Value Partners Malaysia has launched a Shariah China A-Shares 100 ETF, the first-ever A-share ETF that tracks the performance of the Dow Jones Islamic Market China A-Shares 100 index.

The Shariah China A-Shares ETF provides investors exposure to Shariah-compliant stocks within the China A-Shares equity universe. With the quantitative criteria adopted by the Benchmark index, the Shariah China A-Shares ETF provides investors with exposure to China's new economy, allowing them to participate in the country's changing dynamics and positive growth trends of the economic structure as China moves toward focusing on becoming a consumption- and services-led economy. China's new economy includes companies in the technology, consumption, healthcare and 5G space.

The Shariah China A-Shares ETF adopts a full replication strategy, in which the ETF will hold every constituent of the benchmark index, having substantially the same weightings. The product is also Value Partners Malaysia's first ETF to be listed on the local bourse.


The Shariah methodology adopted requires companies to be screened on two levels. The first is a sector-based screen, where companies in the sin sectors (such as alcohol, tobacco, and gambling), pork-related products, conventional financial services, and weapons and defense, are excluded.  The second is a quantitative screening of liquidity and total debt, based on specified and approved metrics. Because of these screens, Shariah-compliant companies usually have strong business fundamentals supported by healthy balance sheets.

To meet its investment objective, the Shariah China A-Shares ETF can invest up to 100% of its net asset value in authorised securities, with an option to invest a maximum of 10% in Islamic collective investment schemes, Islamic money market instruments and/or Islamic deposits.

Durraini Baharuddin, managing director of Value Partners Malaysia said: "We have a long track record of delivering superior investment performance for nearly 30 years and have always striven to provide innovative products to our investors. Our new Shariah China A-Shares ETF is a unique tool for Malaysian investors to capture opportunities in China's new economy within Shariah principles."

"We trust that our new ETF will meet the needs of both institutional and individual investors who wish to find value in the China A-shares market," she added.

Kamal Mustadza, fund manager of Value Partners Malaysia, said: "We have a positive outlook on foreign capital inflows into Chinese markets and continue to remain optimistic. China's continued efforts of developing and improving market accessibility over the years have made the market too big for investors to ignore."