Brunei’s Shariah-compliant securities company BIBD Securities (BIBDS) and Lion Global Investors (LGI), the largest Singapore fund house, have unveiled the Lion-BIBDS Islamic Enhanced Liquidity Fund, making it the city-state’s first Shariah-compliant enhanced liquidity mutual fund and the first to be managed within Brunei.

The fund will target capital preservation and income enhancement while maintaining low portfolio risk and high liquidity. It will invest in a diversified portfolio of global Shariah-compliant short-term fixed-income instruments, including sukuk, money market instruments and Islamic deposits approved by BIBDS’ Shariah advisory body.

Launched initially in March 2024 with a US dollar share class for accredited investors, the fund has accumulated S$63.3 million (US$46.8 million) in assets under management as of June 30. The US dollar share class is now open to all investors, and a Singapore dollar-hedged class will be available from August 1.

The fund aims to address liquidity management challenges that were highlighted by the 2023 Islamic Financial Services Industry Stability Report, which valued the global Islamic financial services (IFS) industry at US$3.25 trillion in 2022. 

Southeast Asia, which holds the second-largest share of the IFS industry at 23.3%, dominates sukuk issuances with 49.6% of the total volume, valued at US$829.7 billion.

“We anticipate strong reception for this fund due to its value proposition,” says Kwok Keng Han, LGI’s chief marketing officer. “Combining sukuk with Islamic deposits and money market instruments offers investors stable returns in a Shariah-compliant portfolio. We foresee good demand from the lack of Shariah-compliant liquidity solutions in Southeast Asia.”

Jason Wong, BIBDS’ managing director, adds: “Our goal is to expand our product range and bridge regional investors with Shariah-compliant opportunities.”