Islamic SILX is a Shariah-compliant and principal-protected structured investment product primarily based on the Islamic concepts of Musawamah, Wa’d, Commodity Murabahah, Ibra’, and Wakalah that delivers principal protection and returns.

Key Features

This structured product to be offered to Retail and Wholesale Investors with the following features:

  • Its investment principal is 100% capital protection if held until maturity (up to 10 years);
  • Its returns (known as coupon/profit) is based on Undertaking to enter into Commodity Murabahah (CM) Options payoff which benchmark against a Reference Index level, without any actual buy and sell of index’s units or shares;
  • Upon exercise of the Undertaking to enter into CM (option), the profit / coupon received by investor is not fixed and will be based on reference index movement above the strike point. If the Undertaking to enter into CM (option) is not exercised, investor will receive either zero profit or Minimum profit subjected terms and conditions agreed upfront;
  • The Reference Index will be based on list of reference indices approved by the Shariah Committee RHB Islamic Bank Berhad.

This product will provide investors access to global multi-asset classes and investment strategies tied to the underlying performance of a reference index, with a maturity of between three to ten years.

Through the product, institutional investors can benefit from portfolio diversification which includes proprietary multi-asset indices with Environmental, Social, and Governance considerations, foreign exchange, commodities, and other global indices, in addition to traditional cash assets such as equities and fixed income.

Single or series of Undertaking to enter into CM (Options) benchmark against reference index level. The Islamic SILX returns are derived from amount received from Undertaking to enter into CM (options). The Undertaking to enter into CM (options) will provide returns via referencing the index’s level on expiry date of the Undertaking to enter into CM (options) based on the following payoff conditions:

  • If index’s level is above the Strike Point (determined upfront), the Undertaking to enter into CM (option) will be exercised and profit will be paid by RHB Islamic Bank (RHBIB) to investor as a profit. The profit amount received by investor will be based on formula agreed upfront.
  • If index’s level is below the Strike Point, the Undertaking to enter into CM (option) will not be exercised and no settlement between RHBIB and investor. The investor will either receive Minimum Profit payment or zero profit depending on terms and conditions agreed upfront.

Product Suitability

This product may be suitable for clients who:

  • are looking to gain profit against reference index,
  • understand the risks associated with this product and are comfortable to bear the risks;
  • have a view on the movements of reference index;
  • are able to hold the contract to maturity.

Product Structure

Product Structure

Product Documentations

Product Documentations

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