Adl Capital and Comtrust launch first-ever Shariah-compliant income fund

In 2011, Adl Capital and Comtrust successfully pioneered Sri Lanka’s first open-ended Shariah compliant equity fund, ‘The Crescent i-Fund,’ and the launch of this income fund which will invest only in Shariah-compliant money market instruments rather than equity, will offer investors an alternative investment opportunity that offers regular returns.

Taking into consideration the increasing demand for regulated Shariah based investments and the prevailing limitations on such investments, the launch of the Comtrust – Adl Mudarabah Fund is both appropriate and timely and is expected to fill a market vacuum where the demand for Islamic banking and financial products/services outweighs the available supply.

Whilst the launch of the fund bears testimony to Adl’s keen desire to drive forward Shariah-based capital market services in Sri Lanka, it also demonstrates Adl’s readiness in meeting local market trends. The fund opens new doors of opportunity and adds variety to the investment options of a growing customer segment.

The fund’s core objective would be to provide tangible monetary benefits on a regular basis to local and foreign investors, across a wide market segment ranging from institutions, charities, corporates as well as retail investors.

Deutsche Bank will act as trustee to the fund and will monitor all investments. The fund itself will be under the purview of Sri Lanka’s capital market regulator, the Securities and Exchange Commission of Sri Lanka, and funds would be deployed in permissible and low risk investments that comply with Sri Lanka’s regulatory directives as well as with Shariah guidelines.

Commenting on the launch of the fund, Associate Director of Adl Capital, Azad Zaheed said, “The Comtrust – Adl Mudarabah Fund has been structured with dual objectives. Whilst it meets the aspirations of short term investors, the dund importantly fulfills a long felt need of Sri Lanka’s Islamic banking and finance industry by offering an effective investment mechanism to the retail and institutional investor.

“This potential investor segment also includes Islamic financial institutions and Islamic banking windows who may wish to either invest or draw from the Comtrust – Adl Fund to meet their financing requirements. It is also an opportunity for investors to diversify their existing portfolios.”

Zaheed also observed that the fund’s profit sharing ratio (PSR) of 90:10 ranks among the highest in Sri Lanka’s Islamic finance market. Other beneficial features of the fund include a low minimum investment of Rs. 1,000, tax free dividends in the hands of the investors, the flexibility of redemption at short notice and the absence of entry and exit fees.

Further, the investments by the fund in any institution or investment product has a limit placed on it together with a maximum investment horizon of 12 months making the Comtrust – Adl Mudarabah fund worthy of consideration.