AIA Singapore has partnered with Franklin Templeton to introduce the first Shariah Balanced ILP fund in Singapore catering to a fast-growing Muslim consumer base.
The AIA Shariah Global Diversified Fund will be made available through these investment-linked plans (ILPs) - AIA Pro Achiever, AIA Pro Achiever 2.0, AIA Pro Lifetime Protector, AIA Pro Lifetime Protector (II) and AIA Invest Easy (Cash/ Supplementary Retirement Scheme (SRS).
Existing customers of these plans may perform a fund switch or a top-up into this fund.
Liu Chun Yen, Chief Investment Officer, AIA Singapore, who also a member of the Sustainability in Insurance Committee (SIC) in Singapore, said: "AIA Singapore is thrilled to be Singapore's first insurer to be launching the Shariah Balanced ILP fund to meet the increasing demand amongst Muslim consumers here where such investment options are limited.
"The overlap between Shariah-compliant finance and Environmental, Social and Governance (ESG) principles will also see non-Muslim consumers interested in the fund to maximise capital growth while investing responsibly."
Shariah-compliant funds do not invest in industries or businesses whose underlying activities are involved in any non-halal items such as gambling, alcohol, tobacco, pork and adult entertainment, to name a few. These funds also do not invest in interest-bearing instruments.
This Singapore dollar denominated ILP sub-fund is a diversified portfolio of global Shariah-compliant equities and Sukuk backed by the expertise of award-winning fund management house Franklin Templeton which currently manages more than US$3.3bn in Shariah-compliant strategies globally.
The asset allocation of the ILP sub-fund is as follows:
- Templeton Shariah Global Equity Fund: Providing diversification benefits by investing principally in Shariah-compliant equity and equity-related securities across geographies and sectors including Healthcare, Energy and Info Tech. Quality of the portfolio is constantly upgraded to own more defensive, dividend-paying holdings in a late cycle environment with resources allocated to pursue the best long-term investment opportunities in overlooked market segments.
- Franklin Global Sukuk Fund: Investing in Sukuk - Shariah-compliant fixed income securities - which is the second-biggest sector in Islamic Finance and a rapidly growing asset class. Global sukuk outstanding rose by 12.7% within a year to reach US$711.3 billion in 2021. Green and sustainable Sukuk volumes increased by 17.2% year-on-year to US$15 billion last year[2].
- Franklin Shariah Technology Fund: Capturing potential in technology which continues to see accelerated growth as businesses prioritise digital transformation. The investment team seeks to own the best ideas across each one of the sub-themes that are supportive of Digital Transformation with ESG analysis embedded into their fundamental investment process.
Clement Lee, head of retail sales, Southeast Asia, Franklin Templeton said: "As one of the leading global asset managers with dedicated expertise and a strong track record in Shariah investing, we are delighted to partner with AIA Singapore for the launch of the Shariah Balanced ILP fund and we are very excited to make Shariah-compliant solutions more accessible to investors in Singapore."
Managed by AIA Investments, the ILP sub-fund will tap into the growth potential of the Islamic finance industry which is projected to rise to US$4.94trn in 2025, a significantly upward trajectory of more than 46% from US$3.374trn in 2020.
AIA Investments is responsible for managing over US$330bn in assets. It has one of the largest teams of investment professionals in Asia Pacific, consisting of more than 250 investment specialists. AIA Investments' approach to investment management is focused on delivering superior long-term sustainable results.
AIA was recently recognised for its ‘Achievement of Compliance' for the third consecutive year by the CFA Institute's Global Investment Performance Standards (GIPS®) as an asset owner in Asia and globally.
