gif Interview
TAPPINGINTO SHARIAH ETFS, interview with Saeid Hamedanchi, CEO of
ShariahShares.inc
The Shariah ETF industry is growing steadily, and there is increasing scope for the progress of the Islamic finance industry in offering Shari- ah-compliant products and ETF services to a global platform.
Mr Saeid Hamedanchi, CEO of
ShariahShares.inc, tells GIF more about the Shariah-compliant ETF industry and this growing sector, in this ex- clusive interview.
Mr Saeid Hamedanchi is the founder and CEO of ShariahShares Inc. Saeid has more than 25 years’ experience in the business world, with the past 17 years spent working in the financial services industry both in the US and abroad. Prior to founding ShariahShares, Saeid worked as a senior investment officer at the Islamic Development Bank (IDB).
Saeid Hamedanchi, CEO of Shariah-
Shares.inc
Tell us more about your current role as founder and CEO of ShariahShares Inc? As a founder of ShariahShares, my respon- sibility is to create a vision and strategy for our firm. I am also responsible for execution of our strategy. I have put together a com- plete management team, who have strong expertise in the operations and marketing of exchange traded funds (ETF).
Currently, my top priority is to identify venture investors who can provide venture financing for our firm, as we aim to become operation- al as an ETF sponsor. We are interested in speaking with investment banks and money managers globally.
Indexation products for Shariah-compliant shares have not been widely developed in the Islamic finance industry. What are your views on this lack? The Islamic finance asset management in- dustry has traditionally managed money us- ing active strategies. The situation has been similar in the global conventional market.
36 Global Islamic Finance May 2012
Indexing gained popularity in the conven- tional asset management industry during the 1970s. Vanguard was a pioneer in de- veloping the passive asset management in- dustry. However, there are very few index or passively managed mutual funds focusing on Shariah investments, either regionally or globally.
Lack of education and knowledge on the part of investors has been a major factor acting against the popularity of the Shariah- compliant indexing industry. In the conven- tional asset management industry in the US and Europe, index managers spent a lot of resources (time and money) on educating institutional and retail investors on the ben- efits of a passive investment management strategy.
This strategy has yielded great results, as indexing has become extremely popular. To- day, index managers compete very effective- ly with active managers, in both institutional and retail markets. ShariahShares has the
opportunity to become the largest provider of passively managed ETFs in the Islamic fi- nance industry, by offering high-quality ETFs at a competitive management fee.
What is the scope for investors who want actively managed solutions, and how can companies incorporate this into their of- ferings? Asset allocation is an important factor in determining the risk and return of a portfo- lio. According to a study conducted by Gary Brinson, L. Randolph Hood and Gilbert Bee- bower (BHB) , asset allocation is the most important factor in determining the return of a portfolio rather than a security selection. Asset allocation accounts for 86% of the portfolio return.
Investors working together with their advi- sors can design actively managed or tactical asset allocation programmes using Shariah- compliant ETFs, to invest in various asset classes.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88