Templeton plans Islamic funds
SINGAPORE: US fund manager Franklin Templeton plans to offer Islamic equity funds in Malaysia and is setting up a bond investment team in Singapore, a senior executive said yesterday.
Templeton has already hired a country head, two analysts and a compliance person in Malaysia and is in the process of recruiting a fund manager to handle sukuks, or Islamic debt, executive vice-president Vijay Advani said.
Advani said Templeton will initially develop Islamic-compliant equity funds for Malaysia by customising existing funds. It will then consider offering Islamic debt by tapping the expertise of its Middle East affiliate, Algebra.
"We don't rush into any country and then pull out. We do it slowly, methodically," he said.
He added that funds under Franklin Templeton's global equities group did not invest in firms involved in gambling, tobacco or alcohol - in line with the strict Christian values espoused by founder John Templeton - and were thus easier to adapt to Islamic tenets.
"We just need to have some kind of a filter that eliminates certain sectors and stocks," he said.
Demand for Islamic funds has grown strongly in recent years although they still constitute a fraction of total assets under management. According to Ernst & Young, there are currently about 750 Islamic mutual funds globally with combined assets below US$50 billion (RM159 billion).
Turning to Singapore, Advani said Templeton is relocating two bond fund managers to Singapore as part of a plan to build a bond team in the city-state. The two managers will in turn hire others as the firm builds up its Asian bond research capabilities.
Advani said Templeton, which has US$587 billion (RM1.86 trillion) in assets under management, now gets more than 50 per cent of its inflows from outside the US compared with close to zero a decade ago.
"You go where the business is. The indication is that Asia will continue to grow and when that happens, we'll continue to go there." - Reuters
Templeton has already hired a country head, two analysts and a compliance person in Malaysia and is in the process of recruiting a fund manager to handle sukuks, or Islamic debt, executive vice-president Vijay Advani said.Advani said Templeton will initially develop Islamic-compliant equity funds for Malaysia by customising existing funds. It will then consider offering Islamic debt by tapping the expertise of its Middle East affiliate, Algebra.
"We don't rush into any country and then pull out. We do it slowly, methodically," he said.
He added that funds under Franklin Templeton's global equities group did not invest in firms involved in gambling, tobacco or alcohol - in line with the strict Christian values espoused by founder John Templeton - and were thus easier to adapt to Islamic tenets.
"We just need to have some kind of a filter that eliminates certain sectors and stocks," he said.
Demand for Islamic funds has grown strongly in recent years although they still constitute a fraction of total assets under management. According to Ernst & Young, there are currently about 750 Islamic mutual funds globally with combined assets below US$50 billion (RM159 billion).
Turning to Singapore, Advani said Templeton is relocating two bond fund managers to Singapore as part of a plan to build a bond team in the city-state. The two managers will in turn hire others as the firm builds up its Asian bond research capabilities.
Advani said Templeton, which has US$587 billion (RM1.86 trillion) in assets under management, now gets more than 50 per cent of its inflows from outside the US compared with close to zero a decade ago.
"You go where the business is. The indication is that Asia will continue to grow and when that happens, we'll continue to go there." - Reuters
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