Aimed at sophisticated investors, the Halogen Shariah Enhanced Income Fund is a wholesale fund launched on the 28th August 2024 – where up to 5% of its net asset value (NAV) can be invested in digital blockchain assets.
Run by Halogen Capital, this fund has two unitholder classes – both need to meet the criteria of ‘sophisticated investors’ set by the Securities Commission Malaysia (SC) and comply with the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework.
Class A investors subscribe to an initial minimum of RM10,000 (US$2,323) and top up with RM1,000 (US$232.3) increments. If these individuals fail to maintain a minimum holding of 10,000 units, the fund manager has the discretion to repurchase the entire holding at the daily redemption price.
The same rules apply to Class B investors, who subscribe to a minimum of RM500,000 (US$116,120) and needing to always maintain at least 500,000 units in this Islamic fixed income fund.
These higher thresholds are to ensure qualified “investors have the financial knowledge, resources and risk tolerance to invest in the fund. This is a common practice amongst wholesale fund operations in Malaysia,” Halogen Capital Executive Director Ahmad Fuad Alhabshi told IFN Investor.
With over 30% of the fund’s NAV invested in ringgit-denominated Sukuk issued by corporate entities, financial institutions, Bank Negara Malaysia and other Malaysian government-related entities, there is a 70% cap for investments in Islamic liquid assets like money market instruments and deposits – including via Islamic collective investment schemes.
The 5% of the fund’s NAV which can be invested in digital assets include Bitcoin, Ethereum, Solana, Polygon, Ripple, Avalanche and Chainlink. “We view these cryptocurrencies as being of sufficient capitalisation, whilst being approved for investment in Malaysia by the SC.”
Adding that these digital assets are allowed by the Shariah Advisory Council of the SC, Ahmad Fuad said the fund’s performance reference benchmark is the Maybank one-month Islamic fixed deposit rate.
Though the fund aims to provide unitholders with a steady income stream, Class A investors are not expected to receive any distributions. “In our experience, most investors prefer the accumulation, as they understand the benefits of compounding returns.”
Distribution to Class B investors is conducted monthly on average, unless the fund manager exercises the contracted absolute discretion not to do so – in view of possible dilution unitholders’ interests.
*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.
| Halogen Shariah Enhanced Income Fund | |
| Fund manager | Halogen Capital |
| Launch date | 28th August 2024 |
| Asset class | Mixed assets, including crypto |
| Base currency | RM |
| Initial investment | Class A: RM10,000 (US$2,323), subsequent multiples of RM1,000 (US$232.30) Class B: RM500,000 (US$116,120), subsequent multiples of RM1,000 |
| Investment objective | To achieve a steady income stream, together with medium- to long-term capital growth by investing in instruments compatible with Shariah guidelines |
| Benchmark | Maybank one-month Islamic fixed deposit rate |
| Risk profile | High risk, for sophisticated investors |
| Distribution | A choice of monthly distributions, with preference to reinvest for capital gains |
