Investing in Raiz Portfolio – Is it Shariah-compliant?

Klik sini untuk Bahasa Melayu

31 May 2020 (UPDATED 09 Mar 2022)

by Aidi Izham, CFP®, MIFP


All Raiz investment portfolios are investing in unit trust funds.

For Custom Portfolio, the funds are;

  1. Aberdeen Standard Islamic World Equity Fund
  2. UOB United-i Global Balanced Fund
  3. UOB United-i ESG Series – High Quality Sukuk
  4. Affin Hwang Shariah Gold Tracker Fund
  5. Affin Hwang Aiiman Money Market Fund

And they are all Shariah-compliant funds.


For Aggressive, Moderate and Conservative portfolios, the funds are;

  1. ASN Equity 3 Fund
  2. ASN Imbang 2 Fund
  3. ASN Sara 1 Fund

They are managed by Amanah Saham Nasional Berhad (ASNB), a wholly-owned subsidiary company of Permodalan Nasional Berhad (PNB).

The ASNB funds above have invited two views; FIRST, from the Securities Commission Malaysia (SC), the statutory body that is responsible to regulate and develop the Malaysian capital market — the funds are NOT considered compliant.


Mainly because PNB’s strategic investment in banking stocks, considered a Shariah non-compliant financial services stock. For SC to say a fund is compliant, they look at the business activity benchmarks and financial ratio benchmarks, while at the same time account for qualitative aspect which involves public perception or image of the company’s activities.

However, the SECOND view coming from the Islamic local councils in Malaysia, both at state (Jawatankuasa Fatwa Negeri) and federal level (Jawatankuasa Fatwa Majlis Kebangsaan) — the funds are “harus, for these obvious reasons;

  • PNB’s mandate is to enrich the lives of the Bumiputeras, which majority are Muslims. PNB has some 14 million unitholders, of which about 80% are Bumi.
  • PNB does not invest in “haram” shares” such as alcohol, gambling or tobacco stocks.
  • There are limited number of Shariah-compliant equity instruments on Bursa Malaysia considering how much money PNB has to invest — PNB has RM312 billion to invest, but Shariah-compliant securities on Bursa Malaysia is only RM1.1 trillion (as at 31 Dec 2019).
  • If PNB pulls out its share from the banking stocks – especially Maybank (KLSE: Maybank) where it owns majority of the shares – that would have a major negative economic impact on Bumi Muslims.
  • If PNB did not have majority shares in Maybank, for instance, it will lessen the acceleration of Islamic finance in the country. Maybank Islamic is the largest Islamic banking group in Malaysia and ASEAN by assets.

Therefore, for the above obvious reasons, after considering and prioritising wider public interest (maslahah), keeping the investment in Maybank is regarded as an essential (dharuriyyah) – hence the ruling “harus”.


In conclusion;

  1. From the SC – the funds are not Shariah-compliant.
  2. From the Jawatankuasa Fatwa – the funds are “harus”.
  3. There is no force if one wishes to invest or, indeed, to not invest at all. That’s why the principles of needs (hajiyyah) provide a certain flexibility and freedom (although not absolute) for the individual to choose.





Bursa Malaysia, FAST BNM

PNB Annual Report 2019 


Don’t have the Raiz App? 

Download it for free in the App store: 




Important Information 

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. 

The information on this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. 

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz. 

The past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

The advertisement has not been reviewed by the SC.