Islamic Mutual Fund in Canada Celebrates Important Anniversary

By Jeffrey S. Graham

Posted: 9th December 2013 08:53

The universe of activities in Canada that involve Islamic finance continues to grow.  There are an increasing number of institutional initiatives that complement the long standing efforts of private entrepreneurs and investors in Canada who are committed to the ensuring that their commercial and financial activities are conducted in accordance with the principles of Islamic commercial law. 
 
The Global Iman Fund is a very successful Islamic mutual fund in Canada that has just celebrated its third anniversary.  The Fund is offered by Global Growth Assets Inc., (www.globalgrowth.ca) (“Fund Manager”), a subsidiary of a Global family of Companies, based in Toronto. 
 
The Fund’s Series A has delivered impressive performance, with  annualised rate of return as of September 30, 2013 (net of Management Fees): one month 0.31%;three months 2.86%; six months 9.00%; one year 15.87%; three years: 7.73% and, since inception, 5.46%.
 
The Fund is an ethical global equity fund that is Shariah compliant.  It is for investors interested in including ethical or socially responsible holdings in their portfolio.  It is also for investors looking for capital appreciation through investments that adhere to Islamic financial investment principles.  The Fund avoids certain kinds of businesses or sectors such as alcohol, tobacco, pork related products, financial services, weapons and defense, entertainment and gambling, to name a few.  An investor in the Fund would have a moderate risk tolerance and a medium to long term investment horizon.
 
To ensure the Fund meets Shariah requirements, the investments are carefully selected and scrutinised by the Dow Jones Islamic Market Index (DJIMI) Shari’ah Supervisory Board, an independent Board consisting of five eminent scholars from around the world.  The geographical diversity of the scholars ensures that diverse interpretations of Shari’ah law are represented.  The Board includes Sheikh Abdul Sattar Abu Ghuddah (Syria), Sheikh Nizam Yaquby (Bahrain), Sheikh Dr.  Mohamed A. Elgari (Saudi Arabia), Sheikh Yusuf Talal DeLorenzo (United States) and Sheikh Dr. Mohammad Daud Bakar (Malaysia).
 
To achieve its fundamental investment objective, the Fund invests directly in (i) equity securities of public companies listed on the Dow Jones Islamic Market Index (DJIMI) - 100 TITANS; (ii) instruments that mirror the performance of the DJIMI or a selection of public companies listed on the DJIMI; and (iii) other investments that have been deemed Shariah compliant by an applicable Shariah advisory committee.  Components of the DJIMI are selected by filtering the index universe through screens for business activities and financial ratios to remove stocks that are not suitable for Islamic investment purposes.  The remaining holdings are evaluated according to several financial ratio filters, based on criteria set up by the DJIMI Shariah Supervisory Board to remove companies with unacceptable levels of debts or interest income.  In addition to the quarterly and annual composition reviews, the Index is reviewed on an ongoing basis.  The majority of holdings are selected from this index, which means the fund portfolio is compliant on an ongoing basis.  The Dow Jones Shariah Supervisory Board (the Board) makes declarations regarding the “Purification” of the DJIMI and determines which amounts of gains derived in the index are considered “non-compliant” and thus required to be donated to charity.  The Portfolio Advisor and the Fund Manager subsequently determine which of these amounts are applicable to the fund.  From time to time, the Fund Manager may also allocate and donate a percentage of the net income on investments from the Fund’s portfolio to charitable organisations of its choice.
 
The fund is rated in Canada by Morningstar as a 3-Star fund and sold by several top financial institutions including top investment advisors and other independent financial advisors.  The Fund is managed by the portfolio management team of UBS Wealth Management Canada and its auditors are Deloitte.  Borden Lardner Gervais (BLG) is the Fund’s legal counsel.  CIBC Mellon is the Fund’s custodian and DataCore is the Fund’s record keeper.  The Fund has an Independent Review Committee (IRC) which monitors and reviews, among other things, any real or potential conflict of interest.
 
Email: jgraham@blg.com
Tel : +1 416 367 6174
Fax : + 416 361 7377

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