RHB AM, which is a subsidiary of RHB Investment Bank, manages $11.9bn (£9.3bn, €10.4bn) in conventional and Islamic products.
Shariah-compliant funds are invested in line with basic Islamic principles. For example, no stocks may derive income from gambling, alcohol, tobacco, pork products, adult entertainment or military equipment. The principles also restrict the use of some mainstream financial instruments such as debt-financing, charging interest or the use of derivatives.
The new fund will invest in shariah-compliant Chinese equities, which include China A-shares, H-shares, Islamic real-estate investment trusts (REITs) and Islamic exchange-traded funds, according to the statement. It will be advised by Raymond Jing, portfolio manager at China AMC in Hong Kong.
The tie-up comes at a time when China equity funds are becoming popular in Malaysia. Year-to-date, Greater China equity funds had net inflows of RM 1.88bn (£349m, $430m, €392m), which is the second highest after Asia-Pacific funds (RM 2.46bn in net inflows), according to data from Morningstar Direct.
The partnership aims to combine China AMC’s mainland investment know-how and RHB AM’s shariah capabilities to provide investors a broader hunting ground to capitalise on the opportunities available in China, the statement said.
“We aim to capture these opportunities for investors in Malaysia as well as in Southeast Asia,” China AMC’s Jing said in the statement.