Legal & General (L&G) has launched a new Islamic Investment Proposition, providing Muslim pension savers with more Shariah-compliant investment options.
The new product aims to encourage Muslim communities to save for retirement by providing Shariah-compliant investing options such as employer contributions and personalised risk levels. The proposal includes a lifestyle glidepath option, which adjusts investments as savers approach retirement, as well as self-select funds for active investors.
HSBC Asset Management (HSBC AM), which is known for its expertise in Islamic finance, will handle the funds. HSBC AM engages Shariah academics and maintains governance to ensure conformity with Islamic law. Investments exclude companies that engage in non-compliant activities such as alcohol, tobacco, and traditional financial services.
The proposition includes the L&G Islamic Growth Fund for long-term capital growth and the L&G Islamic Retirement Fund, which balances risk and growth for individuals approaching retirement. L&G also provides three self-selected Shariah-compliant funds for people who choose more active pension management.
L&G head of DC investments governance and proposition Jesal Mistry says: “While the pensions market has begun to have the conversation around the ethnicity pensions gap, much more needs to be done. L&G has a strong track record of developing innovative solutions to improve the outcomes of our members and we’re pleased to build on our track record by bringing this Islamic Investment Proposition to market.
“HSBC AM’s Shariah-compliant investment expertise, combined with L&G’s scale and expertise in serving over 5.3 million DC members, will enable us to help address a critical gap in the UK pensions market and significantly broaden access to Shariah compliant DC solutions.”
HSBC Asset Management global head of ETF and indexing sales Olga de Tapia says: “We are pleased to partner with L&G to provide investors with a range of Shariah compliant investment solutions. Ensuring faith based investors have the same range of investment opportunities as their conventional counterparts is extremely important, and we are proud of the fact that we are able to help individuals invest in a way that is commensurate with their principles.”
