FCP Tawfir Halal Fund

For its first Shariah compliant investment offering, the Ivory Coast-based NSIA Asset Management structured its FCP Tawfir Halal Fund to have holdings that span equities and Sukuk issued in the eight member states of the West African Economic and Monetary Union (WAEMU).

Launched on the 6^th June 2024, this open-ended fund has diversified exposure across Benin, Burkina Faso, the Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo – denominated in the common currency of the West African CFA franc, which is pegged to the euro.

Up to 70% of the fund’s assets can be invested in equities listed on the Bourse Régionale des Valeurs Mobilières (BRVM) – the regional stock market of these eight nations which were previous French colonies, except former Portuguese colony Guinea-Bissau.

A 15% cap applies on the holdings of any specific company stock, with the limit raised to 20% if this counter is a BVRM Composite Index constituent.

The fund manager can also invest up to 70% of the NAV in Sukuk, subject to no more than 15% in each nation’s Sukuk issuances. A 10% cap is imposed on investment in other Islamic fund offerings while cash and bank deposit holdings can go up to 40% of the NAV.

Actively managed with full investment discretion, the fund uses a notional blended benchmark of 70% WAEMU sovereign securities yield curve and 30% BRVM Composite Index. The yield curve represents the risk-return ratio of different tenors relative to risk-free rates of return attached to a combination of government securities.

By the end of 2024, NSIA Asset Management reported that this fund generated 8.59% in returns. No distributions were declared as all income would be automatically reinvested, with the fund manager recommending investors to maintain holdings for at least a five-year horizon.

Catering to both institutional and retail investors, each share was initially priced at XOF5,000 (US$8.90) – but smaller offerings of each share, subdivided into units of a thousandth, were made as well.

Should the fund’s NAV hover below XOF100 million (US$177,870) for over 30 days, a request may be submitted to the authorities to terminate this fund.

*Disclaimer:  The opinions and viewpoints expressed in this Fund Profile do not constitute recommendations for any funds highlighted. The information presented is not investment advice and should not be treated as such.

Source: NSIA Asset Management