Apr 17 2011 |
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HSBC awarded UK Shari'ah mandate
By John Foster The UK's National Employment Savings Trust - the government-backed national pension scheme for workers that aren't covered by a company pension - has awarded HS BC Global Asset Management the mandate to run its Shari'ah fund option. NEST's head of investment policy, Paul Todd told The Islamic Globe: "NEST ran a competitive tender process to procure a Shari'ah compliant global equity fund. There was a great deal of interest in this mandate, and we evaluated bids from a range of providers offering both actively and passively managed products. We chose the HSBC fund as it offered the best combination of strict Shari'ah compliance, value for money and robust risk management and investment processes."The $39.8m HSBC Life Amanah Pension fund passively tracks the Dow Jones Islamic Titans 100 index, a Shari'ah screened global equity index. Christopher Gower, head of European consultant relations for HSBC Global Asset Management told The Islamic Globe: "This is a specialist mandate in a developing market place. In addition to the ability to manage the fund, I also think NEST awarded us the mandate was for what we could bring in addition to just the fund management. HSBC Amanah has been one of the leaders in global Islamic finance for two decades, and we think we can help NEST with the whole education and communication strategy necessary in this sector."
The DJ Islamic Titans 100 Index has had an average annualized return of 6.5% per annum over five years to the end of February 2011, in comparison to an annualized average 8.4% return over three years, a 20.6% over two years and 9.2% over 12 months, according to HSBC 's internal data. The fund closely tracked the index's performance, offering a 6.3% annualized average per annum return ex-fees over five years.
Todd added: "Initially the NEST Shari'ah option will be a pure equity fund investing solely in the HSBC Life Amanah Pension fund. But we will continue to explore other Shari'ah compliant asset classes with a view to expanding and diversifying the range of building blocks underlying the NEST Shari'ah fund in the longer term. For example, we are talking to providers and stakeholders about the possible enlargement of the range to include lower risk Islamic asset classes such as Sukuk."
© The Islamic Globe 2011
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