Alpha Capital launches country’s first ethical fund

DAR ES SALAAM: ALPHA Capital on Tuesday became the first firm in the country to introduce an ethical fund that adheres to Islamic principles.

The open-ended collective scheme, dubbed Alpha Halal Fund, received all blessings from the Capital Markets and Securities Authority (CMSA), targeting to raise 10bn/- in two months.

The minimum initial investment is 100,000/-, with units priced at 100/- each during the initial sale.

The CMSA Director of Market Supervision and Investigation, Mr Exaud Julius, said that the fund aligns with the government’s objectives to broaden access to financial services for both urban and rural populations.

“The Halal Fund complies with all legal requirements, regulations and guidelines for Islamic investment schemes,” Mr Julius said at the launch event yesterday.

Alpha Capital will maintain the fund management function while CRDB Bank is the custodian and trustee.

CRDB harbors nine of the ten open ended collective investment schemes currently active in the country.

Alpha Capital Chief Executive Mr Gerase Kamugisha stated that the fund will operate in strict adherence to Islamic principles.

“Considering the ethical motto of the Fund, it does not only cater for Islamic investors, but for ethical investors in general,” Mr Kamugisha said.

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The initial sale of the fund will run for two months because the managers intended to attract a broader investor base across the country.

“We aim to contribute to economic growth and create a more prosperous future for Tanzanians,” the Chief Executive said.

The Fund is dedicated to investing in Shariah-compliant equities, sukuks, and public funds, including ExchangeTraded Funds (ETFs) that meet Shariah standards.

By integrating these investment vehicles, the Alpha Halal Fund aims to provide ethical investment opportunities that align with Islamic finance principle.

Therefore, treasury bonds and bank stocks, along with sectors such as alcohol, tobacco, weapons and entertainment are excluded from the investment universe deemed unsuitable for the Islamic community.

Deputy Minister of State in the Office of President (Planning and Investment), Mr Stanslaus Nyongo, said that the fund expands investment opportunities for citizens.

“This opens a new avenue for investment,” he said.

Alpha Capital’s Head of Research and Financial Analytics, Mr Imani Muhingo, said that the fund will operate in local currency and will target investments in the EAC and SADC regions.

“We expect a major portion to be invested in sukuk and sharia-compliant equities,” Mr Muhingo said.

The fund will allocate 70 per cent of its investments to sukuk, with the remaining 30 per cent invested in various foreign funds for liquidity management.

The Fund has appointed CIFCA as its Islamic advisor to conduct an annual Shariah compliance audit.

The Shariah Advisory Board is chaired by Prof Mohamed Hafidh, Chief Executive Officer of Zanzibar’s Presidential Delivery Bureau.

The Shariah-compliant fund is already available in some East African Community countries, including Kenya and Uganda, as well as in SADC countries like Mauritius and South Africa.