RETAIL FUNDS | Cesar Tordesillas, Malaysia

CIMB launches Restricted Mudharabah-patterned product


CIMB Islamic launched a 10-year investment product structured based on the Shariah concept of Restricted Mudharabah.

Flexi Select NID-i was designed by combining innovative investment features with the added flexibility for investors to switch their investment strategies.

“This is a first-of-its-kind investment that offers investors the choice to manage their own portfolios without getting trapped in the same investment view, which clearly differentiates this product from regular structured investments. The Flexi Select NID-i allows investors to review their outlook every two years and make their decision in-line with their investment views. Furthermore, the principal will be protected by the bank if held to maturity,” said Head of Retail Banking, CIMB Bank, Peter England.

The product’s variable payout will be subject to the best performer among China, U.S. and Europe reference equity indices. In order for the variable profit to be paid out, only one among the three indices has to close at or above its initial level on the observation dates for that relevant period. The variable payout has an average profit rate of 5.85 percent per annum subject to the performance of these indices and furthermore initial levels are reset on every new profit period to protect investors from sharp declines in those equity markets. Alternatively, investors can also switch to the Indicative Protected Profit Payout Option of 3.5% per annum. Each profit period is for a duration of two years.

“We are very optimistic on the performance of this product as we expect potential economic growth in these three major markets that will be mainly driven by private sector demand, especially in China. The best performer and resettable feature combined makes this a very powerful investment strategy. Furthermore, if investors view that
markets will underperform, they have the choice to switch from the variable to the protected profit,” added England at the launch.

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