AIA Singapore introduces first Shariah-compliant ILP fund

Investment firm Franklin Templeton is a partner for this product.

AIA Singapore has partnered with global investment management firm Franklin Templeton to launch, AIA Shariah Global Diversified Fund, the country’s first Shariah-compliant ILP fund.

The product will be made available to customers 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.

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.

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.

“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, Chief Investment Officer of AIA Singapore.

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