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Introduction to the Almalia Sanlam Active Shariah Global Equity UCITS ETF

Part 1: Introduction to the Almalia Sanlam Active Shariah Global Equity UCITS ETF

Part 2: Portfolio construction and methodology 

Part 3: AMAL Shariah ETF: Screening and compliance

Part 4: Why trade active ETFs?

The Almalia Sanlam Active Shariah Global Equity UCITS ETF (AMAL) is a Shariah compliant ETF which aims to achieve capital growth over the medium to long term, whilst complying with the principles of Shariah investment law. 

The fund invests in 20 to 35 best-in-class, high quality companies with strong growth prospects. These companies:

• Have the potential for high returns on capital
• Are not highly leveraged, meaning they do not have large amounts of debt 
• Have sustainable business models and a strong competitive advantage, which makes them more able to endure market downturns 
• Produce significant free cash flow after capital expenditure.

Our Shariah compliant ETF exhibits the four main features of Islamic financial products: it is asset backed, ethical, shares risks equitably and is subject to good governance. It is unconstrained by the benchmark, which means the fund manager can make investment decisions according to the prevailing market conditions.

When you trade ETFs your capital is at risk.

What is an ETF?  

This fund is an ETF (Exchange Traded Fund) which means it can trade on the stock exchange, just like any other stock and has a value that goes up and down depending on market conditions. For more information on the benefits of an ETF, please refer to our 'Why trade active ETFs' article.

Why invest in the Almalia Sanlam Active Shariah Global Equity UCITS ETF?  

The Almalia Sanlam Active Shariah Global Equity UCITS ETF (ticker: AMAL) is the world’s first active global equity Shariah-compliant ETF[1]. It is actively managed by a highly experienced team from Sanlam Investments, who have an award-winning track record [2] in managing global equities dating back to April 2008. 

The fund is managed by Pieter Fourie, Head of Global Equities at Sanlam Investments - an industry veteran with over 22 years’ experience in managing money. Pieter is supported by a team of six investment professionals who work hard to invest with the same quality investment process that has remained unchanged since inception of the strategy.

The fund is fully Shariah compliant and is reviewed by a panel of Shariah scholars from Amanie Advisors with expertise in Islamic finance. They review the proposed equity securities and the ongoing compliance of the ETF’s operations to ensure it remains ethical and subject to good governance under Islamic law.

As with all investments, when you trade ETFs your capital is at risk.

The investment philosophy

While always complying with the rules of Shariah investment, the Almalia Sanlam Active Shariah Global Equity UCITS ETF -AMAL will also adhere to Sanlam Investment’s flagship $1.8 billion Global High Quality strategy and will follow the same quality philosophy to stock selection.

This philosophy aims to generate consistent and sustainable market-beating returns by:

• Investing in 20 to 35 high quality and attractively priced global companies that are best-in-class and have strong growth prospects.     
• Remaining unconstrained by the benchmark, enabling the fund manager to make decisions according to the prevailing market conditions.     
• Having a robust and differentiated approach which sets it apart from other investment managers due to its valuation-driven ethos to bottom-up stock selection.     
• Not buying quality at any price and using an in-depth qualitative and quantitative analysis to determine what should be paid for a company.       
• Understanding the durability of a company’s competitive advantage

This differentiated approach allows the team to take advantage of the inherent short-termism in markets where an asset’s value may be temporally depressed.  They have an investment horizon that is longer than many in the market and this gives time for fundamental quality to assert itself into a share price.

Track record and performance  

The long-term track record of Sanlam’s Global Equity Team shows an understanding of risk, valuations, and when to exit overvalued businesses.  The strategy works on the premise that an active management framework is appropriate in a market where nominal returns will be lower than the last 10 years. 

The fact that the strategy has consistently outperformed the industry benchmark for 12 years (see graph below) goes some way to prove that a disciplined investment process, adhered to despite a turbulent macro environment, combined with active management that focusses on quality and bottom-up stock selection to construct a portfolio held for the long-term, can produce sustainable returns.  

The AlmaliaSanlam Active Shariah Global Equity UCITS ETF -AMAL will follow the same investment strategy.

Past performance is no guarantee of future performance

The performance data above represents the Sanlam Global High Quality Strategy –not the performance of the Almalia Sanlam Active Shariah Global Equity UCITS ETF.

The comparison index is the MSCI World Index with net dividends reinvested.  Sector is the IA Global Period: 30.04.2008 to 31.07.2020 represents a composite of the manager’s global equity track record. Past performance disclaimer. Performance from 30.04.2008 to 31.08.2012 is that of the ACPI segregated global equity mandate after all fees including transactions fees. From 31.08.2012 to 30.09.2012 is that of the MSCI World Index while the manager transitioned to the Sanlam group and from 30.09.2012 to 28.02.2014 is that of the Sanlam Private Wealth Global Equity Diversified Portfolio (net of all costs including transaction fees).  28.02.2014 is that of the Sanlam Global High Quality Fund, C share class, NAV based, total return (net of fees)

ACPI Investment Managers is an independently owned investment management partnership Past performance should not be taken as an indicator of future performance.

Since investors may be liable to external fees, charges and taxes, the illustrated returns are not meant to provide a measure of actual return to investors. Class C shares are only available to those investors who have a separate investment management mandate with the Investment Manager.  Sources: Sanlam UK, MSCI, Morningstar USD returns

Experience in Shariah Investments

Sanlam have prior experience in Shariah Investments, with a member of the team previously co-managing a Shariah portfolio in South Africa.  Sanlam are responsible for interaction with the Shariah advisors, and work with them to ascertain the compliance of all companies held within the portfolio. 

Awards and Accolades  

Since inception, the Sanlam Global High Quality Fund has continued to amass industry awards and accolades. Amongst its many honours are consecutive ‘Best Fund’ awards from the City of London Wealth Management Awards (2017 and 2018), the High Growth Portfolio Performance Award at the 2018 and 2019 Private Asset Management (PAM) Awards and the Long Only Equity Fund – Long Term Performance award at the 2018 Investors Choice Awards. It was also the recipient of the Best Fund Manager at the 2018 European Wealth Briefing Awards and has twice consecutively achieved FE Alpha Manager status in 2019 and 2020. In July 2020, the fund was recognised as a “Top Performer” by a highly distinguished industry body and in the same month received its third High Growth Portfolio Performance win at the 2020 PAM awards.

For more information, please visit the Fund page.