Standard Life has launched a fully Sharia-compliant lifestyle strategy, further extending its range of responsible investment options for members of its workplace pension schemes.
The provider said it had partnered with HSBC Asset Management and Franklin Templeton to launch the Standard Life Sharia Universal Strategic Lifestyle Profile and create a strategic lifestyle profile comprising two investment funds to reflect distinct phases of the savings journey.
The Standard Life Sharia Growth Pension Fund will aim to increase the value of the pension on a Sharia-compliant basis when the saver is more than 15 years from retirement before switching over time to the Standard Life Sharia at Retirement Pension Fund, which introduces a sukuk fund in the run-up to retirement.
Standard Life interim managing director of workplace and retail intermediated Emma Furlonger said: "This is a significant milestone in our ongoing development of our lifestyle solutions that meet specific requirements of members.
"Our Sharia-based solution caters to those who want to invest in line with their values and beliefs, without compromising on the prospect of long-term growth. In adhering to Sharia Law, we have sought to strike a balance between appropriate investment risk and good outcomes to help savers secure their income in retirement."
To support its approach, Standard Life has appointed an external Sharia adviser – iConsult Africa, to oversee the development of its Sharia proposition and to consult on the ongoing Sharia-compliance of the lifestyle profile being offered to savers.
Standard Life said a Sharia supervisory group has been specifically established to oversee sharia compliance elements of internal investments processes – adding that Ziyaad Mahomed, an associate professor of Islamic finance and chair of iConsult Africa, has been appointed to chair this group.
The supervisory group will complement the committees of the external fund managers to support end-to-end Sharia compliance of the solution.
Mahomed said: "Offering a Sharia-compliant pension investment option is an important statement of inclusion. The Sharia principles of fairness and transparency are finding powerful resonance with demand for Islamic finance options growing in the UK. The increasing provision of Sharia-compliant options across the pension sector is to be welcomed as it provides the opportunity for Muslims to invest for retirement without having to compromise on beliefs, while also finding wider appeal among other investors too."
The Standard Life Sharia Growth Pension Fund invests in the SL HSBC Islamic Global Equity Index Pension Fund – a global equity fund that invests in companies that meet Sharia principles.
The SL Franklin Global Sukuk Pension Fund underpins the Standard Life Sharia at Retirement Pension Fund, with investment in Sharia-compliant sukuk certificates structured to eliminate payment of interest and eliminate ownership on behalf of the investor. It invests across the Middle East, North Africa and South Asia, both in company and government supported sukuk.
Both underlying investments are informed by AAOIFI standards, and the Sharia supervisory mechanism of the individual investment manager.
In addition to the Sharia Universal SLP, Standard Life provides additional Sharia-compliant options for customers to self-select with a range of funds – SL Franklin Global Sukuk Pension Fund; SL HSBC Shariah Multi Asset Pension Fund; and SL HSBC Islamic Global Equity Index Pension Fund.
The announcement comes after Franklin Templeton launched two additional funds in its Shariah range in response to rising demand from European investors for Shariah-compliant investment solutions.
It also follows the move by Verity Trustees, the corporate trustee of The Pensions Trust, to add a Sharia-compliant fixed income fund to its defined contribution (DC) range. The trustee said it had added the HSBC Global Sukuk UCITS ETF to its members' existing DC self-select fund options.
