It follows similar products overseas, where customers can choose a superannuation fund in line with Islamic principles.
The fund is called ‘Personal Choice, Private Era’ and is being run by private Islamic wealth management company Crescent Wealth, through the Association of Independently Owned Financial Professionals’ personal choice category, called ‘Personal Choice Private e-wrap.
Crescent Wealth’s managing director Talal Yassine says the superannuation option is partly modeled on similar products overseas.
“That means you comply with Islamic rules on investment, you don’t invest in banks or financials, pornography, alcohol, armaments and pork related industries,” he said.
Mr Yassine says it also means the fund will not invest in companies with a lot of debt.
“It’s very conservative investing, it means not investing in companies with a lot of debt, have a lot of money outstanding or take part in prohibited activities,” he added.
Pauline Vamos, the chief executive of the Association of Superannuation Funds of Australia, has welcomed the new addition to the superannuation market.
“The new providers, the new products, are part of the recent reforms that the [Federal] Government has put in place to superannuation, so we’re getting much greater innovation and a much better deal for fund members and consumers,” she said.
Ms Vamos says the new Islamic fund is a boutique service for a part of the community that meets their retirement needs.
Mr Yassine says he does not know how many of the nation’s half-a-million Muslim Australians will choose the new fund.
He says similar products in the United States have been running for many years and have attracted many non-Muslims too.
“They’ve got $4 billion [in] funds [under] management after 20 years, however the makeup of their customers is 10 per cent from the American Muslim community and 90 per cent from the broader American community.”
The Immigration Minister Chris Bowen (pictured) will officially take part in the launch of the new fund in Sydney’s south-west tonight.
Mr Bowen has made a point of promoting Australia as a major financial hub in Asia, which has a large Muslim population.
Ms Vamos says Islamic finance is potentially a huge growth industry for Australia internationally.