TPT Retirement Solutions is the latest defined contribution (DC) provider to add Sharia-compliant sukuk bonds to its investment options for members.
Verity Trustees, the entity overseeing TPT’s DC offering, has appointed HSBC as the manager for the fund on the advice of TPT’s wholly owned asset management subsidiary, TPT Investment Management.
It means DC members will now be able to select the HSBC Global Sukuk UCTIS exchange-traded fund as an option in its self-select investment service.
Sharia law and sukuk bonds
Sharia law forbids the payment or receipt of interest, so traditional fixed-income instruments cannot be used in Sharia funds. Sukuk ‘bonds’ provide a share of ownership of an underlying asset and can appreciate in price. As they do not pay interest and are not debt instruments, they are compliant with Sharia law.
Philip Smith, DC director at TPT Retirement Solutions, said the addition “enhances the savings options available to DC members, and provides greater flexibility to build diversified, values-aligned portfolios”.
The growth of the sukuk bond universe has helped DC providers expand their offerings for Muslim savers in recent years. In 2024, master trusts including Nest and Smart Pension introduced sukuk bonds into their investment ranges, a move that has helped expand de-risking options and glide path designs.
Options continue to grow, as this week asset management giant Franklin Templeton announced the launch of two Sharia-compliant funds in its Luxembourg-domiciled range, one of which is a sukuk bond fund focused on ultra-short duration securities. The second fund is a quantitative portfolio of global equities managed in line with Sharia principles.
How master trusts are diversifying Sharia offerings with sukuk bonds
Aamina Zafar explores how master trusts are transforming Sharia-compliant pension funds to now include sukuk bonds in a bid to reduce risk for workers approaching retirement. Read the full article.
