Malaysian Islamic asset management company BIMB Investment Management Berhad further embraced the concept of Shariah-compliant ESG (environment, social and governance) investment with the launch of another fund on March 10.

The company launched the BIMB-Arabesque Malaysia Shariah-ESG Equity Fund, in partnership once again with the global asset manager Arabesque Asset Management Holding of the UK, which will invest in Malaysian listed companies using artificial intelligence technology.

In launching the fund, BIMB Investment chairman Khairul Kamarudin says the company has calibrated its investment processes and strategy by adopting financial technology (fintech) in its fund portfolio construction and management, while integrating both Shariah values and ESG principles in its investment process and philosophy.

“The firm has rebranded and redefined its value propositions to investors as a Shariah-ESG fund house with its partnership with Arabesque Partners,” Kamarudin adds. “This partnership offers the next generation of investment management solutions to retail and institutional investors that are transparent, robust in risk management and sustainable in investment performance.”

BIMB Investment and Arabesque Asset launched Malaysia’s first multi-currency Shariah and ESG-compliant global equity fund in November 2015, called BIMB-Arabesque i Global Dividend Fund I. It is targeted at corporate and individual investors seeking capital appreciation while diversifying their investment abroad in the most cost effective way. Investors can choose to subscribe for the fund in ringgit and US dollar.

The latest fund aims to enhance investment returns over the benchmark by incorporating material sustainability data. The investment portfolio, which is rebalanced monthly, reviews each stock’s risk/return profile by assessing multiple non-financial and financial sectors.

This structured and disciplined process of stock selection through quantitative analysis and algorithms has been built to construct a portfolio for optimal investment performance that is relative to the risk of the fund.

The fund will invest in listed equities – up to 98% of its net asset value – of which at least 70% of the portfolio is allocated to companies in Malaysia, and up to 30% to foreign companies where the regulatory authorities are the ordinary or associate members of the International Organization of Securities Commission.

The fund is utilizing a rules-based investment process into listed companies that are compliant with the principles of the United Nations Global Compact; compliant with the Accounting and Auditing Organization for Islamic Financial Institutions' rulebooks; and Shariah-compliant according to the Shariah Advisory Council of the Securities Commission.

The fund is offered for subscription in ringgit, US dollar, euro and Singapore dollar. The target fund size is 100 million ringgit (US$22.5 million) over a one-year period.

BIMB Investment currently manages six Shariah-compliant retail unit trust funds that offer various investment strategies for individual and corporate clients and five Shariah-compliant wholesale funds.