Islamic Banking

Dubai Launches Islamic Hedge Fund Index

Nick Parmee, 8 January 2009

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The Dubai Multi Commodities Centre Authority and asset manager Shariah Capital have launched the Dubai Shariah Hedge Fund Index, the first internationally-recognised index comprised exclusively of Shariah-compliant hedge funds. It will be calculated and reported by Thomson Reuters.

The index reflects the performance of the DSAM Kauthar Commodity Fund, an equally-weighted fund-of-funds comprised initially of four single-strategy, commodity-focused funds that invest exclusively in Shariah-compliant long/short equity hedge funds on the Al Safi Trust platform. 

The Al Safi Trust is a Shariah compliant platform designed specifically for hedge funds and launched recently by Barclays Capital and Shariah Capital.  Distributed under the DSAM Kauthar label, the four funds underlying the index have been seeded with $50 million each by DMCCA. 

The Dubai Shariah Hedge Fund Index itself is not an investable vehicle.  However, it mirrors the returns of the DSAM Kauthar Commodity Fund, which is open to institutional and individual investors on a monthly basis. Investors can use the index to compare the performance of their other professionally-managed absolute return investments and to determine strategies that include diversification into commodities such as those covered by the index.

DSAM - Dubai Shariah Asset Management - is a joint venture between Dubai Commodity Asset Management, a wholly-owned subsidiary of DMCCA, and Shariah Capital, a publicly-traded company that creates and customises Shariah-compliant products and platforms.  DSAM develops and brands commodity-linked investment products under the DSAM Kauthar name and distributes them in the UAE through DCAM, a UAE-licensed financial investment company.

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