Aviva launches new Shariah investment strategy

Aviva has announced plans to launch its new Shariah lifestyle investment strategy which will include a suite of funds compliant with Islamic principles.

The new lifestyle investment strategy will enhance Aviva’s existing Shariah offering by providing its workplace pension members with a universal de-risking option as well as a target drawdown glidepath. This will offer members a greater choice of options as they approach retirement.

The funds and de-risking mirror Aviva’s flagship My Future and My Future Focus strategies to create consistency across its investment proposition.

The new Shariah lifestyle investment strategy aims to deliver for customers through a dual approach. Islamic investment principles are built into the funds, while automated de-risking ensures the appropriate amount of risk is taken throughout the pension journey.

Umar Yaqoob, Workplace Investment Proposition Manager at Aviva, said: “Historically across the market Shariah investors have broadly had to make their own investment choices and have relied on a single fund solution without access to de-risking. Solutions in the market are starting to evolve, but it’s important these go beyond just moving investments from a higher risk to a lower risk fund and consider the different ways people will access their pension.

“Our new Shariah lifestyle investment strategy brings together a suite of funds to create de-risking solutions that offer members the choice to have a hands-off approach from the point they join their pension scheme through to retirement or select a lifestyle strategy that aligns with how they want to access their pension savings at retirement.”

The new strategy aims to address the growing demand for Shariah-compliant funds.

Yaqoob continued: “We support over 4 million members across 26,000 corporate pension schemes and we recognise the need to offer a diverse range of investment solutions to mirror an inclusive society. This new lifestyle investment strategy enables an underserved section of the market to benefit and is aligned to our other flagship auto enrolment default solutions in terms of the glidepath, pension saving targets at retirement, and investment strategy.”

The new range of funds have been created using HSBC Asset Management (HSBC AM) funds and are available for self-selection by members, namely: Aviva Pension HSBC Islamic Global Equity Index, Aviva Pension HSBC Shariah Multi Asset and Aviva Pension HSBC Global Sukuk Index. Governance of the funds’ Shariah compliance sits with their long-established Global Shariah Supervisory Committee. Aviva recognises HSBC AM’s presence and track record within the faith-based investment solution market and its care in providing Shariah solutions to the market.

The funds are subject to ongoing supervision by the Global Shariah Supervisory Committee, and they invest in a diverse range of assets such as UK and international equities, Sukuk bonds, commodities, and property.

Olga de Tapia, Global Head of ETF and Indexing Sales, HSBC Asset Management, said: “We are pleased to partner with Aviva to provide investors with a range of Shariah-compliant investment solutions, supporting them in their efforts to deliver a de-risking solution that offers members multiple retirement options. The launch of our Islamic Investment Range was driven by our ambition of providing faith-based investors with the same range of investment opportunities as conventional counterparts, and we are proud to reach an even larger pool of individuals enabling them to invest in a way that is in line with their principles.”

Aviva has already welcomed its first investors to the new range of Shariah funds and the lifestyle investment strategy. It plans to make these options more widely available to workplace pension schemes and their members over the coming months.

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• We are the UK’s leading diversified insurer and we operate in the UK, Ireland and Canada. We also have international investments in India and China.
• We help our 19.6 million (as at 31 August 2024) customers make the most out of life, plan for the future, and have the confidence that if things go wrong we’ll be there to put it right.
• We have been taking care of people for more than 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2023, we paid £25.6 billion in claims and benefits to our customers.
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