Our Shariah Fund in focus

A closer look at our Shariah Fund and how it’s managed.

The Shariah Fund description

The Shariah Fund invests in a way that has been agreed upon by a supervisory board of eminent Shariah scholars from across the world.

This board, made up of Islamic scholars on the HSBC Shariah Supervisory Committee, sets out which companies may be invested in, and which are not consistent with Shariah law.

The fund invests in 100 of the largest companies in the world that are deemed Shariah compliant.

The amount invested in each company is based on the value of that company as a percentage of the total market value of all 100 of the companies, with no more than 10% being invested in any one company.

What is a Shariah-compliant investment?

The Islamic scholars on the HSBC Shariah Supervisory Committee interpret Shariah law and define, for the fund, which goods and services companies can sell to be in accordance with the tenets of Islam.

The committee also set limits on how much firms can borrow and how much interest income they can receive. Companies can also receive income that is not Shariah compliant provided this has been ‘purified’. The HSBC Shariah Supervisory Committee makes sure that all the companies the fund invests in comply with their interpretation of Shariah law on an ongoing basis.

What activities are excluded?

Any company that has more than 5% of its annual revenue gained from the following activities will not be included in the fund:

  • Alcohol
  • Tobacco
  • Pork-related products
  • Non-Islamic financial services (banking, insurance, etc.)
  • Weapons and defence
  • Entertainment (hotels, casinos/gambling, cinema, pornography, music, etc.)

The Shariah Fund will also not invest in companies with excessive levels of debt or impure interest income. This is reviewed regularly, and companies will be removed if they no longer comply.

Who is HSBC Amanah?

HSBC Amanah is the Islamic financial services division of the HSBC Group responsible for the development of Islamic financial products. Headquartered in Dubai with regional offices in London, New York, Riyadh, Kuala Lumpur, Dhaka and Jakarta.

The B&CE Shariah Fund is managed by HSBC Global Asset Management.

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