SGAM AI plans launch of S&P-linked sharia-compliant index funds

SGAM Alternative Investments (SGAM AI) plans to launch a series of sharia-compliant index funds linked to Standard & Poor’s (S&P) sharia indexes by the end of August.

The funds will track the S&P US Shariah Index, S&P 350 Europe Shariah Index, S&P 500 Japan Shariah Index, S&P BRIC Shariah Index and S&P GCC Shariah Index. To market these index funds, SGAM AI plans to use various local distribution networks. It will target institutional investors and distributors in the Middle East in particular, but it said that demand in Asia and Europe is also strong. The funds will be sold in a Luxembourg-based SICAV UCITS III format and they are currently awaiting approval from the Luxembourg regulator, the Commission de Surveillance du Secteur Financier (CSSF).

In July 2006, SGAM AI created the SGAM AI Baraka Index, based on a selection of global sharia equities, whose performance has reached 29% since launch (33.90% annualised), followed by several structured products linked to SGAM AI Baraka Index. SGAM AI currently manages €7.8 billion in index funds and €19.2 billion in structured products.

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