Franklin Shariah technology fund

Franklin Shariah Technology Fund

Asset Class:

Mutual Fund

Min Investment (S$)

100

People's Rating

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Inception Date

30 March 2022

How Liquid

Very Liquid

Very liquid: Immediately able to liquidate.
Liquid: Only able to liquid at certain times.
Peer to Peer: Only able to liquid with another agreeable person.
Not Liquid: Investment cannot be withdrawn.
Campaign Based: Investor can only withdraw after campaign ends.

Expenses

N.A

Historical Return

N.A

Returns annualised and sourced from Bloomberg
or directly from investment platform.

Franklin Shariah Technology Fund

Disclaimer: IFSG does not intend to offer or solicit anyone to buy these investments, wherever the recipient of this message may be. All investments involve risks and may result in loss. The above information and contents of Investments are for educational purposes only.  You should seek assistance from a licensed financial advisor on investment matters.
Brief information: Franklin Templeton Shariah Funds-Franklin Shariah Technology Fund is a SICAV fund incorporated in Luxembourg. The Fund’s objective is capital appreciation. The Fund invests at least two thirds of its net invested assets in Shariah-compliant equity securities of US and non-US companies, use of technology and communication services and equipment.

This article is currently undergoing the vetting process.

Introduction to Franklin Shariah Global Equity Fund:

Franklin Shariah Technology Fund A (acc) SGD is an investment fund focusing on the technology sector while adhering to Shariah principles. The fund is open-ended and aims to provide investors with capital appreciation by investing in technology companies that comply with Islamic principles. It is constituted in Singapore and follows a Shariah-compliant investment approach, ensuring that investments align with ethical and religious guidelines.

The fund aims to identify undervalued securities within the technology sector and maintain a well-diversified portfolio. By investing in a range of technology companies, the fund seeks to benefit from potential growth opportunities and capitalize on the advancements and innovations in the sector.

What are you investing in?

You are investing in a type of investment fund, UCITS, based in Luxembourg. The purpose of this fund is to help you grow your investment by investing in technology companies’ stocks.

The fund may also distribute some of its earnings to investors, but this distribution is subject to legal and regulatory requirements. If distributions are made, the fund’s value, known as the net asset value (NAV), will decrease by the amount distributed.

Top 10 Holdings % of TNA

Nvidia Corp

9.31
Microsft Corp

8.23

Apple 

7.44

USD Cash

4.80

ASML Holdings

4.11

Servicenow Inc 

3.83

Synopsys Inc

3.73

Salesforce Inc

3.70

Analog Devices

2.79

Advanced Micro Devices

2.78

How do you grow your money by investing in Franklin Shariah Global Equity Fund?

Opportunities and capitalize on the advancements and innovations in the sector.

Investors in Franklin Shariah Technology Fund A (acc) SGD have the potential to participate in the growth of global technology companies while adhering to Shariah-compliant investment principles. The fund’s structure allows for liquidity, as it is open-ended, and it aims to generate capital appreciation over the long term.

What makes Franklin Shariah Technology Fund A (acc) SGD 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 assets
    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 Franklin Shariah Technology Fund A (acc) SGD

ESG Overall Score: 66

Environmental Score:

55

Social Score:

68

Governance Score:

70

Controversies score: 57

Franklin Shariah Technology Fund A (acc) SGD has an ESG Overall Score of 66. It has a moderate commitment to ESG factors, with a relatively weaker score in the environmental aspect (55), a moderate score in the social aspect (68), and a stronger score in the governance aspect (70). The fund has a controversies score of 57, indicating the presence of some controversies associated with its investments or operations.

Analysis of Franklin Shariah Technology Fund A (acc) SGD:

Analysis

Over 1 Year

Alpha

-0.50

Annualized Standart Deviation

26.66

Beta

1.04

Correlation

0.94

Information ratio

-0.17

Max Drawdown

-18.15

R/R Ratio

0.23

R-square

0.88

Sharpe ratio

0.15

Sortinio

0.15

Tracking error

2.62

Treynor ratio

1.14

Value at Risk normal

-10.89

Value at Risk normal ETL

-14.08

Value at Risk Quantile

-10.30

Variance

59.24

  • Alpha conclusion of Franklin Shariah Technology Fund A (acc) SGD:

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 Franklin Shariah Global Equity goes up by 6%, that extra 1% is your Alpha. Franklin Shariah Technology Fund A (acc) SGD has had a negative alpha of -0.50% over the past year. This suggests that the fund has underperformed its benchmark or the broader market during that period.

  • Annualised Standard Deviation Conclusion of Franklin Shariah Technology Fund A (acc) SGD:

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. A 26.66% one-year standard deviation means there have been significant ups and downs over that period.

  • Beta Conclusion of Franklin Shariah Technology Fund A (acc) SGD:

Beta tells us how closely Franklin Shariah Technology A (acc) SGD follows its benchmark index. If the index goes up or down, we can expect Franklin Shariah Technology A (acc) SGD  to behave similarly. A Beta close to 1 means it’s behaving almost exactly like its benchmark.

Franklin Shariah Technology Fund A (acc) SGD has had a beta of 1.04 over the past year. This suggests that the fund’s returns have been slightly more volatile than its benchmark or the broader market.

  • Correlation conclusion of Franklin Shariah Technology Fund A (acc) SGD:

Correlation is like a dance partnership. If Franklin Shariah Technology A (acc) SGD  and its benchmark are perfectly in sync, they correlate close to 1. A correlation of 0.94 is extremely high, meaning Franklin Shariah Technology A (acc) SGD and its benchmark move almost identically.

  • Information ratio Conclusion of Franklin Shariah Technology Fund A (acc) SGD:

This metric tells you how much extra return you’re getting for the extra risk you’re taking by not just investing in the benchmark. Positive numbers are good; they mean you’re getting rewarded for the extra risk you’re taking.

Franklin Shariah Technology Fund A (acc) SGD has had a negative information ratio of -0.17% over the past year. This indicates that the fund has delivered a subpar risk-adjusted return compared to its benchmark or the broader market.

  • Maximum Drawdown Conclusion of Franklin ShariahTechnology Fund A (acc) SGD:

This is the “worst-case scenario” number. It shows you the most significant drop FFranklin Shariah Technology Fund A (acc) SGD experienced at any point in the given time frame. The maximum drawdown for Franklin Shariah Technology Fund A (acc) SGD over the past year is -18.15%. At its lowest point during that period, the fund experienced a decline of 18.15% before recovering. This represents the largest drop in value the fund experienced within that timeframe.

  • Risk Reward Ratio Conclusion of Franklin Shariah Technology Fund A (acc) SGD:

This is like the “value for money” metric of investing. A positive number means you get more rewards (returns) than risks, which is generally a good sign.

Franklin Shariah Technology Fund A (acc) SGD has an R/R (Risk/Reward) ratio of 0.23% over the past year. This indicates that, on average, the fund has generated a positive return of 0.23% for each unit of risk taken.

  • R-Square Conclusion of Franklin Shariah Technology Fund A (acc) SGD: 

An R-squared close to 1 means that most of  Franklin Shariah Technology Fund A (acc) SGD’s performance can be explained by its benchmark’s performance. Knowing if you are considering investing in Franklin Shariah Technology Fund A (acc) SGD or just sticking with a fund that tracks its benchmark is useful.

Franklin Shariah Technology Fund A (acc) SGD has an R-square value of 0.88% over the past year. This indicates a relatively high correlation between the fund’s performance and its benchmark or the broader market.

  • Sharpe Ratio Conclusion of Franklin of Shariah Technology Fund A (acc) SGD:

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.

Franklin Shariah Technology Fund A (acc) SGD has a Sharpe ratio of 0.15% over the past year. This indicates a positive risk-adjusted return, but the ratio is relatively low, suggesting that the fund’s returns may not have fully compensated for the level of risk taken.

  • Sortino Ratio Conclusion of Franklin of Shariah Technology Fund A (acc) SGD:

This is another way of looking at “risk vs. reward,” but it only looks at the downside, or negative risk, relative to the risk-free rate of return. In this case, the low Sortino Ratio of Franklin Shariah Technology Fund A (acc) SGD (0.15%) means that it is not doing as well in generating returns when only considering the downside risk.

  • Tracking Error Conclusion of Franklin Shariah Technology Fund A (acc) SGD:

Franklin Shariah Technology Fund A (acc) SGD has a tracking error of 2.62% over the past year. This indicates the average deviation of the fund’s returns from its benchmark or the broader market during that period.

  • Treynor Ratio Conclusion of Franklin Shariah Technology Fund A (acc) SGD:

Consider this another “bang for your buck” measure, but consider how the market is doing. Higher numbers are better, showing you’re getting a good return for the market risk you’re taking.

Franklin Shariah Technology Fund A (acc) SGD has a Treynor ratio of 1.14% over the past year. This indicates a positive risk-adjusted return relative to its systematic risk.

  • Value at Risk Conclusion for Franklin Shariah Technology Fund A (acc) SGD:

VaR is a measure used to estimate the potential loss an investment may experience over a specific period with a certain confidence level. A negative VaR value represents a potential loss, while a positive value indicates a potential gain.

The Value at Risk (VaR) normal for Franklin Shariah Technology Fund A (acc) SGD over the past year is -10.89%. This represents the estimated maximum potential loss at a specific level of confidence.

  • Value at Risk Normal ETL Conclusion for Franklin Shariah Technology Fund A (acc) SGD:

VaR ETL is a risk measurement tool that estimates the average tail loss beyond normal based on historical returns, assuming an asymmetric normal distribution. A negative VaR ETL value indicates the potential average loss beyond normal that the investment portfolio may experience.

The Value at Risk (VaR) normal ETL for Franklin Shariah Technology Fund A (acc) SGD over the past year is -14.08%. This represents the estimated average loss beyond the VaR level.

  • Value at Risk Quantile Conclusion for Franklin ShariahTechnology Fund A (acc) SGD:

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. In this case, a VaR quantile of -10.30% suggests a certain confidence level (such as 95% or 99%) that the fund’s losses will not exceed 10.30% over one year. It is a measure used to assess the downside risk of an investment.

The effect of a negative VaR Quantile value implies the potential estimated maximum loss that the portfolio may experience at the specified confidence level based on historical return data.

  • Variance Conclusion Franklin Shariah Technology Fund A (acc) SGD: 

Variance is a statistical measure that quantifies the dispersion or volatility of a dataset. In the context of investment performance, higher variance indicates greater unpredictability or fluctuation in returns.

The variance of Franklin Shariah Technology Fund A (acc) SGD over the past year is 59.24%. This indicates a relatively high level of volatility in the fund’s returns..

A lower variance may indicate a more stable or predictable performance pattern for the fund over the respective periods.

Conclusion

Investing in the Franklin Shariah Technology Fund A (acc) SGD requires a thorough understanding of its risk and reward metrics. Unfortunately, specific metrics such as Alpha, Beta, Correlation, and Sharpe Ratio were not provided, making it challenging to assess the fund’s performance and risk profile.

However, based on the fund’s objective of investing in technology securities while adhering to Shariah principles, it may be suitable for investors seeking exposure to the technology sector with a focus on ethical investing. The fund’s alignment with Shariah principles may appeal to individuals who prioritize investing in accordance with Islamic values.

To make a more informed decision about investing in Franklin Shariah Technology Fund A (acc) SGD, it is recommended to obtain specific performance metrics, risk measures, and ESG scores. Additionally, consulting with a financial advisor who specializes in Shariah-compliant investments can provide further guidance tailored to individual investment goals and preferences.

Remember that past performance does not guarantee future results, and it is important to consider your own financial circumstances, risk tolerance, and investment objectives before making any investment decisions.

Happy Investing!

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