World’s first South-East Asia syariah ETF listed on Bursa

KUALA LUMPUR: The world’s first South-East Asia syariah exchange traded fund (ETF), MyETF MSCI SEA ISLAMIC DIVIDEND (MyETF-MSEAD) was listed on Bursa Securities on Thursday.

The fund, which is managed by i-VCAP Management Sdn Bhd, had its prospectus launched on April 8.

The MyETF-MSEAD, which is Malaysia’s third syariah ETF, is an open-ended fund with an approved fund size of 500 million units with an initial issue price of RM1 per unit.

The fund tracks the MSCI South East Asia IMI Islamic High Dividend Yield 10/40 Index, which comprises of up to 30 syariah-compliant dividend yielding stocks listed on the stock exchanges in South-East Asian countries. The underlying securities and net asset value are disclosed daily to investors via Bursa Securities and the MyETF Series’ website.

i-VCAP chief executive officer Mahdzir Othman said in a statement that investors would have the convenience of trading on Bursa Securities, just like any ordinary stock. 

“Even though MyETF-MSEAD can be traded like stocks, its price movement is similar to a collective investment scheme or unit trust. However, the benefits for investors when they trade an ETF is that they will never have to incur any front-load or sales charges which are much higher than the trading charges on Bursa Securities. Given the cost efficiency, transparent and yet simple and easy product to understand, ETF is definitely a smart investment alternative for investors,” he said.

He acknowledged that the awareness and education on ETFs should be continuously carried out, as the product was still not well understood in Malaysia.

Meanwhile, i-VCAP also plans to roll out more ETFs on Bursa Securities as this will help to create greater depth and variety for medium to long term retail and institutional investors as well as to further develop the local ETF market.

Pursuant to the closing of the subscription period on April 22, a total of 20 million units of MyETF-MSEAD have been created and subscribed by retail and institutional investors.

“The subscription for MyETF-MSEAD during its initial offering period saw a marked improvement, doubling the subscription amount for our previous ETF launched last year. This reflects that there is growing interest by investors in ETF product and partly due to MyETF-MSEAD being the first regional syariah ETF to be listed,” he said.

MyETF-MSEAD opened at RM1.005 on its trading debut, a slight premium to its net asset value of RM0.9982 and the initial issue price of RM1 per unit. The fund closed at RM0.98 with 353,600 total units traded on its opening day.

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