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Wed, 10 Feb 2010 | 12:41 GMT
Wed, Feb 10, 2010, 12:41 GMT
 

Shariah Capital to launch Islamic ETF

Emirates Business 24/7
 
 
Emirates Business 24-7, 15 October 2009

Shariah Capital plans to launch a Shariah-compliant exchange traded fund (ETF) soon, CEO Eric Meyer told Emirates Business. The ETF will be simultaneously launched in London and New York, he added.

"Based on the success of our DSAM Funds Shariah Capital has now made the strategic decision to expand into ETFs," Meyer said.

"With 1.5 billion Muslims and estimates of $2.7 trillion (Dh9.91trn) invested into Shariah-compliant investments globally, the need for Islamic ETFs is evident.

Market studies indicate a shortage of Shariah-compliant investment instruments to meet the rising global demand," Meyer added.

Shariah Capital, a US-based company, manages five commodity funds in Dubai and was established in conjunction with the DMCCA in Dubai. This includes the DSAM Kauthar Gold Fund, the DSAM Kauthar Enery Fund and the DSAM Kauthar Natural Resources Fund, the DSAM Kauthar Global Resources and Mining Fund and the DSAM Kauthar Commodity Fund. These funds had outperformed a number of international benchmarks when their performance was last reported in July this year.

There are 383 Shariah-compliant funds with more than $25 million of assets in the world today and not all of them have performed well. Meyer said that the potential challenges in front of the ETF have been elaborately discussed. "Shariah Capital has carefully examined the existing Shariah-compliant ETF offerings. We have concluded that the mixed results obtained by earlier offerings could be overcome through a focused marketing and distribution. As a firm interested in developing Islamic products, we believe that we can meet these challenges," Meyer said.

The firm is also looking for partners in the region to launch the ETF.

Shaykh Yusuf Talal DeLorenzo, Chief Shariah Officer at Shariah Capital, said: "We offer our partner the opportunity to fully capitalise our relationship with the GCC institutional investors, distribution platforms and government leaders to leverage our established Shariah brand."

Shariah Capital Managing Director Joseph Gau said: "We will consider both co-development and shared equity strategic ETF alliances with worldwide leaders in the investment and asset management business."

By Shashank Shekhar

© Emirates Business 24/7 2009

 
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