First ever open-ended Shari’ ah-compliant fund launched

By Cassandra Mascarenhas

The first ever open-ended Shari’ah-compliant fund, the Crescent i-Fund, a joint initiative of the pioneer asset management company in Sri Lanka Comtrust Asset Management and ADL Capital Limited, was launched last week in the midst of many prospective investors.

Looking to invest chiefly in Sri Lankan equities, the Crescent i-Fund will provide Shari’ah conscious investors the chance to enjoy significant returns in the Sri Lankan stock markets and the fund’s objective of achieving long-term capital appreciation by investing in a portfolio of Shari’ah compliant equity securities listed on the Colombo Stock Exchange will allow them to do so.

The fund was granted approval by the Securities and Exchange Commission (SEC) of Sri Lanka last month and a Shari’ah Committee consisting of a distinguished panel of scholars of domestic and international repute will ensure that the operations of the Fund will be in accordance with Shari’ah principles and the Deutsche Bank will act as the Trustee on behalf of the investors.

Comtrust Asset Management, a member of the CT Holdings Group is one of the pioneer Unit Trust Management companies to be registered with the SEC and has a senior management team with extensive experience in the Sri Lankan equity markets.

The CT Holdings Group is one of the largest listed conglomerates on the Colombo Stock Exchange, with interests spanning retail, food and beverage, manufacturing, plantations, property development and financial services.

Some of the companies in the group include Cargills (Ceylon), Lanka Floortiles and Lanka Walltile, Horana Plantations, CT Land Development, CT Smith Stockbrokers and CT Properties.

ADL Capital Limited is registered by the SEC as an investment manager and its team of qualified professionals has extensive experience in the burgeoning Islamic finance industry with the combined experience of the key personnel in this industry spanning over a decade. The senior executive team at ADL has also been involved in equity markets, which enabled the company to actively contribute to the development of this pioneering effort.

With an investment policy of investing in long term stocks, the Fund will concentrate on engaging in fundamental research to identify stocks which would provide above-average returns over the long term and will invest in sufficiently diversified portfolios at all times to mitigate the risk of excessive volatility and achieve a satisfactory risk-return trade-off.

Created on 16 May 2011 by a Trust Deed executed between Comtrust Asset Management as the managing company and Deutsche Bank Ag Colombo as the trustee, the Fund will operate as an open-ended unit trust which can offer units to investors on a continuing basis.

The investment objective of the fund will be to achieve long term capital appreciation by investing in a portfolio of equity securities thus allowing investors the opportunity to invest in shares that have been deemed Shari’ah compliant by Shari’ah scholars as per the guidelines issued by the Accounting and Auditing Organisation for Islamic Financial Institutions, the standard setting body for Islamic financial institutions based in Bahrain.