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HSBC Islamic Global Equity Index Fund

Introducing Islamic Investment Principles

Building portfolios underpinned by the principles of Islamic investing that deliver both investment returns and better outcomes for society as a whole.
Sefian Kasem, Global Head of ETF & Indexing Investment Specialists

In focus

  1. Summary Paper: Introducing Islamic Investment Principles

  2. Investment Stewardship Report: Q4 2022

  3. Fund Overview

Why consider this Fund?

  • Independent oversight: an independent Shariah Committee consisting of two internationally renowned Islamic scholars overseeing investment in the Fund to ensure compliance with Islamic principles
  • Global exposure: tracks the Dow Jones Islamic Market Titans 100 Index of the 100 largest global stocks that comply with Islamic investment guidelines
  • Full physical replication: the Fund aims to invest in all the constituents of the Index in the same proportion as the Index
  • Strong inflows: launched in October 2022, the Fund size is now over USD3bn*
  • Low costs: 0.3 per cent ongoing charge figure
  • HSBC Islamic Global Equity Index Fund is passively managed and index tracking

*Source: HSBC Asset Management, as at 31/12/23



Fund Finder Middle East Awards 2024 - HSBC Islamic Global Equity Index
Source: www.fenwick-media.com/awards

 

Shariah philosophy

Islamic Finance differs from conventional finance in the following ways:

  • Ban on interest (Riba)
  • Ban on uncertainty (Gharar)
  • Ban on speculation and gambling (Maisir)
  • Risks and profits are shared among all parties
  • Ethical investments that enhance society
  • Underlying assets must be tangible and identifiable

Source: HSBC Asset Management as at 31/03/23

 

Key risks

  • Investment risk: The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. Lower volatility may result in a lower return relative to the reference index
  • Counterparty Risk: The possibility that the counterparty to a transaction may be unwilling or unable to meet its obligations
  • Derivatives Risk: Derivatives can behave unexpectedly. The pricing and volatility of many derivatives may diverge from strictly reflecting the pricing or volatility of their underlying reference(s), instrument or asset.
  • Exchange Rate Risk: Changes in currency exchange rates could reduce or increase investment gains or investment losses, in some cases significantly.
  • Index Tracking Risk: To the extent that the Fund seeks to replicate index performance by holding individual securities, there is no guarantee that its composition or performance will exactly match that of the target index at any given time (“tracking error”).
  • Investment Leverage Risk: Investment Leverage occurs when the economic exposure is greater than the amount invested, such as when derivatives are used. A Fund that employs leverage may experience greater gains and/or losses due to the amplification effect from a movement in the price of the reference source.
  • Liquidity Risk: Liquidity Risk is the risk that a Fund may encounter difficulties meeting its obligations in respect of financial liabilities that are settled by delivering cash or other financial assets, thereby compromising existing or remaining investors.
  • Operational Risk: Operational risks may subject the Fund to errors affecting transactions, valuation, accounting, and financial reporting, among other things
  • Shariah investment restrictions may result in the funds performing less well than funds with similar objectives which are not subject to these restrictions.
Past performance does not predict future returns. The fund is denominated in USD. Returns may vary with fluctuations in the exchange rate.
Further information on the potential risks can be found in the Key Investor Information Document (KIID) and/ or the Prospectus or Offering Memorandum.

For more information on the HSBC Islamic Global Equity Index Fund, contact us