This article first appeared in Wealth, The Edge Malaysia Weekly on July 27, 2026 - August 2, 2026

From June 13 to July 15, new funds launched were once again dominated by income products, according to the Federation of Investment Managers Malaysia’s (FIMM) official website.

Among the 11 new funds launched, 10 were income funds that invest across public and private markets and various asset classes, including equity and fixed income.

A product that offers a slightly different value proposition during this period, however, is the Muamalat-i Global Equity Algorithm Fund, which adopts an algorithm-driven investment approach that is accessible to retail investors.

According to its product highlight sheet, the fund is managed in accordance with the shariah concept of Wakalah Bil Istithmar, which refers to an investment agency contract whereby the investor appoints Muamalat Invest Sdn Bhd (MISB) as the investment manager to undertake investment activities on behalf of the investor.

MISB acts in a dual capacity — as the agent in accepting deposits from the investors and as the investment manager in carrying out shariah-compliant investment activities as agreed by the parties. Its shariah advisor is Bank Muamalat Malaysia Bhd while its investment advisor is Level 17 Capital Sdn Bhd.

According to its official website, Level 17 Capital specialises in quantitative investing, with its core competency lying in fully automated quantitative models that are designed without human intervention. The Securities Commission Malaysia’s (SC) Investment Checker shows that the firm is a licensed boutique fund manager.

The fund, which targets an 8% return per annum, seeks to achieve its investment objective by investing in a diversified portfolio of shariah-compliant equities and equity-related securities listed across both developed and emerging global markets.

The shariah-compliant equity-related securities the fund may have exposure to are limited to rights issues and warrants, which are capable of being converted into new shares of the same companies that issue those warrants.

The fund may also utilise exchange-traded funds (ETFs) to gain exposure and diversification across various markets.

Markets that the fund may have exposure include, but are not limited to, the UK, US, Europe and Asia-Pacific.

The product highlight sheet mentions that the algorithm-driven investment approach is developed using quantitative methodologies, forward-looking data and predefined parameters. It applies a four-stage quantitative process that analyses global market data and constructs a shariah-compliant equity investment portfolio.

The first stage starts with “universe filtering”, beginning with an investable universe of about 3,000 active shariah-compliant global stocks, which are filtered based on liquidity, availability of sell-side analysts’ coverage and shariah-compliant screening.

In general, the filtering process applies business activity screening and financial ratios screening. The latter includes cash and short-term investments, debt thresholds, accounts receivable, non-permissible income and denominators, such as market capitalisation or total assets.

Next is the “multi-factor ranking engine”, where the algorithm focuses on two primary pillars to rank the investable stocks. They are “relative valuation”, which assesses a company’s value, and “relative earnings momentum”, which evaluates the strength and consistency of companies’ earnings potential by incorporating analyst earnings revisions and earnings growth as the leading indicators of market trends and price appreciation.

The last two processes are portfolio construction, where the model selects the top-ranked 20 to 30 high-conviction stocks to construct a concentrated portfolio; and disciplined execution, where the fund adheres to a systematic rebalancing schedule, typically on a monthly basis, to maintain investment discipline and respond to changing market regimes.

In the event of adverse or volatile market conditions, the fund manager may undertake temporary defensive positions by holding a higher proportion, or up to 100%, of the fund’s net asset value (NAV) in Islamic liquid assets — for up to six months in order to optimise the portfolio position — which may result in deviations from the fund’s strategic asset allocation.

The fund’s minimum initial investment is RM500 with a minimum additional investment of RM100. It also has a minimum unit holding of 500 units.

The unit trust fund has a sales charge of up to 5% and an annual management fee of up to 1.85%.

Launched by Principal Asset Management Bhd on July 13, it is a sukuk or income fund with US dollar (USD) as its base currency. It invests in a globally diversified portfolio comprising various asset classes, consisting of sukuk, shariah-compliant equities, shariah-compliant equities-related securities and Islamic liquid assets.

The fund is benchmarked against 80% of the Dow Jones Sukuk Total Return Index and 20% of the MSCI ACWI Islamic Index.

Depending on the level of income, the fund will distribute part or all of its distributable income on a monthly basis.

According to its product highlight sheet, the fund’s investment in sukuk and Islamic money market instruments will generally be limited to those rated with at least a minimum long-term credit rating of “BBB-” by international rating agencies and/or at least “A3” by recognised local rating agencies.

Based on S&P Global Ratings and Fitch Ratings, “BBB-” is the lowest rung of investment grade bonds, while “A3” is three full notches above RAM Ratings’ investment grade cutoff.

“However, the fund may allocate up to 30% of the total Islamic fixed income allocation to non-investment grade and/or unrated sukuk and Islamic money market instruments, which will be assessed based on the internal ratings of the manager.”

As at July 20, financial services firm Morningstar shows that the fund allocated 25.96% in equity and 68.13% in fixed income, while preserving 7.44% in cash.

By sector, it allocated the largest bulk to the technology sector at 25.59%, followed by financial services (23.69%), communication services (11.09%), industrials (10.32%) and consumer cyclical (9.91%).

The fund charges an application fee of up to 3% and an annual management fee of 1.2%. It has a minimum initial investment of RM100 for its MYR class and a minimum additional investment of RM100.

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