At Element Investment Managers, meeting the needs of our clients has always been important to us. What is required by and what is best for our clients will continue to guide our choice of which unit trust funds to offer. With this in mind, and after receiving a number of enquiries over the last few years, we are pleased to have launched the Element Islamic Balanced Fund during the second quarter of 2010.
The main benefits of investing in a balanced fund are that, in the long term, it gives the investor exposure to a wider range of asset classes combined to deliver the best risk-adjusted returns. Meanwhile, in the shorter term, responsibility for trading between different asset classes is delegated to portfolio managers who can position the fund so as to obtain the highest risk adjusted returns.
In simple terms, the Element Islamic Balanced Fund will hold a smaller allocation to equities and a larger allocation to Islamic cash investments, when compared to an equity only unit trust. With equities having a higher risk profile compared to cash investments, the Element Islamic Balanced Fund is likely to experience lower long term returns and lower levels of risk.
The launch of the Element Islamic Balanced Fund follows on our success in managing institutional balanced mandates for both Shari’ah and non-Shari’ah investors. We have a strong long-term track record since October 2003 for the Element Institutional Balanced Fund, where this fund has outperformed its benchmark by 3.5% per annum from inception to the end of 2009 (a little over 6 years). As for the Element Islamic Balanced Fund, we have been managing similar funds since August 2005. Element Investment Managers were the pioneers in terms of designing Islamic cash investment products in South Africa. We have managed these products for individual investors and within portfolios since 2005.
The Element Islamic Balanced Fund is a prudential variable equity unit trust that complies with the regulations that govern retirement funds (Regulation 28). Regulation 28 allows for the equity exposure to range from 0%-75% but, in accordance with Shari’ah guidelines, the combined equity and property holdings will never fall below 30%. The fund aims to provide Muslim investors with the opportunity to achieve long term wealth creation within a moderate level of risk. This is done by investing in a portfolio of equities listed on the JSE Limited and Sukuks, in accordance with the Islamic Principles approved by the Shari'ah Supervisory Board.
The Fund is therefore suitable for:
• investors who are looking for Shari'ah compliant returns
• investors who wish to save for their retirement
• retirement funds
• investors who wish to delegate the asset allocation function to an experienced investment management team
• investors who have a moderate risk profile with a medium to long term investment time horizon
As with all our other unit trust funds, we do not charge an initial fee, nor do we charge performance fees, as this cannot be charged equitably for all investors. A reminder to existing investors in the Element Unit Trust Funds, we do not charge a switching fee if you wish to switch all or a portion of your investment in one fund to another Element Unit Trust Fund.
Fund manager - Mohamed Shafee Loonat
