Verity Trustees Limited (VTL) and Franklin Templeton have both announced expansions to their Shariah-compliant investment ranges, reflecting growing demand for Islamic finance solutions among pension scheme members and institutional investors.

VTL confirmed the addition of a Shariah-compliant fixed-income fund to its defined contribution (DC) self-select fund range, broadening the options available to members seeking value-aligned investments.

The trustee board, advised by TPT Investment Management, selected HSBC as the manager for the new fund.

The offering will provide access to the HSBC Global Sukuk UCITS ETF, which invests in Shariah-compliant fixed-income securities.

Sukuk instruments differ from conventional bonds in that they do not pay interest; instead, they generate returns through income derived from the underlying assets.

VTL said the fund has delivered positive absolute performance since its inception in January 2023.

The addition complements VTL’s existing Islamic Global Equity Fund and is intended to meet increasing member demand for Shariah-based investment options, while supporting diversification within DC portfolios.

TPT Retirement Solutions DC director, Philip Smith, said the new option enhances flexibility for members.

“We’re pleased to broaden out VTL’s self-select range with a Sharia-compliant fixed income option that meets member demand for a widening of Islamic investment options,” he continued.

“The Sukuk fund enhances the savings options available to DC members and provides greater flexibility to build diversified, values-aligned portfolios.”

Meanwhile, Franklin Templeton has launched two new Luxembourg-domiciled funds within its Shariah range, targeting investors across Europe, Asia and the Middle East.

The FTSF Franklin Global Sukuk Ultra Short Duration Fund aims to provide capital preservation and liquidity through investment in short-dated sukuk, supranational instruments and Shariah-compliant deposits.

The strategy is designed to meet demand for liquidity-focused Islamic investment solutions among pension schemes, wealth managers and institutional investors.

In addition, the firm is introducing the FTSF Franklin Shariah Systematic Global Equity Fund, which will use a multi-factor quantitative approach to deliver long-term capital appreciation while adhering to Shariah principles.

Managed by Franklin Templeton Investment Solutions, the strategy applies screening and financial ratio filters to ensure compliance with Islamic investment standards.

Franklin Templeton head of EMEA and Americas ex-US, Matthew Harrison, said the expansion reflects increasing demand for high-quality Shariah-compliant solutions.

“As one of the few global Shariah-compliant asset managers, we have investment professionals based in key sukuk issuance hubs, including Kuala Lumpur, Dubai and Riyadh,” he explained.

“The expansion of our Shariah fund range reflects growing demand from institutional and wholesale clients for high-quality Shariah-compliant investment solutions.”

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