NEST-eggs incubated ethically through sharia mandate

The UK’s National Employment Savings Trust (NEST) has awarded F&C Asset Management and HSBC Global Asset Management the management of its ethical and sharia mandates.

The defined-contribution fund, which outlined its investment policy at the end of March, named the two following a competitive tender process, and the appointments complete NEST’s line up of managers.

F&C Asset Management has been awarded NEST’s Ethical Mandate which will initially invest in actively managed and screened global equities as well as some UK government bonds.

The equity portion of the Ethical Fund will be invested in the F&C Stewardship International Fund, an actively managed global equity fund, and one of the longest running ethical pooled-investment products in the UK.

NEST has thoroughly investigated the market for ethical investment, including its target market’s primary ethical concerns.

This research informed NEST’s approach and led it to selecting an equity fund manager “that applies a robust approach to screening out companies with poor records when it comes to human rights, the environment and corporate governance, while seeking to generate value by investing in companies with a positive impact on society”.

“NEST is a landmark initiative that will transform the pensions landscape in the UK. F&C is excited to working with NEST to bring our expertise in ethical and sustainable investing to its members,” said Cristobal Mendez de Vigo, F&C Group Head of Institutional & Distribution Business Development.

NEST awarded its sharia mandate to HSBC Global Asset Management and the fund will invest solely in the HSBC Life Amanah Pension Fund.

The fund passively tracks the Dow Jones Islamic Titans 100 index, a global equity index screened so as to be in accordance with sharia principles.

“Today’s announcement demonstrates that NEST is committed to offering a diverse range of investment solutions that will meet the needs of its members. By selecting the HSBC Life Amanah Fund, managed by HSBC Global Asset Management, members of NEST will have access to a fund that is compliant with sharia principles and features a proven investment process and track record, along with robust risk management,” said Stuart White, HSBC Global Asset Management (UK) Institutional Director.

HSCB Amanah serves more than 700,000 customers across the world, with assets under management of more than $16 billion.

It offers customers a range of financial solutions that are structured so as to be in strict adherence to sharia law.

“These latest appointments are excellent additions to NEST’s choice of fund managers. I am delighted that all of our fund managers have such depth of experience in their particular fields. Both of these funds should provide an excellent foundation for helping our members who want to make a choice based on ethical or faith grounds save for retirement,” said NEST Chief Executive, Tim Jones.

NEST has already appointed State Street Global Advisors, UBS Global Asset Management and BlackRock to run five mandates for its default fund.