Jadwa Investment launches global sukuk fund

The significance of the sukuk fund in the Islamic investment management industry is immense since it fills the gap of fixed income asset class.

Sukuks are widely known as Islamic bonds. Sukuks employ the principles of Islamic Finance in order to provide a Shariah-compliant tradable security, the financial characteristics of which are very similar to those of a conventional bond.

The first sukuk was issued in the Malaysian domestic market in the mid 1990s and since then sukuk issuance has exceeded $125bn globally.

The current mix of Islamic capital markets between equity and debt financing is tilted towards equity investments. With Sukuk industry growing at a rapid pace it is expected that in next 3 to 5 years the ratio could reach closer to equilibrium.

The Jadwa Global Sukuk Fund provides investors with an opportunity to do an efficient allocation of their investments by allocating a portion of their portfolio in the fixed income asset class which has been non existent in the Shariah-compliant investment management products.

The fund aims to invest its assets predominantly in a diversified portfolio of sovereign, quasi-sovereign, corporate and convertible sukuks. The fund may also invest in Shariah compliant project finance and structured finance transactions.

Mr. Ahmed Al Khateeb, Managing Director & CEO of Jadwa Investment said, 'Our vision is to be the top notch Islamic investment house in the Gulf Countries and Middle East. We are here to change the paradigm of Islamic investment management industry and we strive to provide our investors with a complete wealth management solution'.

He also mentioned that since Jadwa Investment began operations in February 2007, it has launched six funds, offered discretionary portfolio services for Saudi, GCC and Arab Markets and will launch more unique and sophisticated products before year-end.

Mr. Fadi Tabbara, Vice President Asset Management, added 'Diversification is a key to any asset allocation model. The introduction of Jadwa Global Sukuk Fund will provide investors an exposure to fixed income asset class to efficiently diversify their portfolio.'

The Fund is approved by Jadwa's Shariah committee. Each Sukuk in which the Fund invests will first be reviewed and approved by Jadwa's Shariah Committee to ensure that the structure of the underlying Sukuk complies with Shariah principles.