BIMB Arab MY SHA ESG Review
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Brief information: BIMB-Arabesque Malaysia Shariah-ESG Equity Fund is an open-end wholesale fund incorporated in Malaysia. The Fund seeks to achieve capital appreciation in the medium to long-term. The Fund invests up to 98% of its assets in Shariah-ESG compliant Malaysia and foreign equities and at least 2% in Islamic deposits and Islamic money market instruments.
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Introduction to BIMB-Arabesque Malaysia Shariah ESG Equity:
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund focuses on investing in Shariah-compliant listed companies in Malaysia. Shariah compliance means that the investments are in line with Islamic principles. In addition to being Shariah-compliant, the fund also considers environmental, social, and governance (ESG) factors when selecting companies to invest in. This means that the fund evaluates how well companies manage their environmental impact, social responsibilities, and corporate governance practices.
The fund utilizes machine learning and artificial intelligence (AI) in its investment process. This advanced technology helps analyze the financial and sustainability performance of companies, as well as the quality of their accounting reporting. It also incorporates the insights and opinions of market analysts who cover each company.
What are you investing in?
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund invests in a diversified portfolio of approximately 100 stocks of established domestic and global companies. Using AI technology, the fund selects stocks based on sound financial performance and integrates ESG factors for sustainable investment returns. With a minimum investment of RM500, it offers easy access to the fund’s portfolio. It is the first of its kind in Malaysia to leverage non-financial information (ESG) in a quantitative manner.
Top 10 Holdings | % of TNA |
---|---|
Cash and Cash Equivalents |
4.96 |
Genuine Parts Co |
3.09 |
Lincoln Electric Holdings |
1.99 |
Green Packet |
1.91 |
Petronas Chemicals Group |
1.84 |
PPB Group Bhd |
1.82 |
Hibiscus Petroleum Bhd |
1.76 |
Kuehne Und Nahel International |
1.71 |
IOI Corporation |
1.71 |
MR DIY Group Bhd |
1.71 |
How do you grow your money by investing in BIMB-Arabesque Malaysia Shariah ESG Equity?
When you invest in the BIMB-Arabesque Malaysia Shariah ESG Equity Fund, your money is used to buy shares of listed companies in Malaysia and potentially foreign countries. The fund aims to grow your money by investing up to 98% of its NAV in equities. The portfolio allocation may vary, but typically 70% is allocated to Malaysian companies and 30% to foreign companies. The growth of your investment is tied to the performance of these companies’ shares, but it’s important to understand that stock investments come with risks.
What makes BIMB-Arabesque Malaysia Shariah ESG Equity Shariah Compliant?
Business Activity Screening
Sharia investment principles do not allow investment in companies which are directly active in, or derive more than 5% of their revenue (cumulatively)2 from the following activities (“prohibited activities”):
- Alcohol
- Adult Entertainment
- Cinema
- Conventional Financial Services1
- Defense / Weapons
- Gambling / Casino
- Hotels
- Music
- Online Dating2
- Pork related products
- Tobacco
For Financial Screening
Sharia investment principles do not allow investment in companies deriving significant income from interest or companies that have excessive leverage. MSCI uses the following three financial ratios to screen for these companies:
- Total debt over total asset
33.33% 30.00% - Sum of cash and interest-bearing securities over total assets
33.33% 30.00% - Sum of accounts receivables and cash over total assets
33.33% 30.00%
ESG rating of BIMB-Arabesque Malaysia Shariah ESG Equity
ESG Overall Score: 58 |
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Environmental Score:
47 |
Social Score:
62 |
Governance Score:
64 |
Controversies score: 96 |
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has an overall ESG score of 58, indicating a moderate level of performance in environmental, social, and governance factors.
In terms of the environmental score, the fund has a score of 47, suggesting that there may be room for improvement in environmental practices and considerations within the companies it invests in.
For the social score, the fund has a score of 62, indicating a relatively better performance in social factors such as employee welfare, community engagement, and social impact.
In terms of governance, the fund has a score of 64, suggesting a relatively stronger focus on corporate governance practices, including board structure, transparency, and shareholder rights.
The controversies score of 96 suggests that the fund has a low level of exposure to controversial activities or incidents that could negatively impact its ESG performance.
In conclusion, the BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a moderate overall ESG score. While there is room for improvement in the environmental aspect, it demonstrates relatively stronger social and governance performance.
Analysis of BIMB-Arabesque Malaysia Shariah ESG Equity
Analysis |
Over a 1 Year Period |
Over a 3 Year Period |
Alpha |
0.01 |
-0.61 |
Annualized Standart Deviation |
12.37 |
12.61 |
Beta |
0.79 |
0.75 |
Correlation |
0.88 |
0.78 |
Information ratio |
0.10 |
-0.22 |
Max Drawdown |
-8.32 |
-32.19 |
R/R Ratio |
-0.08 |
-0.17 |
R-square |
0.77 |
0.61 |
Sharpe ratio |
-0.19 |
-0.22 |
Sortinio |
-0.17 |
-0.20 |
Tracking error |
1.93 |
2.48 |
Treynor ratio |
-0.88 |
-1.09 |
Value at Risk normal |
-6.17 |
-6.60 |
Value at Risk normal ETL |
-7.66 |
-8.12 |
Value at Risk Quantile |
-7.28 |
-7.44 |
Variance |
12.74 |
13.26 |
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Alpha conclusion of BIMB:
Alpha is like your “extra credit” in school. If the benchmark index (what you are comparing against) goes up by 5%, and your investment in BIMB goes up by 6%, that extra 1% is your Alpha.The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a slightly positive alpha of 0.01% over one year, indicating slight outperformance. However, over three years, it has a negative alpha of -0.61%, suggesting slight underperformance..
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Annualised Standard Deviation Conclusion of BIMB:
Think of this as a “roller coaster rating.” A higher number means the ride has more ups and downs, making it potentially riskier but also possibly more rewarding. The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has an annualized standard deviation of 12.37% over one year and 12.61% over three years. These values indicate the fund’s historical volatility or risk.
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Beta Conclusion of BIMB:
Beta tells us how closely BIMB follows its benchmark index. If the index goes up or down, we can expect BIMB to behave similarly. A Beta close to 1 means it’s behaving almost exactly like its benchmark.
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a beta of 0.79% over one year and 0.75% over three years. These values suggest that the fund has exhibited less volatility compared to the market during those periods.
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Correlation conclusion of BIMB:
Correlation is like a dance partnership. If BIMB and its benchmark are perfectly in sync, they correlate close to 1. The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a correlation of 0.88% over one year and 0.78% over three years. These values indicate a positive association between the fund’s returns and the market returns during those periods.
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Information ratio Conclusion of BIMB:
The information ratio measures a fund’s risk-adjusted performance relative to a benchmark. It indicates the excess return generated by the fund per unit of risk taken, with a positive value indicating outperformance and a negative value indicating underperformance.
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has an information ratio of 0.10% over one year, indicating slight outperformance relative to its benchmark. However, over three years, it has an information ratio of -0.22%, suggesting slight underperformance compared to the benchmark.
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Maximum Drawdown Conclusion of BIMB:
This is the “worst-case scenario” number. It shows you the biggest drop BIMB experienced at any point in the given time frame. The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has experienced a maximum drawdown of -8.32% over one year and -32.19% over three years. The maximum drawdown represents the peak-to-trough decline in the fund’s value during a specific period
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Risk Reward Ratio Conclusion of BIMB:
This is like the “value for money” metric of investing. A positive number means you’re getting more rewards (returns) than risks, which is generally a good sign.
The R/R (Risk/Reward) ratio of the BIMB-Arabesque Malaysia Shariah ESG Equity Fund is -0.08% over one year and -0.17% over three years. The R/R ratio compares the potential return of an investment to its level of risk.
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R-Square Conclusion of BIMB:
An R-squared close to 1 means that most of BIMB’s performance can be explained by its benchmark’s performance. Knowing if you are considering investing in BIMB or just sticking with a fund that tracks its benchmark is useful.
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has an R-square of 0.77% over one year and 0.61% over three years. These values indicate the proportion of the fund’s returns that can be explained by movements in its benchmark or market index.
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Sharpe Ratio Conclusion of BIMB:
This ratio measures how much reward you’re getting for each unit of risk. The higher the number, the better the risk-reward trade-off. Lower values indicate that the investment may not be worth the risks involved.
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a negative Sharpe ratio of -0.19% over one year and -0.22% over three years. These values indicate that the fund’s return has not adequately compensated for the level of risk taken during those periods.
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Sortino Ratio Conclusion ofBIMB:
The BIMB-Arabesque Malaysia Shariah ESG Equity fund has had negative one-year and three-year Sortino Ratios of -0.17% and -0.20%, respectively, indicating poor returns relative to the risk involved.
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Tracking Error Conclusion of BIMB:
This tells us how well BIMB mimics its benchmark. A lower number is good here, as it means it is tracking its benchmark well.
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a tracking error of 1.93% over one year and 2.48% over three years. These values indicate the average deviation of the fund’s returns from its benchmark during those periods.
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Treynor Ratio Conclusion of BIMB:
Think of this as another “bang for your buck” measure but taking into account how the market is doing. Higher numbers are better, showing you’re getting a good return for the market risk you’re taking.
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a negative Treynor ratio of -0.88% over one year and -1.09% over three years. These values indicate that the fund’s excess return has not adequately compensated for the level of systematic risk taken during those periods.
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Value at Risk Conclusion for BIMB:
VaR is like your weather forecast but for investment loss. It gives you an estimate of how much you could lose with a certain level of confidence.The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a Value at Risk (VaR) normal of -6.17% over one year and -6.60% over three years. These values represent the estimated maximum potential loss at a certain level of confidence.
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Value at Risk Normal ETL Conclusion for BIMB:
Value at Risk Normal Expected Tail Loss (VaR ETL) is a risk measurement tool that estimates the average tail loss beyond normal based on historical returns, assuming an asymmetric normal distribution.The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a Value at Risk (VaR) normal Expected Tail Loss (ETL) of -7.66% over one year and -8.12% over three years. These values represent the estimated average potential loss beyond the VaR level at a certain level of confidence.
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Value at Risk Quantile Conclusion:
In conclusion, the Value at Risk (VaR) Quantile estimates VaR by ordering the historical return series from lowest to highest. It measures the potential maximum loss of an investment portfolio at a specified confidence level.
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a Value at Risk (VaR) quantile of -7.28% over one year and -7.44% over three years. These values represent the estimated maximum potential loss at a specific quantile level.
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Variance Conclusion:
Variance is another measure of how much BIMB’s performance varies. Higher variance means higher unpredictability. But remember, with high risk can come high reward — or, unfortunately, high loss.
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has a variance of 12.74% over one year and 13.26% over three years. These values represent the average squared deviation of the fund’s returns from their mean return, indicating the level of volatility or risk in the fund’s performance.
Conclusion
The BIMB-Arabesque Malaysia Shariah ESG Equity Fund has an overall ESG score of 58, indicating a moderate level of ESG integration in its investment approach. The fund’s environmental score is 47, reflecting the consideration of environmental factors in its investment decisions. The social score is 62, suggesting a relatively stronger focus on social considerations. The governance score is 64, indicating a reasonable level of attention to governance factors.
From a technical analysis perspective, the fund’s R-square values of 0.77% over one year and 0.61% over three years indicate a moderate level of correlation between its returns and its benchmark or market index.
On the risk-adjusted performance side, the fund’s negative Sharpe ratios of -0.19% over one year and -0.22% over three years suggest that the returns have not adequately compensated for the level of risk taken.
Furthermore, the negative Treynor ratios of -0.88% over one year and -1.09% over three years indicate that the fund’s excess return per unit of systematic risk has been negative.
In terms of risk metrics, the fund’s tracking error of 1.93% over one year and 2.48% over three years indicates a moderate level of deviation from its benchmark. The Value at Risk (VaR) normal quantile of -7.28% over one year and -7.44% over three years represents the estimated maximum potential loss at a specific quantile level.
Overall, investors considering the BIMB-Arabesque Malaysia Shariah ESG Equity Fund should carefully evaluate its ESG criteria, risk metrics, and performance indicators in light of their investment objectives and risk tolerance. It is important to conduct thorough due diligence and consider consulting with a financial advisor to make informed investment decisions.
Happy Investing!