In its efforts to make investing accessible and provide cost-efficient investment solutions to clients, Old Mutual Unit Trusts has launched the Old Mutual Global Islamic Equity Feeder Fund. The feeder fund enables rand investments from South African unit trust holders to be converted to foreign exchange through Old Mutual’s asset swap capacity. The fund aims to maximise the total return for investors by primarily gaining exposure to shares in the Old Mutual Global Islamic Equity Fund such as Novo Nordisk, Microsoft, Meta, Roche, and others. It is co-managed by Fawaz Fakier and Maahir Jakoet, portfolio managers at Old Mutual Investment Group.

“The Old Mutual Global Islamic Equity Fund was launched in March 2016 and has only been available for investment in United States Dollars (USD)” says Maahir Jakoet. “The fund is Shari’ah compliant, and therefore excludes companies whose core business involves dealing in alcohol, gambling, non-halal foodstuffs or interest-bearing instruments, amongst other exclusions. It complements the Old Mutual Shari’ah range which consists of the Old Mutual Albaraka Balanced Fund, Old Mutual Albaraka Equity Fund, Old Mutual Albaraka Income Fund and Old Mutual Global Islamic Fund.”

While the portfolio is not Regulation-28 compliant, it is suitable for retirement investors with a moderate-to-high risk appetite for equity investing and a time horizon greater than 5 years.

“The portfolio is aligned to Old Mutual Investment Group’s ethos of responsible investing as Environmental, Social, and Governance (ESG) principles are adhered to. Our combination of Shari’ah (a religious law) and ethical investing (an investment strategy that seeks to bring about positive change through considered investment decisions), results in an approach that is moral, sustainable, and socially conscious. This ties in perfectly with our investment philosophy of seeking out high quality businesses, with good cash flow and profit generation and healthy balance sheets, as we find that there is strong commonality between these types of companies and Shari’ah/Ethical investing. This philosophy inspires the way we work – mindful of how we manage our investment process and our clients’ portfolios”, says Fawaz Fakier.

In an ESG Asset Manager Survey recently published by 27four Investment Managers, Old Mutual Investment Group was named in the top three asset managers as measured on Policy, Resources and Governance; ESG implementation; Active stewardship; Transparency and disclosure, and Climate change among 53 South African asset managers.

Jakoet continues “As a global offering, the Old Mutual Global Islamic Equity Fund is predominantly exposed to the US market (65.3% as at the end of July 2022) followed by the UK and Canada, at 7.8% and 4.7%, respectively.”

The portfolio’s largest sector allocations include the information and technology sector at 29.2%, while consumer discretionary accounts for 18.1%, healthcare for 17.7%, and energy for 12.4%.

The portfolio is positioned for a slowing market in terms of it being invested in resilient businesses but “investors should remember that nothing lasts forever – including downturns” adds Jakoet.

“As an asset class, equities remain a key source of long-term returns, diversification, and inflation hedging even in economically challenging periods with elevated market volatility, so we are confident that the portfolio is well positioned to navigate market uncertainty and create long-term value for our clients” concludes Fakier.

The Old Mutual Global Islamic Equity Feeder Fund is now available for investors via Old Mutual Unit Trusts, the Old Mutual Wealth platform and other South African investment platforms that may host the fund.