Infusing Shariah compliance, Catholic social teachings and Halakhic law into its investment strategies, an advisory firm in the US has teamed up with a robo-advisor to bring faith-based investment opportunities to the North American retail market as the world prepares to observe major religious activities.
Previously only available to the institutional market and accredited investors, Magni Global Asset Management will now offer three of its faith-based investment portfolios — the Magni Halakhic (Jewish) portfolio, Magni Islamic Stewardship portfolio and Magni Catholic Values portfolio — to individual investors, IFN has learned. Facilitating the firm in tapping the retail market is San Francisco-based fintech company Newday Impact Investing, a robo-advisor with a niche focus on environmentally sustainable and socially responsible companies with good governance practices.
Already offering 12 impact investment strategies including those supporting climate action, sustainable agriculture and gender inclusion, Newday will add the three religious portfolios, which will invest in large public US companies for a minimum of US$100, to its digital platform. The benchmark for the Shariah compliant portfolio is the Shariah S&P 500 while the Catholic and Jewish portfolios will be benchmarked against the S&P 500.
“The Newday/Magni partnership is a great example of good things that are still going on in this world. Not only is it an opportunity for everyone to be able to align their financial strategy with their personal values, but it’s incredibly timely — April marks a month where we are celebrating three religious holidays: Easter, Passover and Ramadan,” Doug Heske, CEO of Newday Financial Technologies, the parent company of Newday Impact Investing, told IFN. “The simultaneous introduction of these strategies supports our work in building bridges between communities that will support a better tomorrow. Getting our faith-based institutions to work with one another is critical in this equation. This is also a shared challenge for corporations, nonprofits, government, faith-based institutions and citizens.”
Magni Global worked with religious leaders in the three different faiths to incorporate both the overall guidance and specific differences and applied traditional finance methods to build the respective portfolios.
“Our work with Imams and Shariah scholars was around the application of the Maqasid and some Hadiths to codify Islamic guidance on governance so that it could be integrated with a secular best practices model of governance,” Kurt Lieberman, CEO of Magni Global Asset Management, shared with IFN, explaining that constructing the Islamic Stewardship portfolio was relatively the easiest due to the advanced development of Islamic financial instruments. “Conversely, the Halakhic portfolio was the most challenging. Jewish finance is not well developed. We used rabbinical scholars to interpret original writings in order to develop a Halakhic screen (it operates in an analogous way to a Shariah screen).
The introduction of these avenues on Newday’s digital platform follows a growing trend in the US of fintech providers tapping the fragmented Muslim market, which has relatively limited Shariah compliant investment options. In recent years, Islamic fintech start-ups such as Wahed Invest and Zoya have entered the fray to meet the untapped demand.