Shariah Funds, a US offshoot of Meyer Capital has created the first Halal Hedge Fund. Targeting an asset base of $500 million with a minimum investment of $10 million, the fund is challenging traditional thinking in Islamic finance, which requires financial products to be compliant to Shariah law.
The primary aim of hedge funds is to reduce volatility and risk while attempting to preserve capital and deliver positive returns under all market conditions. Achieving such a fund while conforming to Shariah legal and financial restrictions has, until now, proved illusory.
Islamic financiers have already seen Shariah-compliant real estate funds, structured finance funds, long-only mutual funds, and Islamic indexes but not, until now, the totality on offer from long-short hedge funds.
Hedge funds have historically out-performed both mutual funds and major indexes, returning 17.5 percent compounded from 1998-2002 compared with 9.7 percent for mutual funds and 12.7 percent for the S&P500. Long-short funds constitute around one-third of the world's total 7,000 hedge funds estimated to be worth some $600 billion.
Details of the fund, devised with the co-operation of leading Shariah scholars in Bahrain and the USA, are to be revealed to an exclusive audience of delegates from around the world attending the International Islamic Finance Forum next month in Dubai.
Shariah Funds is an asset management company committed to the creation of Shariah compliant hedge fund and venture fund products for the Muslim investor in the Middle East, South East Asia, and North America. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
