Nudge theory to be a better saver

Nudge theory is a behavioural science that uses subtle methods and psychology to help people move in the right direction. It proposes a positive reinforcement of behaviour or indirect suggestions to act in a certain way. Nudge theory can also be seen as a way to take the last step.

Nudge theory in financial services is less common than in other industries. Knowing you need to do something bu not acting is a common occurrence.

Here are some smart tips as a financial nudge to make you step over the line to a better saver.

  • Saving on the day you get paid makes it seem more affordable putting something aside when there is a larger sum.
  • With a pay rise direct some money into an investment plan. Its new money so put it away before you get used to it in your pay packet.
  • Unexpected income should be put into savings, don’t just spend it. Earn a guaranteed 25%.
  • Looking at a put spare change into a jar or in our digital world consider a debit card that rounds up and puts the money into a savings account.
  • Putting money away from your salary into a workplace pension often gets matched by your employer.

Other financial nudge tips. Share them with us and we will add the best ones to our list.

Salam Pax Sukuk Fund registered in France and UK

Salam Pax SICAV announced today the registration in France and the UK of the Serenity Sukuk Sub-Fund. The general public are now able to invest in both the Ethical Funds of Funds and Serenity Sukuk Funds. Salam Pax’s success in building the Ethical Fund of Funds investor base and robust returns has supported the business to strengthen the range of funds and open them to the general public. Salam Pax now comprises two risk profiled strategies that can be blended to match most investors’ risk appetite. The new registrations widen Salam Pax distribution footprint in the European institutional and wholesale markets allowing the fund to accept investments from an broader investor base. Continue reading

Gulf equity market drawback and one year outlook

A few comments from the LHV Persian Gulf Fund Manager on the middle east equity market falls in the past few weeks and some macro notes on where we go from here. 

Turbulence creates opportunities. And yes, we are seeing some turbulence also on the Arabian peninsula as a combination of falling oil prices, tumbling global equities and ongoing ISIS clashes in northern Iraq.Continue reading

Sharia compliant portfolio management

Islamic finance is a unique form of investment that is best compared with the values of socially responsible investing.

Shari’a-compliant portfolios promote large-scale investment along lines similar to the niche ethical funds available to Western consumers. It is an ethical and equitable mode of finance that derives its principles from Islamic law.

The main principles of Islamic Finance are:

Prohibition of interestMoney should be used to support productive economic ventures
Prohibition of uncertainty and gamblingAvoidance of economic transactions that are based upon uncertainty in both timing or quantum of any gain / loss
Mutuality / Profit and loss sharing / PartnershipIn an economic activity, when more than one party shares a risk, the risk each party faces individually is reduced
Ethics / Prohibition of forbidden activitiesAvoidance of activities that promote low ethical values, e.g. tobacco, alcohol, gambling, etc.

In building and managing a sharia portfolio it is vital that the wisdom of Shari’ah is paired with conventional skills to produce the best results.

CAPM strategic asset allocation for Islamic assets

Strategic asset allocation for a sharia portfolio

We maintain a global list of the best fund managers, securities and passive investments. Our expertise and forefront in this area has also seen us seed managers. Some investment groups will leave the sharia compliance to underlying managers or not perform annual reviews. Edale through its Salam Pax service has any investment approved prior to inclusion in a portfolio and an annual audit is performed to ensure all the assets and portfolio’s operation is sharia compliant.

There is a mistaken belief in some minds that Islamic investments are substandard in performance as they are constrained from participating within certain industries, like the conventional banking and entertainment industries. Our analysis shows Shari’a-compliant investments when compared to their conventional counterparts perform well.

To learn more about this type of investing and what Edale can offer, please contact us for further information.