Islamic Global Equity Fund

The Western Pension Plans add an Islamic Global Equity Fund to the options

Western and Sun Life are pleased to offer the Islamic Global Equity Segregated Fund as a new investment option for Members of the Western Pension Plans starting June 1, 2023.

Western’s Joint Pension Board seeks to offer members choice – being responsive to the needs and preferences of our diverse community. We are pleased that an option which enables members to participate in the plan in accordance with their religious beliefs is now available. This fund is a recognition of the diversity of needs among Western employees in investing their pension savings.

Learn more about the new Islamic Global Equity Fund (pdf)

The underlying fund is managed by BlackRock. It is a passively managed fund benchmarked to the MSCI ACWI Islamic Equity Index. The fund invests in a diversified portfolio of global equity stocks. The Index that the Fund is tracking reflects the Islamic investment principles. The index provider, MSCI, has an advisory panel of Islamic scholars that verifies that the Index is in compliance with Islamic investment principles.

What are the principles of Islamic finance?

Some of the Islamic investment principles that the fund adopts are:

  • Prohibition of investment in certain industries, products and services that are considered harmful to society such as alcohol, tobacco, adult entertainment, and weapons.
  • Prohibition of interest, as interest may negatively affect society and lead to inequality. As wealth and assets are required to generate interest, the rich are more likely to earn interest and accumulate wealth, while the poor can’t do so. In addition, interest may reduce the incentive to perform charitable deeds, as interest earners may be more motivated by wealth creation and less motivated to build a society that benefits all people.
  • Shared risk and reward among all parties. This principle prohibits activities where one party benefits at the expense of others, including:
    • Prohibition of elevated uncertainty, such as conventional insurance where insurance buyers pay a premium in exchange for uncertain or no payoff with uncertain timing.
    • Prohibition of transactions where one party’s gain comes solely at the expense of other parties, such as gambling.

Other Resources

The Morningstar Fund Sheet for this fund, at September 30, 2023 contains additional details about the fund’s investment objective, strategy, and performance. Morningstar reporting is updated on the Sun Life member site following the end of each quarter. Sign in at www.mysunlife.ca/western and select Manage plan, then my plan. To explore the advanced Morningstar tools, click Plan overview at the top of the page and select View available investments.

The Factsheet for the MSCI ACWI Islamic Index to which the fund is benchmarked provides additional detail and historical performance.

The ideas associated with this approach to investing are not exclusive to members of the Muslim community. Other religions as well as traditional (non-Islamic) financial perspectives, such as socially responsible investing, share the same ideas such as:

  • Social justice
  • Equality and inclusion
  • Being a good steward of society

For more information on responsible investing and the Western Pension Plans, sign in to your account at www.mysunlife.ca/western and select Manage plan, then my plan.  Choose Learning at the top of the page and select Responsible investing.

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