Three Islamic investment teams from Malaysia, south-east Asia and Kuwait have been brought under a single fund structure and their offering is now available through a Guernsey-based, protected cell company called the World Shariah Funds, launched by Argyll Investment Services.
The World Shariah Funds PCC brought together Reliance Asset Management from Malaysia with US$4.3bn (€3.3bn) assets under management (AuM), the south-east Asian CIMB Principal Asset Management Berhad with US$6.85bn AuM and Markaz of Kuwait with US$2.2bn in AuM.
The products will be listed on the Channel Islands Stock Exchange and distributed globally.
This is the first time these three teams have come together in a single offering and strict criteria were applied to the selection of the companies whose shares are held within the funds. As with most Shariah-compliant products, they specifically exclude, among others, companies dealing in alcohol, pornography, tobacco or those with highly leveraged balance sheets. A selection is then made from the resulting basket of Shariah-compliant companies, to create an actively-managed portfolio aiming to outperform an Islamic equity index.
Stuart Place, marketing director at Argyll, said: “Following the first phase of the world credit crisis investors are more wary of holding heavily indebted companies in their portfolios. The filter process for the World Shariah funds eliminates such businesses as non-compliant under Shariah principles.
As the next phase pans out, less leveraged companies will be less dependent on bank finance and should have more robust balance sheets; an attractive proposition in the search for value.”
The World Shariah Funds PCC is administered by Legis Fund. Managing director Martin Tolcher said: “There continues to be increased demand for Shariah-compliant investment products, including offshore funds whose portfolios consist of Shariah-compliant securities.
“This specialist area of fund administration is a growth area for Guernsey. The increased awareness of and desire for these products globally, the presence of the Channel Islands Stock Exchange and Guernsey’s position as a reputable jurisdiction are a winning combination.”
Peter Niven, chief executive of Guernsey Finance, the island’s promotions agency, said: “Shariah compliant products are extremely popular at the moment, not least of course to reach out to Islamic investors and this launch from a new fund promoter to the island will particularly enhance the knowledge and reputation of Guernsey in the Middle East.”©2010 funds europe