Islamic Fund Management
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Special Schemes
 Industry-Specific Schemes: Only invest in the industries specified in the offer
documents. The investments of these funds are limited to specific industries, e.g.
infrastructure-related industries such as toll roads, power or water concessionaires.
 Index Schemes: The money collected by mutual funds are invested in the underlying
shares of stock exchange indices, such as the Dow Jones or MSCI-related indices.
 Sectoral Schemes: These are funds which invest in a sector of the market, e.g. banking,
financial technology. Sector funds are riskier than equity diversified funds since they
invest in the stocks of a particular sector and reduce their diversification opportunities.
 Alternatives: These funds include venture capital, private equity, hedge funds and
specialist funds, which carry higher risks.
Investment Process
Each AMC will adopt its own unique investment processes, based on its competitive advantage
and inherent strengths n how examples of investment processes.
Figure 3.10: Example 1 of an Investment Process
Bottom-Up
Top-Down
CURRENCYOUTLOOKANDCOUNTRYASSESSMENT
Gross Domestic Product, inflation, trade balance, interest rate outlook
GLOBAL FIXED INCOMEMARKETASSESSMENT
Demand and supply, performance of government securities, market sentiment on yields
MATURITYSTRUCTURE ANDSECTOR ALLOCATION
SECURITIESSELECTION
GLOBAL AND REGIONALFACTORS
Interest rates, stockmarket outlook, economic growth, regional economy, liquidity flow
CREDITANALYSIS
 Qualitative Analysis
 Quantitative Analysis
SECURITIESANALYSIS
 Structure of the fund
 Terms and conditions
 Valuation Analysis
SELL DISCIPLINE
 Change in economics or
sector outlook
 Deteriorating credit
conditions
 Mis-pricing
Sources: Opus Asset Management Sdn Bhd, RAM