Thursday 28 Mar 2024
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KUALA LUMPUR (Dec 3): The world's first agribusiness Shariah exchange traded fund (ETF), My-ETF Thomson Reuters Asia Pacific ex-Japan Islamic Agribusiness (MyETF-AGRI), failed to shine on its debut on Bursa Malaysia. The ETF opened 4 sen discounted and closed 3.1% lower at RM0.969.

The fund, managed by i-VCAP Management Sdn Bhd, opened 4 sen lower at RM0.96 with a total of 22,000 shares traded at the opening. At closing, the fund remained lacklustre, down 3.1% or 3.1 sen at RM0.969, with 1.04 million shares done.

On the fund's performance, i-VCAP chief executive officer Mahdzir Othman said the fund's units traded at a discount to its net asset value (NAV) was within his expectations.

He saw the volume transacted, showing that there were pockets of investors who understand about ETFs taking advantage of the discount to NAV as good opportunity to buy the fund.

"Obviously these investors are well aware of the benefits in ETFs investing — its trading convenience, efficiency against NAV and, more importantly, the low cost as ETF trading involves only minimal brokerage charges as compared to much higher front-load or sales charges by other similar collective investment schemes or funds," he said.

i-VCAP is nevertheless confident of the potential of the ETF market in Malaysia as the company plans to roll out the fifth Shariah-compliant ETF in mid-2016.

"There is a lot of room for ETF acceptance and uptake to grow in Malaysia but this will require time as well as concerted efforts of all players to continue to educate and raise awareness," Mahdzir said.

MyETF-AGRI is i-VCAP's fourth Shariah-compliant product in its MyETF series. It is an open-ended fund with an approved fund size of 500 million units.

The fund will track the Thomson Reuters Islamic Asia Pacific ex-Japan Agribusiness Index, which comprise a diversified basket of 30 Shariah-compliant agribusiness companies that are listed on stock exchanges of 10 selected Asia Pacific countries including Malaysia, Taiwan, South Korea, Australia and New Zealand.

 

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