i-VCAP to launch more exchange-traded funds this year

KUALA LUMPUR: i-VCAP Management Sdn Bhd plans to introduce new exchange traded funds (ETFs) in 2017 in order to create greater depth and variety for investors while boosting the local ETF market, CEO Mahdzir Othman (pix) said.
Coupled with the four existing ETFs under its management, i-VCAP will continue driving and promoting ETFs domestically as well as Islamic ETFs globally, he said in a statement released yesterday.
i-VCAP , a licensed fund management company is a wholly owned subsidiary of ValueCAP Sdn Bhd, which is equally owned by Khazanah Nasional Bhd, Kumpulan Wang Persaraan (Diperbadankan) and Permodalan Nasional Bhd.
i-VCAP yesterday declared income distribution for its funds, namely the MyETF Dow Jones Islamic Market Malaysia Titans 25 (MyETF-DJIM25), MyETF MSCI-Malaysia Islamic Dividend (MyETF-MMID) and MyETF MSCI SEA Islamic Dividend (MyETF-MSEAD), for the financial year ended Dec 31, 2016.
A total of RM8.25 million is allocated for the income distribution of MyETF series. For the local underlying ETFs, i.e. MyETF-DJIM25 and MyETF-MMID, the unitholders will receive 2.23 sen and 1.52 sen per unit respectively. Meanwhile, MyETD-MSEAD which provides exposure to the regional equity market, will distribute 2.34 sen per unit to its unitholders.
The entitlement date for the income distribution is on March 3 while payment is set for March 30.
Apart from providing exposure for investors into the different underlying securities and market, MyETFs have also consistently provided income distributions to its unitholders each year. The income distributions are largely contributed from the dividend income that each funds received from its equity holdings.
Whilst the local underlying ETFs were in line with the weak sentiment for Malaysian market last year, the regional ETF had performed relatively better due to the strong performance by selective regional stocks in MyETF-MSEAD. Nonetheless, the MyETF series continue to meet its objective of tracking their respective benchmark index during the year.

Mahdzir said the MyETF Series provide good investment option to investors due to the diversification and convenience of trading in the ETFs at relatively low transaction cost with no sales charge. Investors can therefore maximise their net investment returns with ETF, as compared to other type of funds with similar underlying securities or assets.
On the global front, total ETF assets continue to grow year-on-year, having increased by 18% to US$3.50 trillion in 2016 from US$2.96 trillion in 2015.
For the local ETF market, total assets for ETFs listed on Bursa Malaysia Securities have grown from RM1.72 billion in 2015 to RM1.88 billion in 2016. The increase in size was largely driven by institutional investors who are familiar with the use of ETFs in their investment portfolio and traded through the primary market (creation and redemption activities).
Meanwhile, retail investors’ participation which can be reflected from the trading in the secondary market, i.e. through Bursa Malaysia Securities, has seen continued interest albeit at a low traction rate.
“Investors’ awareness and understanding of ETFs as an attractive investment option have grown over the years. There is therefore room to grow in terms of leveraging this awareness and translate to actual investing in the secondary market. We will continue our investors’ educational activities and brand awareness initiatives, particularly among retail investors, and remain optimistic that investors will increasingly embrace and use ETFs in their investment portfolio,” Mahdzir said.
i-VCAP also manages wholesale and private mandate funds. As of Jan 31, 2016, i-VCAP’s total assets under management stood at RM1.31 billion.