Australia’s first Sharia-compliant ETFs, the Hejaz Equities Fund and the Hejaz Property Fund, have now commenced trading on the ASX.
Hejaz Financial Services said that launching its funds as ETFs should provide Australian Muslims and other ethically conscious investors with greater access via a familiar investing format.
“While Islamic ETF products are widely available overseas, this will be the first time Islamic Finance products are listed on the ASX,” explained Hejaz Financial Services COO, Muzzammil Dhedhy.
“By making it simple for retail investors to access our award-winning funds, we are taking an important step towards our goal of providing high-performing, ethical financial products to Australian Muslims.”
Both of the funds refrain from investing in activities that are considered to be morally or socially injurious and in companies that primarily operate in such sectors including tobacco, gambling, adult entertainment, conventional banking and insurance, pork and weapons.
The Hejaz Equities Fund, which trades under the ticker code ISLM, is described as a growth fund with exposure to a diversified global equities portfolio of Sharia-compliant investments.
Hejaz said that the fund invests primarily in developed markets around the world and aims to achieve a total return equal to movements in the MSCI World Islamic Index Benchmark. It targets a 15 per cent return per annum after fees and has amassed $70 million under management.
Meanwhile, the Hejaz Property Fund, which trades under the ticker code HJZP, applies an ethical overlay to invest in globally listed REITs.
Similar to the Hejaz Equities Fund, Sharia investment principles are applied as negative screens to exclude investment assets based upon the nature of their business activities and their failure to meet financial thresholds relating to debt, liquidity and income.
The fund, which currently has $10 million under management, targets a return of 10 per cent per annum after fees and is benchmarked to the MSCI World REITs Index.
“Hejaz is also planning to launch a third ETF before the end of the year, providing retail investors with greater access to the Hejaz Income Fund, Australia’s highest returning Islamic Income Fund,” Mr Dhedhy added.
As of July, Hejaz had over $285 million in funds under management.
Equity Trustees has been appointed responsible entity for the new ETFs while Macquarie Securities Limited is involved in the launch as the market making agent.
“We are excited to be involved in the creation of Australia’s first Sharia Compliant ETFs and look forward to applying our funds governance expertise to both,” commented Equity Trustees executive general manager, corporate trustee services, Russell Beasley.
“We congratulate Hejaz Financial Services on delivering this milestone, and for their initiative in servicing an important, growing segment of the market.”
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.