Malaysia’s Islamic mutual funds see assets decline

2 May 17

Malaysia’s sharia-compliant mutual funds have seen assets under management decline from the peak of 40.7% in March 2016 to 39.4% in March 2017, according to data from Morningstar.

Malaysia's sharia-compliant mutual funds have seen assets under management decline from the peak of 40.7% in March 2016 to 39.4% in March 2017, according to data from Morningstar.

The sharia-compliant funds gathered 1.1bn ringgit ($250m) in the first quarter of 2017, which accounted for 27.7% of all net fund inflows.

The funds’ share of new inflows was significantly lower than during most of the past three years. In particular during the first three quarters of 2016, it hovered at above 60%, coming down to 28.1% in the fourth quarter.

Public Mutual, whose sharia-compliant funds, with 26.5bn ringgit ($6.1bn) AUM, account for 63.5% of the market, gathered 410m ringgit ($95m) of new assets.

The firm’s sharia-compliant Public Ittikal and Public Asia Ittikal funds added 497m ringgit ($115m) net new assets and its two Asean dividend funds added a net 251m ringgit ($58m). Public Mutual’s islamic fixed income and allocation (mixed-asset) funds saw outflows.

Quarterly net inflows into Malaysian mutual funds

Data: Morningstar, in Malaysian ringgit, excluding money market funds

Net flows increase

Malaysian investors added 3.99bn ringgit ($920m) to their investments in mutual funds (islamic and conventional) in the first quarter of 2017, the highest quarterly net inflow since Q2 2015, according to data from Morningstar.

Equity funds added 1.6bn ringgit ($380m), allocation (multi-asset) funds attracted 1.2bn ringgit ($280m) and fixed income funds, excluding money market, gathered 1.1bn ringgit ($260m) in net new flows.