Asia’s First Shariah Compliant Robo will go live in Malaysia early next month. How does it work?
Kuala Lumpur headquartered Farringdon Group (Farringdon) is about to launch its new Robo-adviser service which follows Shariah investment guidelines.
Their new system branded as «Algebra» is aimed at revolutionising the way prospective clients receive advice.
Algebra relies on smart beta trading algorithms to derive its active equity portfolio, it then blends this with fixed interest Exchange Traded Funds, (ETF’s) or Sukuk bond funds, to derive a risk weighted portfolio suitable for an investors risk appetite.
The financial adviser claims one of the key advantages of the new tool is clients knowing they do not need to cover high salaries, with sales commission and are passing 100 percent of those savings back to clients.
Its shariah investment strategy is approved by Shariah Scholar Datuk Dr Daud Bakar of Amanie Advisors, the official launch date is set for July 10th 2017.
Algebra can complete a fact find and calculate its clients risk attitude, from asking questions online and this cuts out the need for expensive consultants that ask similar questions face to face.
Together with constructing the Shariah version of this platform Farrington have also built and incorporated a Non-Shariah option.
Local Banks to Take it
The company is also in discussion with some of Malaysia’s banks and investment institutions, for a local RM product that they can operate under their license and will welcome more companies that wish to utilise the new system.
«Our smart beta strategy is one of the few Islamic investments in the world which outperforms the sharia S&P 500 index and does so with a lower level of volatility,» said Martin Young Farringdon Asset Management’s CEO in Singapore.