UABOM launches its first Shariah-compliant ESG fund

KUALA LUMPUR – UOB Asset Management (Malaysia)on January 26 launched the United-i Asia ESG Income Fund (UiAIF), which seeks to provide retail investors with income dividends and capital appreciation over the medium to long through sustainable investments.

The fund invests in a diversified portfolio of equities and debt instruments issued by companies across Asia (excluding Japan) region that comply with Shariah principles and adopt environmental, social and governance (ESG) considerations into their business models and practices.

Furthermore, as Shariah principles and sustainable investing promote governance stewardship and value creation, combining these approaches will create a sturdy portfolio for investors’ long-term benefit. Shariah-based investing prohibits interest, security lending and short-selling.

Moreover, it also incorporates negative screening to exclude sectors such as tobacco, alcohol and breweries, weapons and armaments, as well as other non-halal products. This will be complemented by sustainable investing that uses positive screening as a means of selecting the best-performing companies that offer environmentally-friendly products and services, or have socially-responsible business practices.

“At UOBAM (Malaysia), we have enhanced our research and investment processes with the integration of ESG considerations and by pairing fundamental analysis with the use of technology such as artificial intelligence for our portfolio construction,” said Ms Lim Suet Ling, Chief Executive Officer of UOBAM (Malaysia).

“In performing our fiduciary duties to our investors, it is imperative that we play our part in addressing the social and environmental risks and opportunities which the world is facing. To help businesses advance responsibly, we also engage with our portfolio companies to help improve the sustainability of their practices,” she added.

Besides that, with sustainable investing becoming a major force across global financial markets, UOB Asset Management is committed to providing sustainable investment solutions to creating long-term returns for investors across Asia.

In January 2020, UOB Asset Management Ltd, the parent company of UOBAM (Malaysia), become a signatory of the UN-supported Principles for Responsible Investment, which were developed by an international group of institutional investors to encourage the increasing relevance of ESG issues to investment practices.