A Swiss and a Saudi Arabian wealth manager have jointly launched an Islamic investment brand, Safa Investment Services.
It aims to deliver global growth while investing solely in assets that are compliant with Muslim religious law, the sharia.
Customers in Saudi Arabia can access the service through the Saudi partner, The Investor for Securities, a Riyadh-based company with some $1 billion (€770 million) under management, while Swiss partner, Islamic Wealth & Asset Management, will offer the same services from Geneva.
“Professionally managed assets worldwide are now around $80 trillion, of which Muslims own at least $3 trillion,” said John A Sandwick, manager of Safa Investment Services. “What is striking is that almost none of that is invested with any respect for sharia.”
Saudi Arabia is likely to be fertile ground for sharia-compliant products as it is the homeland of the Muslim religion, where Islam plays a dominant role in the law and culture. It is also the largest nation in the Arabian peninsula and has considerable wealth due to oil exports.
Sharia-compliant investing shuns assets that are forbidden in Islam, such as alcohol or pork, as well as financial structures that are proscribed, such as interest-bearing securities. Islamic institutions use alternative structures such as Islamic bonds, or sukuk, which generate a return for investors without violating the code of the sharia.
©2012 funds europe