ING Funds Berhad (ING Funds) is the Malaysian affiliate of ING Investment Management, the investment arm of ING Group. The Company commenced business in 2004 and has since established itself as a leading player in the local fund management industry especially in the shariah investment space. ING Funds offers a comprehensive range of investment solutions for retail, corporate and institutional markets. As at December 2009, it has a total assets under management (AUM) of RM3.5bn – of which more than half are Shariah-compliant assets.
ING Funds’ strength to develop innovative products and services has been a core competitive edge, which has differentiated the company from other players in the fund management industry. ING Funds is known to be the first to introduce many of the award-winning products in the fund management industry. The latest of which is the ING Annual Income Climate Structured Fund; the first Shariah-based close-ended fund that offers five percent annual income distribution for three years plus potential capital upside returns with 100 percent capital preservation in Australian Dollars at maturity. This Fund has demonstrated superior performance since inception.
Government support
The Malaysian Government, in its effort to make and position the country to be a leading Islamic financial centre, launched the Malaysian International Islamic Centre (MIFC) initiative in August 2006. With that, Malaysia holds the distinction of being the first country to have a full-fledged Islamic financial system and has strong emphasis on human capital development in Islamic finance to ensure the availability of Islamic finance talent to leverage on the country’s inherent strengths, advantages and experience to tap the opportunities in Islamic finance.
Since then, there has been a steady growth of shariah investment funds in Malaysia. As quoted from the Cerulli Report 2008, “Malaysia is believed to be the home to more Islamic funds than anywhere else in the world and largest after Saudi Arabia in terms of assets”.
The Malaysian market
Under the MIFC initiatives, the liberalisation of the local Islamic fund management industry, which came along with tax advantage and other incentives, have so far attracted 12 local and international players to set up Islamic fund management outfit in Malaysia to promote shariah investment solutions locally and offshore.
According to the Lipper Hindsight, the number of shariah-compliant unit trust funds grew more than doubled in less than 3 years to 144 as at September 2009 with a total Net Asset Value (NAV) of RM21.2 billion, representing 11 percent of the total NAV of the unit trust industry. This also represents 27 percent of the total NAV of the global Islamic unit trust industry, and ING Funds holds 5 percent of the total NAV of shariah-compliant funds.
Hence, ING Funds is at the forefront in supporting the MIFC initiative and is well positioned to be the Islamic manufacturing hub for ING Investment Management. Aside from being a major shariah investment manager locally, the company launched its maiden Global Shariah Equity mandate last year, which has performed admirably over the past 9 months. ING Funds is planning to launch a full range of offshore shariah funds to tap both domestic and export markets regionally and globally.
Moving forward
Demand for Shariah-compliant investment management products is growing worldwide, with the rising affluence of Muslim investors who wish to invest surplus funds in a Shariah-compliant manner. Another contributing factor is the non-Muslim investors’ desire to diversify their investments through Shariah-compliant or ‘ethical’ funds.
A study conducted by Ernst & Young revealed that Malaysia and Saudi Arabia have emerged as the top destinations for Islamic funds due to the size of their economies and Islamic finance sectors. The development of Malaysian Islamic architecture over the last 30 years has been comprehensive and well planned to ensure that the necessary infrastructure is in place to support the development of Islamic products and services.
Future plans
ING Funds plans to cast their net further and export their expertise in Shariah investment to global markets. ING Funds has proven their capabilities in developing innovative Shariah-compliant products that appeal to local and foreign investors.
As highlighted by Dato’ Steve Ong – “Since the inception of ING Funds, we have been spearheading the development of ING’s Shariah investment capabilities both in the Malaysian and global markets. Together with the cooperation of our affiliates around the world, a global Shariah equity strategy was launched last year”.
These efforts will truly manifest the company’s tagline ‘global investment management, local presence’.
