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FAO's Investment Centre is stepping up its support for creating more robust and sustainable agri-food systems – World – ReliefWeb

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21 December 2020, Rome – Mohamed Manssouri, Director of FAO’s Investment Centre discusses the Centre’s work and expansion plans.

What’s the FAO Investment Centre?

Simply put, the FAO Investment Centre creates investment solutions in sustainable food and agriculture. The Centre offers a range of investment support services helping countries to create long-term investment policies and plans, to design and implement investment projects with financing partners and to generate knowledge and build capacities related to investment.

Better investment in food and agriculture leads to more efficient and equitable food systems as well as greater resilience in the face of climate change and other shocks such as COVID-19.

What’s new is that FAO members have recently agreed to inject significantly more resources into the Centre – enabling it to expand, provide more in-depth investment support to countries and strengthen its collaboration with international and national financial institutions and other development partners.

As FAO Director-General QU Dongyu said, “together, we are transforming agriculture and food systems through targeted investment, innovation, knowledge and strengthened capacities.”

In the last three years alone, we helped mobilize US$ 19 billion of public investment to create stronger and more sustainable food systems. And in Sub Saharan Africa alone, in 2020 we supported the design of US$ 2 billion new public investments that will provide people with access to healthy food and create jobs. A good example is the Joint Programme to Respond to the Challenges of COVID-19, Conflict and Climate Change, benefitting six countries in the Sahel by investing in agricultural infrastructure, innovative technology as well as human and social capital in cross border areas facing security issues. Both FAO and World Food Programme (WFP) will be supporting the G5 Sahel Secretariat and International Fund for Agricultural Development (IFAD) in project implementation. The cost of the project is US$ 180 million over six years of which 109 million financed by IFAD and US$ 71 million by the Green Climate Fund.

In 2020, we supported the implementation of projects worldwide in some 120 countries. This consists of providing critical technical support to governments during the projects’ implementation period (typically around five years) to make sure that investments are on track to deliver the desired outcomes. The Centre’s multidisciplinary teams can address implementation issues related to all aspects of agriculture and rural development including infrastructure and irrigation, agriculture, livestock, fisheries, forestry, etc. The Centre also provides support to better soft investments in human and social capital and capacities, governance and institutions, farmer organizations and community development.

You mentioned COVID-19. Could you tell us about the Centre’s work in relation to this?

Countries have been looking to FAO for policy guidance on responding to COVID-19 and technical assistance to ongoing projects. In response, we provided timely policy advice, undertook rapid impact assessments of COVID-19 on food systems to inform countries’ decisions and solutions to mitigating the negative effects of the pandemic on their food and agriculture sector.

With investment partners such as the World Bank – the Centre’s oldest and largest partner – we developed response packages and reoriented ongoing projects to address the COVID-19 challenges.

With the European Bank for Reconstruction and Development (EBRD), we established a ($ 3 million) technical response facility to help the agri-food sector to overcome COVID-19 challenges and to strengthen food systems’ longer-term resilience.

With the European Commission, we are undertaking rapid food systems assessments in many countries – by end of 2021 we aim to reach 61 countries, among the most affected by food insecurity and malnutrition. The assessments are only the first step. The work will help to shape new policy recommendations in food and agriculture, and potential private and public investments in food systems transformations in those countries. We are also working with many partners, including European Development Finance Institutions, to help de-risk investments in the agri-food sector – a sector marked by uncertainty and volatility even at the best of times.

We are also integrating COVID-19 response activities into the Global Agriculture and Food Security Program (GAFSP) projects in countries such as Bangladesh, Ethiopia, Haiti, Senegal and Yemen.

The Centre has also stepped up its actions to increase visibility and influence public debate on the need for investment in food systems as the world works towards building back better.

We have a good track record of bringing stakeholders together from the public and private sectors, including farmers and their organizations, to discuss policy issues and resolve bottlenecks.

In parallel, the Centre has been key to the rolling out of the poverty-focused Hand-in-Hand Initiative in close to 40 countries.

(Note: more info on the Centre and its work on COVID-19 here).

Apart from supporting the COVID-19 response, could you give some other examples of the Centre’s work and key achievements in 2020?

Despite these difficult times, the Centre succeeded in supporting countries to mobilise public investments worth $ 6.1 billion – $ 500 million more than in 2019 – for over 30 agricultural projects.

Our investment team played a substantial role in the design of a new regional investment project to revitalize economic activities and food systems in six Sahel countries – Burkina Faso, Chad, Mali, Mauritania, Niger and Senegal. The Rome based UN agencies – FAO, IFAD and WFP – partnered with G5 Sahel to strengthen the resilience of rural households in cross-border areas of the six countries, reaching almost one million people impacted by either conflict, climate change, or the COVID-19 pandemic. It is anticipated that the partnership will expand to involve the Green Climate Fund and other partners.

We forged new partnerships with financing institutions to expand our investment support, and new collaborations are being built with the European Investment Bank, the Asian Infrastructure Investment Bank and others.

Mindful that public money alone is not enough to end poverty, we are creating new and innovative partnerships to transform how development is financed, especially through blended finance – the use of public or philanthropic money combined with private investment into businesses that generate social and environmental impacts alongside financial returns.

For example, we are working with the European Commission, through the AgrIntel initiative, providing advisory services to impact funds and blended finance operations investing in small and medium agribusinesses through equity and loans. Blended finance is certainly an area to watch.

In collaboration with the EU Delegation in Uganda, the Centre is strengthening the national Uganda Development Bank (UDB) to finance responsible private investments in food and agriculture.

Blending FAO’s knowledge and expertise with finance and working with national and international financial institutions will help our member countries achieve the impact at the scale required to achieve the SDGs.

The Centre is also teaming up with research centres to advance knowledge in digital agriculture, human capital, and foster opportunities for rural youth and women across the food value chain.

Another key area is green and climate financing, helping countries better tap into this type of financing. Both directly as FAO and with financing partners, we unlocked around $ 675 million of green financing with the Green Climate Fund between 2018-20.

What’s ahead for the Centre? What are some of the main priorities over the next years?

We will continue to work with international funds and banks on ways to strengthen the resilience of the food systems. This means helping public and private actors to transition to greener and better production systems that offer better nutrition without harming the environment, ultimately leading to a better life for all.

We will also continue to enable and promote the use of new data sources and climate-sensitive technologies (like geospatial data, digital applications and drones) to create better investment planning, risk management and lower interest rates for farmers.

We look forward to supporting national banks in more countries to enable them to finance more and better farmer and private investments in sustainable food and agriculture.

What are the key ingredients for creating sustainable growth?

I would sum it up as: a clear long-term strategy, improved policy environment and critical public investment to accelerate the adoption of innovation including digital and green technologies and practices, alongside basic infrastructure. Public investment is critical to catalyze private investment, particularly in finance. Meeting the SDGs – from ending poverty and hunger to building a more equitable, healthier and greener world – calls for more blended financing.

Increasing efficiencies in the food system must also go hand-in-hand with reducing inequalities, creating decent jobs and livelihoods for women and youth especially. In this respect, public investment in human capital of the men and women who produce, process and trade food (especially small-scale farmers) is essential as an enabler for all the rest: growth, sustainability, equality and inclusiveness.

There is a need for urgent action to transform agri-food systems. The resources – intellectual, financial and material – are there, but we must be better organized and coordinated so that the world’s efforts are not too late and ineffective for too many people.

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Taxation of investment funds – Lexology

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Introduction

Israel – known as the ‘start-up nation’ – has encouraged and attracted inbound foreign investments for many years. Investors looking to invest in Israeli companies may do so by:

  • investing directly;
  • investing in investment funds managed by others; or
  • establishing a private investment fund.

Recent years have shown an increased interest and investment activity in Israeli companies by foreign investors, several of which have formed an Israeli corporate venture capital (CVC) fund for this purpose.

Among the primary tools for encouraging inbound investments is the special tax regime for private investment funds. Over the years, the Tax Authority has issued substantial guidance and numerous private rulings under the Income Tax Ordinance, providing significant tax benefits to foreign investors and private investment funds operating in Israel.

This article outlines the income tax arrangements applicable to private investment funds operating in Israel. These arrangements are predominantly based on Income Tax Circulars 9/2018 and 10/2018, which govern the taxation of venture capital funds and private equity funds, respectively.

The special tax regime applicable to private investment funds is currently under review by the Tax Authority and the Ministry of Finance. As such, tax benefits that are available under the existing regime may be adjusted and further criteria for entitlement may be added. However, such changes are not expected to affect the existing arrangements for non-Israeli limited partners.

Criteria for beneficial tax treatment

The principal conditions for beneficial tax treatment for non-Israeli investors regarding their investments in private equity and venture capital funds are as follows:(1)

  • The fund must have at least 10 unrelated (directly or indirectly) investors.
  • Investors may not hold more than 20% of the capital of the fund, with the anchor investor able to hold up to 35% of the capital of the fund.
  • At least 30% of the investors in the fund must be non-Israeli investors.
  • Total investment commitments must be at least $10 million, of which at least $5 million must come from non-Israeli investors.
  • The fund may not invest more than 25% of its total commitments (net of management fees) in any single company.
  • The fund may not invest more than 20% of its total funds raised (after deduction of management fees) in companies whose securities are publicly traded.
  • The fund may not hold short-term cash deposits or publicly traded securities, unless they originate from:
    • monies which investors transferred in accordance with their investment commitments in the fund; or
    • the realisation of profits prior to their distribution or reinvestment.
  • The fund must invest in ‘qualifying investments’ (as defined below) in Israel in accordance with the lesser of the following alternatives:
    • at least $10 million in qualifying investments of which at least $6 million must be invested, directly or indirectly, in Israeli resident companies whose intellectual property is owned by them and/or in their non-Israeli parent companies; or
    • at least 50% of the fund’s total commitments in qualifying investments, of which at least 30% of total commitments must be invested, directly or indirectly, in Israeli resident companies whose intellectual property is owned by them and/or in their non-Israeli parent companies.
  • The fund must be managed by the general partner or by a person on its behalf. The limited partners may not take any role in identifying targets or managing the portfolio companies or in the day-to-day management of the fund and will have no voting rights in the investment committee of the fund.
  • The fund may be required to provide certain financial information to the Tax Authority.
  • Investors in the fund may be required to provide certain information to the fund or the Tax Authority in order to establish their right to enjoy the benefits of a Tax Authority ruling issued with respect to the fund.

Definitions

For purposes hereof:

  • a ‘qualifying investment’ is an investment in shares of an Israeli resident company or an Israel affiliated company whose principal activity is a qualifying activity, including venture capital investments. Investments in securities traded on the stock exchange will not be considered qualifying investments, unless the fund’s holding period of a publicly traded portfolio company is at least one year from the time of the fund’s first investment therein;
  • a ‘qualifying activity’ is the establishment or expansion of enterprises engaged in activities in Israel in the areas of industry, agriculture, tourism, transport, construction (excluding real estate), water, energy, technology, communications, computing, security, medicine, biotechnology or nanotechnology or research and development in these areas;
  • an ‘Israel affiliated company’ is a foreign company whose principal assets and/or activities, directly or indirectly, are in Israel;
  • ‘shares’ include stock options and warrants, convertible notes and convertible bridge loans which are not secured by assets other than the technology or the assets which the target company owns; and
  • ‘venture capital investments’ are qualifying investments in the high-tech sector, where at least 75% of the total investment is in consideration for the issuance of shares.

Beneficial tax arrangement

If all of the above criteria are met, the following will apply to the non-Israeli investors in the fund and in the general partner.

Tax arrangement for non-Israeli limited partners

Income derived from non-Israeli investments (ie, non-Israeli companies or non-Israeli affiliated companies) will be exempt from tax in Israel.

Income derived from venture capital investments (ie, capital gains, dividends and interest) will be exempt from tax in Israel.

Income derived from qualified investments that are not venture capital investments will be taxed as follows:

  • Income from the realisation of qualified investments will be exempt.
  • Dividend income received from the qualified investments will be taxed as follows:
    • Dividend income attributed to individual investors (including if held through a transparent entity for tax purposes in the country of residency of the individual) will be subject to tax at the rate of 15%.
    • Dividend income attributed to corporate investors will be subject to tax at the corporate income tax rate (currently 23%).
    • Notwithstanding the foregoing, foreign investors from a treaty jurisdiction may be eligible for the tax rates set out under the applicable treaty (15%),(2) subject to confirmation of tax residency and beneficial ownership by the Tax Authority
  • Interest income received from the qualified investments will be taxed as follows:
    • Interest income will be subject to tax at the regular applicable tax rates set out in the Income Tax Ordinance (individuals will be taxed at a rate of 15% to 50% depending on the nature of the interest; corporates will be taxed at 23%).
    • Notwithstanding the foregoing, non-Israeli investors from a treaty jurisdiction may be eligible for the tax rates set out under the applicable treaty (10%), subject to confirmation of tax residency and beneficial ownership by the Tax Authority.
  • Any other income (not covered above), including income from management fees received from portfolio companies, will be subject to the regular tax rates set out in the Income Tax Ordinance (up to 50% for individuals and 23% for corporates).
  • Foreign investors in the fund will not be considered tax residents of Israel and will not have filing obligations in Israel as a result of their investments in the fund.

Tax arrangement for non-Israeli fund managers

Based on the foregoing, and once the fund qualifies for tax benefits, the general partner and the managers of the fund may also be entitled to certain tax benefits. As stated above, the special tax regime applicable to private investment funds is currently under review by the Tax Authority and the Ministry of Finance. As such, tax benefits that are available under the existing regime may be adjusted and further criteria for entitlement may be added.

Taxation of carried interest

Carried interest income attributable to Israeli investments will be subject to tax at the rate of 15% in the hands of non-Israeli fund managers.

Carried interest income attributable to investments in foreign entities will not be subject to tax in Israel.

Notwithstanding the foregoing, non-Israeli general partners and fund managers from a treaty jurisdiction may be eligible for the tax rates set out under the applicable treaty, subject to confirmation of tax residency and beneficial ownership by the Tax Authority.

Taxation of management fees

Income derived from management fees will generally be subject to the regular tax rates set out in the Income Tax Ordinance (up to 50% for individuals and 23% for corporates).

Alternative tax arrangements if conditions are not met

Over the years, the Tax Authority has issued alternative tax arrangements for funds that do not meet the criteria described above, including funds:

  • that have fewer than 10 investors;
  • with commitments of less than $10 million;
  • in which the limited partners are involved in the management of the fund; and
  • in which the general partner is a substantial investor.

The following is a short description of the beneficial tax treatment available in some of these situations.

Funds that have fewer than 10 investors

Income from realisations of qualifying investments will be subject to 15% income tax in Israel.

Income from interest and dividend payments that are derived from qualifying investments will be subject to tax at the lesser of:

  • 15%; and
  • the tax rates under an applicable tax treaty.

Other income that is not derived or accrued from qualified investments will be subject to the tax rates established in the Income Tax Ordinance.

Income derived from non-Israeli companies (ie, non-Israeli or non-Israeli affiliated companies) will be exempt.

Funds with less than $10 million in commitments

A beneficial tax arrangement will be available to funds that are focused on making venture capital investments.

Income from realisations of venture capital investments will be exempt from tax in Israel.

Income from interest and dividend payments will be subject to tax at the lesser of:

  • the tax rates established in the Income Tax Ordinance; and
  • the tax rates under an applicable tax treaty.

Non-Israeli funds investing in Israel without representation in israel

Generally, such a fund will enjoy the same tax benefits as described under “Tax Arrangement for Non-Israeli Limited Partners” above.

Non-Israeli managers of the fund will be entitled to exemption from Israeli tax on their carried interest (as opposed to 15% tax on carry sourced from investments in Israel, for a fund with Israeli representation) and on their management fees.

Endnotes

(1) Limited partners holding more than 4% of the interests in a fund may not control the entities managing the fund and may not hold more than 10% of the general partner, if they wish to enjoy the tax benefits.

(2) For a percentage holding lower than 25%.

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Growth in Halal investing gives Muslims opportunity align investments with values – Investment Executive

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Najar says the main driver for his investment decisions is religious.

“I cannot do the other way, it’s just impossible. Even if there is money to be made I cannot make it that way,” he said from Vancouver.

The money he invests must do no harm and be beneficial for society. Usaries are forbidden because the Qur’an says Muslims aren’t allowed to profit from lending money, so earning interest from an individual or bank is prohibited.

Socially responsible investing, including those based on religious beliefs, is a growing trend in Canada with assets under management surging to $3.2 trillion last year, up from $2.1 trillion in 2017, according to the Canadian Responsible Investment Trends Report.

Responsible investing represents nearly 62% of Canada’s investment industry, up from 50.6% two years ago.

Investing based on religious values remains a small but growing subsection of this trend.

Like all investing, those who make decisions based on their faith should educate themselves and find a trusted financial adviser, said Najar.

That’s especially crucial for Halal investing because most financial advisers are not familiar with the detailed web of options and restrictions, said Jesse Reitberger, co-founder of Canadian Islamic Wealth, who guides Najar’s moves.

Reitberger has focused on helping the Muslim community to adhere to financial tenets of the Qur’an since converting to Islam in 2014.

He said many Muslims have sat on the sidelines or invested and just plead ignorance.

“They just keep their money either sitting in a chequing account or under their mattress at home,” he said from Winnipeg.

For many Muslims, especially older generations, that’s meant saving cash to make purchases of real estate, cars or gold.

Canada’s Muslim population exceeds one million and is expected to become the second-largest religion by 2030.

Finding investments that are Islamic compliant can be a challenge because Canada is an interest-based economy, said Reitberger.

The Dow Jones Islamic Index and S&P/TSX 60 Shariah contain several funds that hold permissible investments.

Other faiths have taken similar steps to investing, albeit without any prohibition on debt.

The Mennonite Savings and Credit Union was formed 56 years ago to allow members to “see mutual aid put into faithful practice.”

It created a family of socially responsible funds to help investors bridge the gap between their principles and the way they invest their money.

Renamed the Kindred Credit Union in 2016 to broaden its reach, about 70% of its 25,000 members have a faith-based affiliation.

“People have taken a really big interest in this simply because it allows them to align all aspects of their lives to reflect their beliefs including their finances,” said Tim Fox, director of wealth and investments.

Screens are put in place to exclude investments in alcohol, tobacco, cannabis, gambling, military and weapons, along with those that have negative impacts on human rights, employees and animal welfare.

“Those screens continue to evolve as a social awareness evolves. As a community, as a society we decide what is important and what we’re willing to invest in and not invest in.”

Kitchener, Ont.-based Meritas Financial was created early on because there were very few options available, added Kindred CEO Ian Thomas. Meritas Financial, a mutual fund company, merged with Qtrade Financial Management Inc. in 2010.

“Over the last two decades, with acceleration over the last 10 years, all of a sudden values or socially responsible investing or responsible investing has really come to the forefront and the outcome has become more mainstream.”

Other financial institutions that provide faith-inspired options include Khalsa Credit Union. It helps British Columbia’s Sikh community while Edmonton’s Christian Credit Union applies “Christian values to financial services.”

Companies such as Wealthsimple and Manzil have sprung up in recent years to fill in gaps for the Muslim community.

Online investment firm Wealthsimple said it is preparing to launch its Shariah-compliant ETF as early as next month to replace its current offering of 50 stocks.

It will contain more than 150 stocks and increased diversification.

“One of the problems that Shariah investors have is you end up screening out entire industries from how they can invest,” chief investment officer Ben Reeves said in an interview.

He said Shariah-compliant funds can generate similar returns to regular investment vehicles, noting that its current offering, launched in 2017, has returned about six per cent annually.

Mohamad Sawwaf, co-founder and CEO of Toronto-based Islamic finance company Manzil, created its own diversified portfolio offering — Manzil Halal Portfolios — in partnership with CI Direct Investing, the roboadviser arm of CI Financial Inc.

The portfolio includes alternatives to fixed income like Islamic mortgages that are based on real and hard assets. Meanwhile, New York-base Wahed Invest LLC offers an ETF that invests in Shariah compliant stocks.

“This is a very underserved community and this is about financial inclusion because they’re currently excluded within the Canadian marketplace,” said Sawwaf.

Sawwaf said market research has indicated that more than 70% of Muslim Canadians would adopt Halal investing if products are available.

That’s particularly true of younger Muslims who are more interested in investing than older generations.

Restrictions on fixed income end up helping investors to do well, added Sameer Azam, investment adviser at RBC Wealth Management.

“A lot of the criteria pushes you to companies with lower leverage so at the end of the day we see a lot of quality in our clients’ portfolio,” he said.

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Halal investing gives Muslims opportunity to make money in line with religious values – BNN

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TORONTO — Ahmed Najar only started investing two years ago after discovering a way to do so that aligns with his Muslim values.

The 36-year-old lab researcher turned to Halal investing that screens out forbidden investments such as pork, alcohol, tobacco, weapons, adult entertainment and the biggest no-no of all: debt, bonds or interest.

Najar says the main driver for his investment decisions is religious.

“I cannot do the other way, it’s just impossible. Even if there is money to be made I cannot make it that way,” he said from Vancouver.

The money he invests must do no harm and be beneficial for society. Usaries are forbidden because the Qur’an says Muslims aren’t allowed to profit from lending money, so earning interest from an individual or bank is prohibited.

Socially responsible investing, including those based on religious beliefs, is a growing trend in Canada with assets under management surging to $3.2 trillion last year, up from $2.1 trillion in 2017, according to the Canadian Responsible Investment Trends Report.

The rise of ESG investing

Paul Harris, partner and portfolio manager at Harris Douglas Asset Management, talks about the challenges ahead for companies and money managers as climate change and ESG investing move to the forefront of the investment world.

Responsible investing represents nearly 62 per cent of Canada’s investment industry, up from 50.6 per cent two years ago.

Investing based on religious values remains a small but growing subsection of this trend.

Like all investing, those who make decisions based on their faith should educate themselves and find a trusted financial adviser, said Najar.

That’s especially crucial for Halal investing because most financial advisers are not familiar with the detailed web of options and restrictions, said Jesse Reitberger, co-founder of Canadian Islamic Wealth, who guides Najar’s moves.

Reitberger has focused on helping the Muslim community to adhere to financial tenets of the Qur’an since converting to Islam in 2014.

He said many Muslims have sat on the sidelines or invested and just plead ignorance.

“They just keep their money either sitting in a chequing account or under their mattress at home,” he said from Winnipeg.

For many Muslims, especially older generations, that’s meant saving cash to make purchases of real estate, cars or gold.

Canada’s Muslim population exceeds one million and is expected to become the second-largest religion by 2030.

Finding investments that are Islamic compliant can be a challenge because Canada is an interest-based economy, said Reitberger.

The Dow Jones Islamic Index and S&P/TSX 60 Shariah contain several funds that hold permissible investments.

Other faiths have taken similar steps to investing, albeit without any prohibition on debt.

The Mennonite Savings and Credit Union was formed 56 years ago to allow members to “see mutual aid put into faithful practice.”

It created a family of socially responsible funds to help investors bridge the gap between their principles and the way they invest their money.

Renamed Kindred Credit Union in 2016 to broaden its reach, about 70 per cent of its 25,000 members have a faith-based affiliation.

“People have taken a really big interest in this simply because it allows them to align all aspects of their lives to reflect their beliefs including their finances,” said Tim Fox, director of wealth and investments.

Screens are put in place to exclude investments in alcohol, tobacco, cannabis, gambling, military and weapons, along with those that have negative impacts on human rights, employees and animal welfare.

“Those screens continue to evolve as a social awareness evolves. As a community, as a society we decide what is important and what we’re willing to invest in and not invest in.”

Kitchener, Ont.-based Meritas Financial was created early on because there were very few options available, added Kindred CEO Ian Thomas.

“Over the last two decades, with acceleration over the last 10 years, all of a sudden values or socially responsible investing or responsible investing has really come to the forefront and the outcome has become more mainstream.”

Other financial institutions that provide faith-inspired options include Khalsa Credit Union. It helps British Columbia’s Sikh community while Edmonton’s Christian Credit Union applies “Christian values to financial services.”

Companies such as Wealthsimple and Manzil have sprung up in recent years to fill in gaps for the Muslim community.

Online investment firm Wealthsimple said it is preparing to launch its Shariah-compliant ETF as early as next month to replace its current offering of 50 stocks.

It will contain more than 150 stocks and increased diversification.

“One of the problems that Shariah investors have is you end up screening out entire industries from how they can invest,” chief investment officer Ben Reeves said in an interview.

He said Shariah-compliant funds can generate similar returns to regular investment vehicles, noting that Its current offering launched in 2017 has returned about six per cent annually.

Mohamad Sawwaf, co-founder and CEO of Toronto-based Islamic finance company Manzil, created its own diversified portfolio offering — Manzil Halal Portfolios — in partnership with CI Direct Investing, the roboadviser arm of CI Financial Inc.

The portfolio includes alternatives to fixed income like Islamic mortgages that are based on real and hard assets, while Wahed Invest’s ETF invests in Shariah compliant stocks.

“This is a very underserved community and this is about financial inclusion because they’re currently excluded within the Canadian marketplace,” he said.

Sawwaf said market research has indicated that more than 70 per cent of Muslim Canadians would adopt Halal investing if products are available.

That’s particularly true of younger Muslims who are more interested in investing than older generations.

Restrictions on fixed income end up helping investors to do well, added Sameer Azam, investment adviser at RBC Wealth Management.

“A lot of the criteria pushes you to companies with lower leverage so at the end of the day we see a lot of quality in our clients portfolio,” he said.
 

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