KUALA LUMPUR: Standard Chartered group is confident its latest Islamic investment product TRAIn-i (Total Return Alternative Investments) will help grow its alternative investments portfolio to US$1bil by next year.
Standard Chartered Bank Malaysia Bhd country head of global markets Sandeep Bahl said he was bullish on the product because it was the first structured investment product that offered investors superior returns at a very attractive risk/reward ratio compared with traditional investments like stock and bonds.
“Increasing demand from customers has encouraged the bank to introduce the syariah-compliant product to enable more investors to invest in alternative assets,” he said at the launch of TRAIn-i yesterday.
TRAIn-i is the Islamic version of the conventional alternative investment product TRAIn, which captures yield spreads across a basket of global currencies to provide diversification benefits to investors.
Currently, the bank has some US$600mil of assets managed under TRAIn.
From left: Standard Chartered Bank Malaysia Bhd head of corporate sales Ina Ibrahim, Sandeep Bahl, Azrulnizam Abd Aziz and head of investor sales, capital markets (Malaysia and global markets) Bernard Tsai at the launch of TRAIn-i
Investors in TRAIn-i can choose between Yield Differential Accrual, which invests in G10 currencies as the underlying asset, and Global Yield Model, which invests in G10 and emerging market currencies.
Bahl said TRAIn-i was a unique product because the investment strategy would utilise the bank's proprietary trading technology to capture yield differentials across a basket of highly liquid and transparent currencies.
“In periods of heightened financial market tension, a particular currency may be dropped from the traded basket and would be reinstated when domestic conditions improve,” he said, adding that the trading strategies employed would be non-discretionary with systematic, rule based models removing the “human element” of trading.
Meanwhile, head of Islamic Banking Azrulnizam Abdul Aziz said: “TRAIn-i solution is based on syariah principles of murabaha (cost plus) and wa'ad (promise) and is developed in partnership between Standard Chartered Bank's alternative asset and Islamic banking groups.”
“In addition to the US, Hong Kong and Singapore dollar deposit or note, Standard Chartered Bank can now offer ringgit version to meet our customers' investment requirements,” he added.