Product news: Mackenzie launches halal mutual fund

Editorial note: This story was updated on Feb. 21 with additional context from Mackenzie.

Mackenzie has launched three products, including Canada’s first widely available halal mutual fund, the company announced Tuesday.

The Mackenzie Shariah Global Equity Fund will help Muslim Canadians invest according to their faith. Muslim investors follow the criteria of halal, what is permitted, and haram, what is prohibited. The fund, which excludes haram industries such as pork, gambling, weapons, alcohol and tobacco, will become available on Feb. 22.

Hash Assad, an executive financial consultant with IG Wealth Management, told Advisor.ca he was pleased Mackenzie released the product widely so it can serve Muslims across Canada. In July 2023, Mackenzie had launched the Mackenzie FuturePath Shariah Global Equity Fund, which was exclusively available to Primerica clients.

Mackenzie is the asset-management arm of IGM Financial, which also owns IG Wealth Management.

It’s a huge day, Calgary-based Assad said: “The halal investment fund is 19 years in the making.”

Assad had been petitioning IG to create a halal fund since he joined the company nearly two decades ago. Although there are over 4,000 mutual funds in Canada, Muslims cannot invest in them, as funds don’t disclose all of their constituent companies, Assad said.

The Mackenzie Shariah Global Equity Fund is certified by the Shariah advisory board of Ratings Intelligence, and its continued compliance will be reviewed on a semi-annual basis.

The fund manager will pick several hundred stocks from an approved list of companies in the Dow Jones Islamic Market World Index, said Jeff Ray, vice-president of product development with Mackenzie. 

Ray hopes the fund will reach $30 million to $50 million in assets under management by the end of 2024. While the new Shariah fund is 100% equities, he said there’s an opportunity to create fixed-income or balanced products in the future to help Muslim Canadian investors balance their portfolios. 

“We could look at something pure fixed income or put together one or more balanced products, which allows an advisor to go to an investor and say, ‘Based on your KYC, either this solution is best for you or this solution is best for you,'” Ray said. 

Assad said he’d like to see portfolio funds launched that match the risk appetites of different investors, noting that such funds already exist in the U.S.

“We want to have a portfolio solution for clients that want to have that balance,” he said, adding that his “ultimate dream” would be for a variety of funds to be pre-made, prepackaged and automatically rebalanced.

However, since interest-bearing investments are haram, there needs to be more investigation into creating a balanced fund, Ray said. Some Muslims have bought precious metals, as they can appreciate without using interest. Mackenzie’s gold bullion fund could become part of a future multi-asset Shariah-compliant fund, for example. 

The two other products announced were the Mackenzie World Low Volatility ETF and the Mackenzie World Low Volatility Fund, which invests in the ETF. The ETF is an actively managed global portfolio designed to provide investors with stability, a release said. Both the ETF and mutual fund are available beginning Tuesday.

Lester Asset Management launches Canada’s first biodiversity fund

Montreal-based Lester Asset Management launched Canada’s first biodiversity fund, the company announced Tuesday.

The Lynx Global Diversity Fund invests in publicly traded companies that benefit from long-term climate action such as reversing nature loss, environmental protection and addressing water and food security.

The investments will be driven by targets set at the U.N. Biodiversity Conference in Montreal (COP15) to halt and reverse biodiversity loss as well as increase financial disclosure by companies on nature-related impacts.

This story has been corrected. The halal fund launching this week is not the first in Canada, as the headline previously stated.