Launch Partners

Launch Partners

UK-based People’s Partnership exploring widening Shariah options

UK pension trust operator People’s Partnership saw its Shariah fund chart a strong performance of a 25.71% increase in net asset value (NAV) last year, with much of it coming in a 17.77% rise over H2 2024.

Deputy Chief Investment Officer Phil Butler told IFN Investor: “We have eight carefully-designed investment funds with a good diversification. These include a Shariah fund, which enjoyed a record-breaking year in 2024.

“Currently, we have no immediate plans to increase our present fund offering but are discussing ways in which we can widen our selection in ways members would like, such as Sukuk bonds, impact funds linked to sustainable development goals or private assets.”

In tracking the Dow Jones Islamic Market Titans Index, this Shariah fund is currently heavily invested in US equities (82.9%) – with the top holdings being among last year’s top performers like Amazon, Apple, Microsoft, Meta and Nvidia.

Despite this track record, Phil said the Shariah fund subscription is still a small part of the People’s Partnership portfolio. “Approximately 98% of our nearly seven million members are invested in the default fund.”

Separately, the UK Institute for Fiscal Studies (IFS) urged for ways to simplify the process of employees switching to Shariah compliant investment strategies.

This call was made in a report published on 23rd January 2025 – which examines ethnic differences in pension participation in the UK following the nationwide roll-out of automatic enrolment, the drivers of those gaps and the consequences for wealth accumulation.

The IFS report noted that about 10% of eligible employees of various ethnicities are not participating in a pension plan, the percentage rises to 16% for Pakistani employees and 24% for Bangladeshi employees.

“We find a range of evidence that religious beliefs and/or norms in Islam are important in driving higher pension opt-out rates.

“Muslims not from a Pakistani or Bangladeshi background are also disproportionately likely to opt out of workplace pensions.”

The IFS report pointed out that not participating in a workplace pension can lead to lower retirement income for such employees – as they would not receive the employer contribution that workplace pensions receive nor obtain the significant tax relief that private pension saving typically attracts.

“(An) employee on average earnings and making typical pension contributions throughout their career would see a 60% increase in their retirement income (including the state pension) compared with one who consistently opts out.”

UK pension trust operator People’s Partnership saw its Shariah fund chart a strong performance of a 25.71% increase in net asset value (NAV) last year, with much of it coming in a 17.77% rise over H2 2024. Deputy Chief Investment Officer Phil Butler told IFN Investor: “We have eight carefully-designed investment funds with a good diversification....

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