Singapore’s first Shariah balanced ILP fund launched

AIA Singapore has partnered with Franklin Templeton to launch the AIA Shariah Global Diversified Fund which will be made available to customers through a series of investment-linked plans (ILPs).

The Fund caters to the fast-growing Muslim consumer base in Singapore.

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. 

“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,” said Liu Chun Yen, AIA Singapore’s Chief Investment Officer.

This Singapore dollar denominated ILP sub-fund is a diversified portfolio of global Shariah-compliant equities and Sukuk (Shariah-compliant fixed income securities) backed by Franklin Templeton which currently manages more than US$3.3 billion 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 – 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.
  • 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.

AIA Investments is hoping the ILP sub-fund will tap into the growth potential of the Islamic finance industry which is projected to rise to US$4.94 trillion in 2025, a significantly upward trajectory of more than 46% from US$3.374 trillion in 2020.

AIA Investments is the largest independent publicly listed pan-Asian life insurance group. It is responsible for managing over US$330 billion in assets.

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