UK - HSBC is set to launch an Islamic pension fund aimed at Britain's two million Muslims, becoming the first UK bank to offer such a pension fund.
The HSBC Life Amanah Pension Fund provides equity investment that complies with Shariah (Islamic law) and is designed so that it does not hold shares, for example, in companies primarily involved in alcohol production or distribution, gambling, pornography, pork products, tobacco and conventional financial services. The fund tracks an index that includes the top 100 companies that are engaged in Shariah-compliant activities.
Julian Lyne, head of institutional pooled funds at HSBC Asset Management in the UK, said: “With the recent anti-discrimination legislation, trustees need to consider whether they are giving Muslim employees and members access to a Shariah-compliant pension fund. We believe that HSBC’s new fund offers trustees and members an excellent opportunity to gain exposure to global equities yet still comply with Shariah.”
Some of the key features of the fund include daily dealing, a passive investment policy and global equity exposure. Any dividends that are generated by fund revenues from non-Shariah business are ‘purified’ (according to Shariah) by giving them to charity rather than distributing them to investors, through the HSBC Community Foundation.
Javed Ahmad, director of HSBC Amanah Finance added: “Investing in a pension is a vital part of sensible financial planning but the special needs of British Muslims have been largely overlooked, until now, by the UK financial services industry. Now the HSBC Life Amanah Pension Fund will allow Muslims to invest in a pension without compromising their deeply-held religious beliefs.”
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