hsbc saudi offers shariah compliant fund

HSBC Saudi Arabia has launched its first sukuk fund, a Shariah-compliant fixed-income product, for the countrys retail market.

hsbc saudi offers shariah compliant fund

Described as having a “medium to high” risk profile, the HSBC Amanah Sukuk Fund, which launched last month, is the first open-ended sukuk fund to be offered by HSBC Group.

Managed by the asset management division of HSBC Saudi Arabia, the fund will invest in a concentrated portfolio of between 15 to 20 sukuks primarily issued from within Gulf Cooperation Council countries, although there are no geographical constraints.

HSBC said the fund would aim to have an average duration of five years or less, with an average risk rating of A-.

The portfolio will be drawn from an investment universe of sukuks approved by the Shariah Supervisory Committee of HSBC Saudi Arabia, money market funds approved by Saudi Arabia’s Capital Markets Authority and Islamic Certificates approved by the Shariah Supervisory Committee.

HSBC said a sukuk “can be classified as the Shariah-compliant equivalent of bonds” and “represent the credit obligation of the underlying issuer”.

The Shariah nature of the product places certain limitations on the fund manager. These restrictions include bans on “conventional” leveraging or hedging, short-selling, securities lending and the use of investment derivatives such as CDS.

The fund has a minimum initial investment of $25,000 (£15,000, aed92,000) and charges an annual management fee of 0.75%, which is reinvested into the fund.

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

International Adviser is aimed at global intermediaries who advise their HNW clients on International fund, life and banking products and tax efficient solutions to their cross-border needs

To subscribe to International Adviser's news bulletins and apply for a magazine subscription click below

Editor's Pick

PraxisIFM makes third acquisition in two months
PraxisIFM makes third...

Guernsey-based independent financial services group...

Defensive assets continue to find favour
Defensive assets continue...

Defensive assets continued to lead in October, according...

UK tax evaders given one last chance to come clean
UK tax evaders given...

The financial secretary to the Treasury, David Gauke,...

Sponsored Content


Other Stories From