Baillie Gifford unveils Islamic Global Equities fund

Baillie Gifford has rolled out an Islamic global equities fund investing in growth companies aligned with Shariah principles. 

The asset manager is tapping into the growing global interest in Islamic investing on the view Muslims are still faced with a lack of good options in the Shariah-compliant space.

Portfolio manager Tolibjon Tursunov said: “Investing in line with your beliefs should be simple, but for many Muslim investors, it isn’t. Islamic equity funds account for less than 1% of the global equity universe, and most offer little more than a screened index.” 

Tursunov and co-manager Saad Malik take a bottom-up approach, investing globally in around 50 Shariah-compliant growth companies, and aim to outperform the MSCI ACWI Islamic Index by 2% per annum over rolling five-year periods.

As well as using company-focused research the team works closely with Islamic scholars and index providers to improve industry standards and widen the investible universe. The managers consider the likely legacy each company will have on society and the environment when assessing its potential to grow sustainably over many years. 

Tolibjon said: “Before launching, we established strong working relationships with leading scholars within Islamic finance and other industry stakeholders. These efforts have paved the way for dialogue that adds value for clients, but also benefits the wider Islamic investment community.”  

Islamic Global Equities has been in development for over seven years and is structured as a Dublin-domiciled UCITS fund. The strategy is seeded with $2.7m and Baillie Gifford is optimistic on the potential for scaling up the strategy, with $8bn the current soft cap.