Shariah-Compliant World Fund Launched In Guernsey

by Amanda Banks, Tax-News.com, London

19 August 2010

Investment manager Argyll Investment Services Limited has launched ‘the World Shariah Funds PCC Limited’, a Guernsey-based suite of Islamic-compliant investments which is to be listed on the Channel Islands Stock Exchange (CISX) and distributed globally.

The World Shariah Funds have brought together three major Islamic investment teams within a single fund structure: From Malaysia, Reliance Asset Management (Malaysia) with USD4.3bn assets under management; the south-east Asian CIMB Principal Asset Management Berhad with USD6.85bn assets under management; and Markaz of Kuwait with USD2.2bn assets under management.

This is the first time they have come together in a single offering and strict criteria have been applied to the selection of the companies whose shares are held within the funds. These specifically exclude, amongst others, companies dealing in alcohol, pornography, tobacco or those with highly leveraged balance sheets. From a ‘basket’ of Shariah-compliant companies, a selection is made of those whose earnings are most likely to exceed the market average and the result is an actively-managed portfolio intended 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 Administrator of the World Shariah Funds PCC Limited is Legis Fund Services Limited which has experience of administering Shariah compliant Guernsey open-ended funds. Managing Director Martin Tolcher said: “This fund adds to the Shariah compliant structures we already administer and the overall breadth of fund types under Legis’s administration. There continues to be increased demand for Shariah-compliant investment products, including offshore funds whose portfolios consist of Shariah-compliant securities.”

He added: “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 highly reputable jurisdiction are a winning combination.”

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