Bank of London and the Middle East (BLME) has launched a Shari'ah compliant money market fund in Europe which it claims is the first and largest of its kind.
The $50,000,000 Sharia'a Dollar Income fund is structured as a Luxembourg-domiciled SICAV-SIF and aims to provide income plus security of capital.
It invests in a diversified portfolio of high quality Islamic money market instruments including Sukuk, an Islamic bond and Ijara, the lending of assets.
The fund's Shari'ah supervisory board will review contracts and agreements relating to all BLME's transactions to ensure they are consistent with the principles of Islamic jurisprudence.
The fund has been run on a seed portfolio basis since 17 March 2009 and has delivered 4.71% net yield against the three month dollar Libor benchmark since inception on 17 March 2009.
Managed by Jason Kabel, the fund is available to institutional and professional investors in the UK, Europe and Middle East.
Kabel was previously fund manager of money markets within F&C's credit team and managed approximately £6bn of funds.
Nigel Denison, head of asset management at BLME, says: "The past 18 months have been a difficult time for investors globally, with trust diminished due to large scale losses.
"We believe that transparency, fairness and integrity, the guiding principles of Islamic finance, will now become the watchwords for the asset management industry."
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