A Melbourne-based boutique fund manager is launching the first retail investment product in Australia that fully meets Islamic Shari’ah law.
Intrinsic Investment Management has signed an agreement with the Muslim Community Co-operative of Australia (MCCA) to supply a version of its new managed discretionary accounts product (MDA).
Intrinsic managing director Glenn Woolley said the badged version of the new product will be called the Crescent Ethical MDA and will enable Muslims to invest while adhering to religious laws.
“The minimum investment will be $100,000 and we will share the fees with the MCCA,” Woolley said.
“This is the only product [in Australia] that has been endorsed by the Islam scholars to comply with Shari’ah law.”
Investors will be able to pick which stocks they want in their managed portfolio, enabling them to avoid traditional problem sectors such as alcohol and gaming stocks.
In addition, as Muslims are prohibited from receiving interest payments of any form, the fund allows individuals to avoid bank stocks.
Woolley, ANZ Funds Management’s former chief investment officer, said soft presentations to members of the Muslim community in Melbourne and Sydney had already taken place, ahead of the official launch in April.
He added that the new Intrinsic MDA is a next generation self-managed account and has already been operating in the US for a couple of years.
The asset management will be undertaken by Intrinsic, but the style of management can be tailored to the investor, who can choose growth, value, income or what Intrinsic describes as ‘fallen angels’ investment styles. The latter are stocks that were favoured once, but have fallen with the potential to bounce back, Woolley said.
The list of services provided by the fund manger depends on the amount of investment in the portfolio. For investors with less than $1 million, they are given their own investment manager, risk management services and tax management.
For investors with more than $1 million, additional services include individual portfolio risk and return projections, monitoring of other asset classes and personal investment briefings.
Apart from financial planners and dealer groups that can badge the product or just offer the service, Woolley sees a growth market for the product in self-managed super funds and accounting.