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Overview

The strategy’s investment objective seeks to maximize total investment return consisting of profit income and capital gains in the long-term through investments in MYR-denominated sukuk.

Key Features of Franklin Malaysia Sukuk Strategy

A Stable Asset Class

As an asset class, Malaysia Sukuk issuances are domiciled in a country that is generally regarded as a “defensive market” in the Asia region due to its relative economic stability and low market volatility, owing to the country’s world-class Islamic finance infrastructure, an established Shariah legal framework, comprehensive capital market regulations, and conducive tax policies for both Sukuk issuers and investors. In addition, corporate fundamentals are generally strong and default rates remain low.

This asset class has the potential to generate steady long-term returns, higher yield and lower volatility as it is anchored by a stable institutional investor base with strong capital positions and long investment horizon.

Source: Malaysian Sukuk: A Superior Alternative to Traditional Bonds | Franklin Templeton APAC (ftinstitutionalapac.com)

Combining global strength with local specialization

We are one of the first asset managers to invest in Sukuk and are today one of the largest global independent investment managers in terms of Sukuk AUM. We have a local and regional investment team in Kuala Lumpur and Dubai that are recognized for their expertise in managing Sukuk strategies. The team has full access to global insights and expertise of fixed income investment, trading and risk professionals within Franklin Templeton’s well-established, integrated global platform.

Franklin Templeton’s Sukuk Expertise

The strategy is managed by the Franklin Malaysia Fixed Income & Sukuk investment team, who are based in Kuala Lumpur, a major Sukuk issuance hub. It consists of a team of experienced investment professionals who have been managing global Sukuk mandates since 2011 and Malaysia Sukuk mandates since 2012.

The team believes that a portfolio of diversified, actively managed positions has the potential to generate the most attractive returns over a full market cycle. The team’s investment process uses a mix of bottom up, top down and quantitative approaches. The process and structure are well suited to deal with the research requirements, challenges and opportunities the Sukuk market presents.