, economic empowerment and any other sector deemed beneficial to the community.
*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.
| Eq8 FTSE Malaysia Enhanced Dividend Waqf ETF | |
| Fund manager | Eq8 Capital |
| Launch date | 28th November 2024 |
| Asset class | Shariah compliant equities, money market instruments and deposits |
| Base currency | RM |
| Initial investment | In multiples of RM100 (US$22.47) for 100 units, institutional investors may opt for ‘Creation Unit Block’ process involving multiples of 500,000 units |
| Investment objective | To provide Shariah compliant returns while contributing to a charitable cause |
| Benchmark | FTSE Bursa Malaysia EMAS Shariah Factor Enhanced Target Dividend Index |
| Risk profile | High risk |
| Distribution | Annually after 30th June, with 50% in cash directly to unitholders and 50% to the designated Waqf entity |
