Operating as a Malaysian fund manager specializing in fixed income investments since 2006, Opus Asset Management found that embracing Shariah compliance has enhanced the firm’s appeal among its clientele.
Senior Fund Manager Terry Tan Theam Swee told IFN Investor that while the firm still retains its conventional funds portfolio, its suite of Shariah compliant offerings attracts customers who prefer ethical investments while seeking regular long-term earnings.
Stating that many people still don’t fully understand the intricacies of investing in debt instruments like bonds, Terry said the Shariah branding for the firm’s fixed income funds investing in such instruments helps dispel many concerns – even among non-Muslims.
“For bonds, even corporates shy away from it because they do not understand it.” While many simply choose to focus on what potential returns a fund investment can provide, Terry insisted: “It really matters where your fund is invested in.”
Drawing on the career experience of his boss, Group Chief Investment Officer Siaw Wei Tang, and adding Terry’s own experience as investment manager – combining to span over four decades – showed that fixed income investment returns can match those from blue chip equities in the long term.
While short-term returns may seem higher due to increased volatility in equity values, Terry said these gains can also be quickly wiped out by the same volatility – whereas the risk is far lower with debt instruments.
“It is a space for savings, we believe fixed income should be promoted to even to the man-on-the-street. That’s why we have some unit trust funds where such investment is accessible online and they can serve themselves.”
Opus Asset Management and its Islamic sister firm jointly service three categories of clients, with the entry point for retail investors set at RM1,000 (US$236.90) to buy into unit trust offerings. More sophisticated individuals placing a minimum of RM50,000 (US$11,844) gain access to wholesale funds.
Customized account access with discretionary mandates is available to individuals and institutions investing at least RM2 million (US$473,816). Among offerings to such clients are the Shariah Fixed Income Portfolio and the Shariah Fixed Income Portfolio – Ethical Mandate products, said Terry.
For Shariah assets, Opus Asset would invest in both sovereign and private Sukuk issues. Terry said overall, the firm’s assets under management – including conventional fund offerings – would be about 80% invested in private debt securities.
Due to its client base, Terry said Opus Asset mainly deals in ringgit-denominated investments with a small foreign currency portfolio.
