- 5 months ago
In this exclusive interview, Wai Ken Wong, Country Manager of StashAway Malaysia, discusses the launch of Shariah Global Portfolios — a groundbreaking move in Islamic digital wealth management that offers Malaysians globally diversified, Shariah-compliant investments across equities, sukuk, gold, and digital assets, backed by Masryef Advisory and designed to meet ethical investing needs with competitive returns and inclusive access.
Category
🗞
NewsTranscript
00:00All right, Malaysia's Islamic fund management industry is thriving with assets under management AUM reaching RM263 billion as of mid-2025.
00:11Yet despite this growth, most short-term investments remain heavily concentrated in domestic markets or single asset funds, limiting diversification and also global exposure.
00:22And Stashway aims to change that. Joining us on set is Waiken Wong, Country Manager of Stashway Malaysia and also Karin Anwar Mohamed Noor, Principal Mashrif Advisory to unpack the strategy and the Shari'ah screening process and also what this means for the future of Islamic digital wealth management in Malaysia and beyond.
00:41Gentlemen, thank you so much for joining me this morning. Let's start with the Stashway first, Waiken.
00:48Wahid, Stashway basically decided to launch, you know, Shari'ah Global portfolios now and how does this fit into your overall strategy, especially in Malaysia?
00:57Yeah, morning Najib and morning to the audience as well.
01:01This is something that Stashway has always wanted to do, you know, because we launched in Malaysia in 2018 and then being Malaysian, we just know how big the Shari'ah market is.
01:10Malaysia is a world leader in Islamic finance and I think that the market segment is big enough.
01:16I think for us to do it now, it's really about, it's a reflection of how global of a portfolio or how global of an offering we can give to clients.
01:26It took some time for the world to come up with ETFs that was truly global, for example, Soko and certain equities for us to really put together a global portfolio.
01:36Because we think that more Malaysians and including Malaybu Mumputra investors do need to invest abroad.
01:42So we had to wait for the global industry to catch up with Malaysia's progress.
01:47So ultimately, we're really proud to bring it to Malaysia and in a way complete our product suite.
01:53And also for Kairil, from Shari'ah Advisory side, you know, what is, why is there, you know, such a strong demand now for global Shari'ah Compliance solutions?
02:03Thank you, Najib. I think to begin with, the demand for global Shari'ah Compliance solution is not new.
02:14The demand has always been there.
02:17The Islamic investors particularly, very much, it's very much important for them to be able to invest in instruments which are Shari'ah Compliance.
02:29What is more important now is that the availability of the instrument, the availability of the instrument which are Shari'ah Compliance, like the ETF.
02:42Only recently that we can see that there are Shari'ah Compliance ETFs which is being offered in the market.
02:49So demand has always been there.
02:53Market wants Islamic Shari'ah Compliance products, particularly for the Muslim.
02:57And I have to say, this is not only in Malaysia, but also globally.
03:01There's always demand for Shari'ah Compliance products.
03:05And market, even in the Western, non-traditional Islamic market, like the Western market, the UK, the US, Australia, for example,
03:16the demand for Shari'ah Compliance products is always there.
03:19Very interesting.
03:21Of course, when we talk about investments in Malaysia, people would like to go to the safest place, what I would say.
03:28So many Malaysians, of course, already invest heavily through, it's either EPF for retirement or ASP in that sense,
03:36which are largely domestic-focused.
03:39So how do your global Shari'ah Compliance portfolio specifically complement these investments that they already have?
03:44That's a good question.
03:45And I think something like EPF and ASP, they are cornerstones of all our investment portfolios and should remain that way.
03:53I think how we can help Malaysians is to diversify and globalize their investment portfolio.
04:00The truth is that Malaysia, while we are all very proud of the progress we have made, this is bulan merdeka after all, right?
04:08We have come a long way.
04:09We are still a small part of the global equity markets.
04:12So we are only around 0.2% of global equity markets.
04:16And I think as Malaysians, we travel overseas, we buy overseas products, some of us study overseas, we consume media that is from overseas.
04:26We are well-traveled people.
04:28So it's also fair that you invest overseas as well.
04:31And overseas provides good risk return.
04:34I think it's good to diversify your holdings.
04:36For example, the S&P 500 has returned 12% per annum on average.
04:43It is more volatile.
04:44But I think that 12% is a much higher return than a lot of people can get in the local market.
04:51So I think that people owe themselves the ability to invest overseas.
04:56And now with these Sharia Global Portfolios, we can do so in a safer way.
05:00We have put together many different asset classes, not just Sukkot, but also equities from different regions around the world.
05:07Also Gold, which has been doing quite well.
05:10I think in this safe, diversified manner, we can help people invest overseas and not have to worry about stockpick or to worry about exposure to a very risky sector.
05:20So I think we do it very easy way to complement ASB and your EPF.
05:24But do you see that Malaysian investors becoming more open to global diversification in that sense?
05:30Or what does this mean from the Sharia perspective as well?
05:34I think, yeah, Malaysian very much open to invest not only Malaysia but also outside.
05:42I think the availability of Sharia compliance investment instruments enable Malaysians to diversify their risk.
05:51Not only to diversify but to also look at opportunities for investment outside Malaysia and also to be able to accrue probably better returns.
06:03But in any event, when it comes to investment, diversification is very important.
06:07And I think the demand certainly is there to help the Malaysian investors, to help the Sharia compliance investors to not only continue to align their investment with their belief but also to diversify their investment instruments.
06:26And the good thing is, at the current rate, it's not just about diversification, it's about being able to afford it because of the smaller ticket size and lower cost in investing in global portfolio.
06:42So this is the best option for passive investors, in a sense?
06:45Yeah.
06:46It's a very good option, I would say, to the passive investors.
06:49I want to talk about, because you mentioned about the return just now, 12% to 14% or that kind of numbers.
06:57Of course, higher returns also comes with higher risk and all that.
07:00That's what these people and investors would see, right?
07:03So how do you balance the competitive returns and at the same time, you know, managing the risk itself?
07:10Yeah.
07:11Risk in and of itself is not a bad thing if the returns are there to compensate for the risk that you take.
07:18I think, for example, if we look at, let's say, FD in Malaysia, you're looking around 3%, not much risk there.
07:24ASP, around 5% to 6%, also not much risk, very secure.
07:29Where you want to reach for higher returns, you need to be able to accept that risk.
07:34So first, that comes with knowing your own situation.
07:36Can you handle that volatility or not?
07:38And if you go into, let's say, a single stock, very, very volatile.
07:42If you go into just cryptocurrency, very volatile.
07:45That's why a portfolio really helps you navigate this volatility.
07:50You have assets like gold, sukuk, different types of equities to smoothen out the process.
07:57And we have found that our portfolios historically, in terms of back-tested returns,
08:02have delivered between 8% to 14% per annum over the last three years.
08:07So I think those returns speak for itself in the sense that, yes, you take higher risk.
08:12You are investing globally.
08:14But at the same time, the returns are there to compensate.
08:17Interesting fact as well.
08:18We found that, you know, I mentioned S&P 500 earlier.
08:22We have identified the Sharia version of that S&P 500.
08:27And if you compare that Sharia index to the conventional S&P, the Sharia index outperformed.
08:35It outperformed by 48% over 10 years.
08:38So it shows that even, you know, as a Malay Bumi Putra investor,
08:43if you're investing according to your faith and your principles,
08:47you should not look at accepting lower returns.
08:50Sharia investments are on par, if not in some cases, like I just mentioned,
08:55better than the conventional ones as well.
08:58Yeah.
08:59I remember when, you know, EPF introduced the Sharia saving.
09:04A lot of people, you know, jumped into that.
09:06And then, of course, the first year, the second year,
09:09the return was a bit lower than the conventional one.
09:11But now it has a competitive age in terms of that because it has its own AUM.
09:16But how do you see the concern that the Sharia, you know,
09:22compliance investment and all that would give lower returns?
09:26How do you answer that to investors?
09:28Yeah.
09:28I think if you think about asset selection,
09:33and then if you put a Sharia view on things, a parameter on things,
09:38there are certain sectors that you cannot invest in.
09:40And obviously, we all know the main ones.
09:43But one big one here is you cannot select banks.
09:46And banks are, you know, financial institutions are a really big part of any institutional investors' portfolios, right,
09:52because of the dividends that banks could give.
09:55So if you exclude that, you have to look at returns elsewhere.
09:58But because of excluding all these other things,
10:02somehow you still get returns that are on par or better.
10:06So I mentioned S&P 500 Sharia index earlier.
10:10It does give you better returns if you compare it to the conventional S&P 500.
10:15But also when we look at global equities over the last three to five years,
10:20the returns is at 9%.
10:22So global equities, Sharia and conventional at around 9%.
10:25So there's no sacrifice in terms of returns.
10:28There's no lower returns when it comes to Sharia.
10:31So even as a parameter, a limitation to investing,
10:36you're not getting lower returns.
10:39To those investors who are really concerned about the halal level in that sense for this product,
10:47can you walk us through in terms of Sharia screening process for the ETF
10:51and how do you ensure that the ongoing compliance?
10:55Okay, sure.
10:56The Sharia screening process, first of all, we look at the sector.
11:02The business sector, for example, like what I can mention, banking,
11:07conventional banking particularly, which is based on interest or rebar,
11:11which is already excluded.
11:12Banking, alcohol, pop, or any other entertainment, for example,
11:20this will have to be set aside because these are non-compliant business sector.
11:29Then apart from that, we also look at the business activities also,
11:34looking at the income, the source of income of an entity.
11:40For example, if we were to apply, for us when we look at steps,
11:47we have two methodologies to do the screening.
11:51Number one, we use the ALC standard, which is a globally recognized standard.
11:57And we also adopt securities commission standard.
12:02So from income perspective, I was talking about income just now.
12:05The income based on non-compliant activities, for example,
12:09the interest income should not be more than 5%.
12:11So this will have to be excluded from the approved equities or approved investment instruments.
12:21And then we also look at the financial screening, the financial ratios,
12:26where debt, which is based on conventional debt, should not be more than 30%,
12:34as well as what we call cash holding, should not be more than 30% of the market capitalization of the entity.
12:46So it is actually a very comprehensive screening methodology.
12:51Having said that, for the purpose of a stash, because of the investment in ETF,
13:00the investment in ETF, one ETF may have multiple equities within the ETF itself.
13:06So the process is actually much more rigorous because we have to look at the individual entities.
13:13But the good thing is for stash away, stash away have already selected ETFs which are already compliant,
13:22which has already been approved by other sharing advisories.
13:27So it is a lot more easier that way.
13:30Otherwise, the process to screen the ETF will be, you know, a long process.
13:37It can be a costly process.
13:38What can you mention just now about the return from the S&P 500 is very interesting and a high number.
13:44But even the current uncertainties, I would say, we've seen a lot of market movement,
13:49especially when Donald Trump makes any announcement in all that sense.
13:52But with the global uncertainties and also market volatility,
13:56how will you ensure investors to stay confident in terms of having ETF compliant and committed to Sharia global portfolios?
14:05That's a really good point, right?
14:07Because if you venture abroad, it comes with more risk, geopolitical risk, economic risk, business risk,
14:14all of that wrapped into one.
14:16And we're at a point now where markets are volatile because we have a very volatile U.S. president.
14:21Just last week, because of Fed Chair Jerome Powell's dovish comments, markets did really well.
14:29And then when Donald Trump wanted to interfere in terms of the leadership, then markets took a hit.
14:35So I think expect more volatility going forward.
14:38I think this is something that is not new.
14:40You know, we had wars, you know, in the last few years as well, tariffs earlier in April.
14:45But still, markets are at all-time highs.
14:47And there are other asset classes that also shine in these volatile times.
14:52Gold, for example, has had two, almost three years now where it has more than 20% returns.
14:56So that's where diversification comes into play.
14:59That's where long-term investing comes into play.
15:02It's not something that you invest and hope that immediately you will become very rich.
15:08It's not a get-rich-quick scheme.
15:10It's something that you need to invest on a yearly basis, a longer term, to meet your financial goals.
15:17So if you're a little bit more patient, a little bit more long-term minded, I think you would be able to ride out the volatility.
15:25And financial news also can be distracting.
15:28I think there's sometimes too much financial news and certain things can be overblown.
15:32So people need to understand markets and understand what they are investing in, but not panic at the wrong time and sell, for example, at the wrong time.
15:41So it takes education, it takes exposure.
15:45But over time, I believe that Malaysian investors will get used to this kind of investing, as is the case with other investors who invest globally.
15:54And those who are patient and, shall I say, also a little bit more brave can enjoy those returns.
16:01Those 12% plus returns don't come without a cost.
16:04That's why I always mention risk-return, not just sekadar return only.
16:08All right.
16:10Waiken and also, Karir, thank you so much for joining us this time.
16:13That's all the time that we have.
16:14This is a very interesting topic.
16:15We need quite a lot of time to discuss about this.
Be the first to comment