HSBC Amanah Finance

Indeed, HSBC is set to expand its presence in Islamic banking over the next year, and to roll out a full Islamic retail banking service in the UAE. HSBC already offers Islamic banking to clients in New York, Saudi Arabia and Malaysia. But its products look like solid investments whatever your religion.

Sharia-compliant funds and real estate are probably the only major asset classes capturing investor interest at the moment. So the new open-ended HSBC Amanah Global Properties Income Fund - which was launched in December 2002 - should prove popular.

This innovative fund offers an income stream based on long term rentals from US properties let to blue-chip tenants, with the added security of knowing that the tenants are Sharia-compliant.

'This is not just for religious investors,' explains Keith M. Driver who heads the Dubai office of HSBC's dedicated Islamic investment banking division. 'To be Sharia-compliant tenants have to have limited borrowings which is very important in the current business environment'.

In other words, an ethically correct investment will also be underpinned by solid finances and is therefore more likely to survive in today's turbulent times for global business. The Global Propertied Income Fund is intended to generate an annual return of 6-8%, after fees, and requires a minimum investment of $50,000.

'This is designed for an individual with a sizeable portfolio or an institutional investor, and is open-ended so the money can be withdrawn at any time,' says Mr. Driver. 'Indeed, we have kept the minimum investment high to encourage a long term approach, this is an income fund.'

'The advantage we offer over some traditional Islamic banks is our global presence and international standards of service. We also have an in-house panel of Islamic scholars who meet quarterly to review all our products at the conceptual level and ensure full compliance with Sharia Law.

But the new property fund is only its latest product. Amanah Finance first launched a capital protected Islamic equity fund over a year ago. December 1, 2002 saw the launch of the fourth HSBC Amanah Pan-European Protected Fund with a minimum investment of just USD5,000.

This offers a total minimum return of 7% over five years with 100% capital investment protection by HSBC. In other words, investors are sure to get 107% of their money back after five years, after fees, although this stock market-linked fund expects to do much better than that.

'We offer maximum transparency in the way our funds operate, and we also benefit from the excellent equity investment record of the HSBC group,' explains Mr. Driver. 'This is the gold standard of compliance for an Islamic product combined with international standards of service for an equity fund.'