With a surge in demand for Shariah-compliant financing instruments globally, the market share of Islamic financing in Malaysia has increased to 41% as of the end of 2022. Likewise, the shift towards Islamic investments has seen the current domestic Shariah-compliant market capitalization rise to 66% of the total market capitalization in Bursa Malaysia. Malaysian investors are actively seeking opportunities that align with Islamic principles, emphasizing fairness and risk-sharing, as evidenced by the country’s current number one ranking in the Global Islamic Economy Indicator (GIEI) as of 2023, for the 10th consecutive year in a row.
In line with Shariah-compliant demands, Airo, Malaysia’s premier actively managed global macro investment platform, is introducing new Shariah-compliant investment opportunities to local investors. The platform has launched a range of innovative Shariah-compliant portfolios, blending the best of ethical investing with cutting-edge financial technology. Malaysia’s Shariah-compliant equity current market capitalization of USD 253 billion is only 21% of the total global Shariah-compliant equity current market capitalization at USD 1.2 trillion. By tapping into Airo’s Shariah-compliant portfolios, Malaysian investors would have direct access to international Shariah-compliant investment markets, providing a wider range of Shariah-compliant investment and returns opportunities.
One of the essential criteria for Shariah-compliant investments is avoiding riba (interest), gharar (uncertainty), maysir (gambling) or other immoral activities (haram). Additionally, per the principles of Shariah, the debt-to-equity ratio of businesses within the portfolios must not be excessively high. Shariah-compliant portfolios also offer a unique appeal beyond the confines of Islamic principles, with their emphasis on fairness and risk-sharing, and socially-conscious nature making them attractive to a broader range of investors.
“With Airo, investors embark on a journey where financial aspirations meet responsible investing, all within a framework that respects and upholds the principles of Shariah law. In curating our portfolios, we focus on companies with strong management, prioritizing sustainable growth over short-term gains — some key indicators of this include stability in earnings and a strong balance sheet, coupled with the ability to generate free cash flow, to name a few. Our end goal is to ensure that we provide optimal investment opportunities for our clientele,” shared Mr. Sho Toh Yih Jang, Chief Executive Officer of Airo. Part of the platform’s strategy also includes opting for shares in the US stock market, mainly due to its vast market capitalisation, high market liquidity, lower costs, and reduced risk of market manipulation.
What makes Airo’s approach to Shahriah-compliant investing unique, is the application of their proprietary active management strategy, as harnessed in their conventional Balanced, Opportunistic, Contrarian and Adventurous (BOCA) portfolios. This ensures a diversified approach that gets the best possible returns through continuous monitoring and dynamic risk management, aligning investments with current market trends while adhering to Shariah principles.
Airo’s Shariah portfolios have access to the following investment instruments:
(i) global Shariah-compliant equity & sukuk ETFs;
(ii) global Shariah-compliant exchange traded commodities (ETCs);
(iii) global Shariah-compliant equity & sukuk mutual funds;
(iv) direct exposure to global Shariah-compliant equity;
Investors can select from the following portfolio options:
Shariah Conservative Portfolio: Designed for stable, income-generating investments, comprising Shariah-compliant ETFs, sukuks, and stocks. Ideal for investors seeking consistent returns over the long term with a lower-risk profile.
Shariah Balanced Portfolio: Aiming for a balanced return versus risk profile, this portfolio offers a mix of income and growth-oriented Shariah-compliant ETFs, sukuks, and stocks. Suited for investors seeking a balanced approach to investing.
Shariah Growth Portfolio: Maximizing capital growth over the long term, this portfolio invests primarily in higher-risk Shariah-compliant ETFs and stocks. Tailored for investors comfortable with higher levels of risk in pursuit of greater rewards.
To ensure that Airo’s Islamic portfolios are Shariah-compliant at all times, CP Global Fintech Solutions, has engaged Tawafuq Consultancy (an entity registered with the Securities Commission Malaysia) as its exclusive Shariah advisor. This engagement ensures that the underlying investments are consistently aligned with Islamic principles, in adherence to strict guidelines and that investments are made in socially responsible and ethically sound entities. Extending beyond a focus on financial returns, this collaborative effort also re-emphasizes the importance of sustainable investment.
Airo encourages investors to explore the ethical and sustainable aspects of its Shariah-compliant portfolios, underscoring potential benefits for both adherents of Islamic principles and a broader range of investors. The introduction of these portfolios signifies a timely response to the increasing demand for socially responsible and ethical investment options.
Airo is currently available on both Android and IOS platforms. To mark the portfolio launch, users who make a minimum investment of RM 300.00 in any of the three Shariah-compliant portfolios between 19 March to 2 April 2024 will have the opportunity to receive a GrabGifts voucher worth RM 10.00. To start investing in shariah-compliant or regular portfolios, download the app, set up your account with the relevant details, and determine your investor profile, after which, a world of investment opportunities await. For more information, visit https://www.airo.my/
