Salam Pax fund range now available via Calastone order routing

Salam Pax funds can now be transacted via Calastone’s international order routing network that will support Salam’s cross-border and international activities.

The Salam Pax fund range is the first Shariah-compliant fund suite available as risk-profiled products and is recognized an early mover by making this Islamic fund range available as an RDR-compliant ‘unbundled’ fund share class. The group has investors across Europe and a growing international investor base in both retail and wholesale markets.

Lawrie Chandler, Director of Salam Pax added, “Calastone helps to optimize our UK fund dealing and simplify our growing European cross-border distribution. We have great ambition for further growth and have every confidence that by automating our processing and back office capabilities this will help us achieve the benefits of scale on a domestic, regional and international basis.”

Calastone’s ambition is to connect fund providers, managers, distributors, platforms, custodians and fund administrators. Irrespective of firms’ size or location, it seeks to enable the industry to interoperate, reap the full potential of automation, benefit from straight-through processing, and reduce cost and risk by taking full advantage of the efficiencies that automated transaction processing can offer.

Commenting on the introduction of Salam Pax to the network, Isabell de Wit, Associate Director said, “We welcome, support and seek to play a part in driving greater innovation, distribution and efficiency right across the investment lifecycle. We applaud Salam Pax’s early recognition that by making the fund range available as an RDR-compliance share class this would offer distribution opportunities and potential to reach investors all over the world. Many of the largest distribution platforms are connected to our global network and we look forward to playing a role in helping this fund become successful by providing interoperation, automation and access to a wide range of connected investment parties.”

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.