TAMCO Portfolio Management
TM SHARIAH STRATEGY
(A Shariah Compliant equity linked PMS)
Presented By
R. K. GUPTA
MD & PO
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Taurus Asset Management Company Ltd
4/9/2015
EMERGENCE OF SHARIAH
INVESTMENT
T Muslims represent nearly a quarter of the world’s
population.
T Islamic Finance & Investment as an industry is evolving
and developing.
T Investor base for Shariah investment is becoming large
and product base is also improving.
T Market for Shariah compliant products is growing
resulting particularly, equity assets of Shariah Compliant
investors are increasing
T Therefore, demand for securities / products / schemes
that meet Shariah principles is growing.
T Shariah compliant indices are being launched in an
effort to attract more investors from India and abroad.
T Such indices attract those investors who want to buy
stocks without violating Islamic investment guidelines.
T In India also, such indices have been launched such as
BSE -TASIS Shariah 50, NSE – S&P CNX 500 Shariah
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4/9/2015
OPPORTUNITIES OF
SHARIAH INVESTMENT
TThe global Islamic asset management business ranges between $30
billion to $50 billion, which is a drop in the ocean compared with the
multi-trillion dollar conventional fund business. (Source:
arabnews.com)
TChanging political situation in America and European countries
and falling GDPs of Europe and North America have forced rich
Islamic investors from the Gulf countries to look for investment
opportunities in South East Asian countries, including India)
TIslamic finance in India, home to the world’s second-largest Muslim
population after Indonesia, is still in its infancy.
TEfforts should help channel socially-conscious investor’s savings of
more than $1 trillion in the coming years, including from the cashrich Gulf (Source: gulfnews.com)
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4/9/2015
GLOBAL ISLAMIC INVESTMENTS
TThe Dow Jones and FTSE have already established global Islamic indices.
TThe Dow Jones Composite Islamic Index with 2440 compliant companies and
over 70 country Islamic indices as of today enjoys wide spread marketing
acceptance.
TThe FTSE/SGX Asia Shariah 100 index provides more opportunities for
Islamic investors to invest in Asian market.
TThe S&P BRIC Shariah Index is designed to capture the largest and mostly
liquid stocks in Brazil, Russia, India and China that meet the criteria of Shariah
law.
TIn India, there are two Shariah Compliant Indices:
T By BSE – TASIS Shariah - 50
T By NSE – S&P CNX 500 Shariah
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4/9/2015
GLOBAL ISLAMIC INVESTMENTS
TNon Islamic investors have began to
show more interest in Islamic products.
TA new Islamic Asset class showing
immense potential in private equities.
TThere are more than 130 Islamic Equity
Funds managed by some of the world’s
top Fund Managers viz. Citibank,
Deutsche Bank, HSBC, Merrill Lynch,
UBS etc.
TThese Funds have brought modern
Fund Management techniques and the
world creation of inter price system to
the door step of Muslim investors.
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4/9/2015
CHOICE OF SHARIAH COMPLIANT
INVESTMENTS
MURABAHA
IJARA
• ‘Cost plus
financing’
• Funds acquire &
own assets
• Fund buys goods
& sells to 3rd party
at given price
• Profit from rental
income through
leasing
• Price = Cost +
Profit margin(Pre
decided)
• Leased item to be
used in Halal
manner
COMMODITIES
• Buying & selling
of Halal
commodities
• Istina’a – Buyer
pays upfront at
time of contract
• Bay al-salam –
Forward
contract where
Delivery
Price=Spot
price–Discount
owing to credit
risk
• Fund responsible
for management
of assets
EQUITY
• Investment in
common shares
of companies in
Halal business
• Companies also
screened on basis
of Shariah
Compliant
Accounting
principles
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4/9/2015
SHARIAH COMPLIANCE
INDIA SCENARIO
TShariah compliant investment in India is a recent concept to attract
Muslim investors, in particular.
TEquity based Shariah investment is the most popular product in
India.
TIndia has the second highest Muslim population in the world.
TAwareness has reached Muslims who are now ready to join the
main-stream.
TNumber of Shariah-compliant stocks in India are much higher than
many Muslim countries, thus providing large stock universe for
investment by Islamic investors.
TOut of 500 companies of BSE-500 28% of the companies are
Shariah compliant and the market capitalization of these Shariah
compliant companies is 38% of the total market cap.
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4/9/2015
WHY SHARIAH INVESTMENT
TDespite such huge and fledging stock market in India, parts of
Muslim population have not been able to participate
TDifferent aspects of their lives, including investments, are governed by
Shariah Laws
TOpening an avenue for the inclusion of Muslims at large in the Great
Indian Growth story
TShariah Investment is not essentially only for Muslim population but
for every person who has values and ethics.
TTM Shariah strategy is TAMCO’s unique socially responsible approach
for the benefit of interested HNI’s.
TTAMCO already has a Shariah compliant mutual fund scheme in the
market by the name of Taurus Ethical Fund for the benefit of retail
investors at large.
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4/9/2015
WHY SHARIAH INVESTMENT
The Shariah 50 has outperformed the SENSEX by nearly 25% and
the BSE 500 by over 30% over BSE’s back-test horizon - 1st Jan 08
to 22nd Dec 10. (Source: BSE)
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4/9/2015
SHARIAH VS CONVENTIONAL
INDICES PERFORMANCE
Returns
BSE TASIS
Shariah 50
Sensex
BSE 500
YTD (Jan-Dec 22, 2010)
18.16%
14.61%
13.77%
1 Yr (23-Dec-09 to 22-Dec-10)
21.59%
19.91%
18.20%
2 Yrs (23-Dec-08 to 22-Dec-10)
132.67%
101.60%
112.13%
Since start date (01-Jan-08)
22.77%
-1.40%
-10.12%
Volatility
(Annualized since 01-Jan-08)
BSE TASIS
Shariah 50
28.01%
Sensex
34.41%
BSE 500
32.97%
Over the back testing period, annualized volatility for the
Shariah 50 was also less than both SENSEX and the BSE
500 by nearly 5 percentage points. (Source: BSE)
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4/9/2015
WHY SHARIAH INVESTMENT
TFrom the graphs and return figures, it is pretty evident that Shariah 50
has been consistently able to outperform the Sensex as well as BSE-500.
TSimilar study was done on Indonesian stock market between
Jakarta Islamic Index and Jakarta Composite Index concluding that
Islamic index is more resilient towards crisis compare to
conventional stock index.
(Source: Dept. of Islamic Economic, Airlangga University, Indonesia)
TVarious empirical studies have suggested that the Shariah screening
process automatically reduces the risk of investment which is inline with
the nature of Islamic value of small uncertainty (Gharar shaghir)
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4/9/2015
SHARIAH INVESTMENT
IDENTIFICATION
TPMS would apply fundamental, technical & logical
analysis on the list to identify investment worthy stocks.
TNo investment would be made in T/Z category (illiquid)
shares.
TTAMCO’s Shariah-compliant list will be reviewed by
TASIS monthly to check for its conformity to the Shariah
principles.
TIn case any stock is removed from Shariah list and fund
has an investment in that stock, it will be given appropriate
time to sell that stock from the portfolio. So there won’t be
any distress selling.
TFree cash can be invested in gold ETFs only
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4/9/2015
PORTFOLIO BUILDING PROCESS
Bottom-up/ Topdown approach
Shariah Universe
Liquidity Analysis
Fundamental
Analysis
Market behavior
& Trend analysis
Logical Analysis
Technical Analysis
Shariah
Compliant
Portfolio
Information &
News analysis
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4/9/2015
A STEP FORWARD
TTAMCO has taken another step in this direction by offering
“TM Shariah Strategy” under its Portfolio Management
Services.
TAs such Indian Muslims have got another avenue to park their
investible income in “TM Shariah Strategy”, a Shariah
Compliant PMS product.
TMultigain, a leading Advisory & Broking Group in the area of
financial services has entered into an arrangement with TAMCO
as a sole marketing partner to market a specialized PMS product
– TM Shariah Strategy, a Shariah Compliant PMS Strategy.
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4/9/2015
TM SHARIAH STRATEGY
HIGHLIGHTS
TA Shariah Compliant PMS Strategy
TMinimum Investment Rs.25 lacs
TIndividuals, Sole Proprietorship Firms, Partnership Firms
Company/Body Corporates, Trusts Association of Pensions
NRIs/FIIs (subject to RBI approval) can invest.
TInvestment can be made only by cheque / draft or through
listed stocks.
TIndependent SEBI registered Custodian.
TPersonalized services both by TAMCO Relationship Manager
& officials of Multigain.
TRegular reporting.
TFacility of Tracking the Portfolio with User I.D & password.
TChoice of Discretionary and Non-Discretionary Portfolio.
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TRegular communication from TAMCO – PMS.
4/9/2015
NORMS FOR SHARIAH
COMPLIANCE
In terms of the present Shariah law, funds of the TM Shariah Strategy will not
be invested in the following areas:
T Fixed interest instruments
T Derivatives including but not limited to options, futures and contracts for difference.
T Banking and finance companies.
T Manufacture or distribution of alcohol products.
T Gambling and entertainment.
T The production, packaging or any other activities related to Pork or Pork products or
other non-halal meats.
T Equities or other securities issued by companies whose activities relate in any way to the
production or distribution of pornographic material.
T Investment trusts, unit trusts and other collective investment schemes that do not adhere
to Islamic Shariah investment principles.
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4/9/2015
SHARIAH COMPLIANCE BY TASIS
TThe monitoring and reviewing of Shariah Compliance of TM Shariah Strategy is done
by Taqwaa Advisory & Shariah Investment Solutions (P) Ltd (TASIS).
TThe portfolio of this strategy is to be monitored every month by TASIS officials to
conform its Shariah compliance.
TTASIS (Taqwaa Advisory & Shariah Investment Solutions) is India’s premiere Shariah
Advisory Firm which provides the services of stock screening, product structuring, Shariah
Monitoring and Shariah Certification in India.
TIt is a well known body for Shariah Advisory in India following are its feats:
•TASIS has become India’s first institution to become a member of Accounting and
Auditing Organization for Islamic Financial Institutions (AAOIFI)
•BSE and TASIS Launch Shariah-Compliant Index to Promote Financial Inclusion in
India.
•GIC (Re), a Government of India owned company, appoints TASIS for Shariah advisory.
TFor more details, visit www.tasis.in
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4/9/2015
THE INDEX
BSE TASIS SHARIAH 50
TLaunched by BSE and Taqwaa Advisory and
Shariah Investment Solutions (TASIS) in
December 2010
TThis Index consists of 50 largest and most
liquid Shariah compliant stocks within the BSE500.
TTASIS employs strict financial screening norms
which are more conservative than its peers.
TFirst Shariah compliant equity index which is
publically disseminated on a real-time basis.
TThe index constituent weights are capped at
8%.
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4/9/2015
ABOUT TAMCO
TSEBI approved Asset Management Company since 1993
TAt present, Investment Manager for various schemes of Taurus Mutual
Fund.
TThe present AUM of Taurus Mutual Fund is about Rs.26.99 Crs.
TTaurus Mutual Fund is also managing a Shariah compliant scheme called
Taurus Ethical Fund, India’s first such scheme approved by SEBI.
TIn the second Venture, TAMCO has started Portfolio Management
Services (PMS) after getting license from SEBI.
TThis is a Board run Company whose operations are also being
monitored by Board of Trustees comprising of eminent personality.
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4/9/2015
SERVICES OFFERED BY
TAMCO-PMS
At present, TAMCO PMS is offering following Investment strategies under
Discretionary Portfolio Management Services:
T Alpha Generator Strategy
T Focused PSU Strategy
T Wealth Building Strategy
T Arbitrage strategy
T TM Shariah Strategy
For more details visit
www.tamcopms.com
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4/9/2015
ABOUT MULTIGAIN
T “Multigain is an integrated financial services group, offering a wide range
of services to different clients, segments of the economy, includes EPF
Trusts, Corporate, high net-worth individuals and retail investors. Provide
all financial solutions under one umbrella.”
T Multigain is an ISO ISO 9001:2008 certified company working since
1994, having its own branches in Moradabad, Mumbai, Noida ,
Lucknow & in 15 different states with more than hundreds of employees,
Franchisees & Advisors across PAN India.
T Multigain has Membership with BSE, NSE, MCX’SX, USE, NSEL,
MCX, NCDEX, NMCE, ACE, ICEX and CDSL.
T Multigain started working early in the area of Shariah finance and
launched Multigain Shariah Investment Services (MSIS) in 2009
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4/9/2015
MULTIGAIN SHARIAH
INVESTMENT SERVICES PVT. LTD.
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Multigain Shariah Investment Services (MSIS) was launched in 2009 by its parent company
Multigain group. It is an independent vertical whose operations are separate from Multigain’s financial
services.
Multigain is India’s 1 st Shariah Compliant Commodity Broker in National Spot Exchange Ltd.
Multigain is India’s Largest Integrated Platform of Distributing & Broking of Shariah Base
Investment Products & Services.
The objective of Multigain Shariah Investment Services is to give an opportunity to those investors who
want to invest in accordance to the Shariah principles in ethically correct sectors. To learn more please
click this link: http://www.multigain.in/Shariah_Investment.pdf
Shariah Investment Solutions:
Equity Trading
Spot Commodity Trading
Portfolio Management Service
Mutual Fund & ETF
Wealth Management Services
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4/9/2015
SHARIAH PMS VS CONVENTIONAL
PMS
Shariah PMS
Conventional PMS
Hedging using derivatives not allowed
Hedging is allowed
Cash settled futures is prohibited
Cash settled in future is allowed
Investment in banks, insurance and any
company conducting non-Shariah business is
not allowed
Investment in banks, insurance companies,
etc. is allowed
Investment can’t be made in Interest bearing
instruments & securities. Free cash to be kept
in current account therefore returns could be
affected
Investment can be made in bonds, CP, CD,
and other interest bearing instruments to
reduce volatility
Shariah Audit to confirm that Shariah
principles are followed in making investments.
No special audit
Copy of Shariah Compliant Audit provided to
investors.
No specific compliance audit provided to
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4/9/2015
PMS VS INDIVIDUAL TRADING
PMS
Individual Trading
Professional Management of Portfolio involving overall
fundamental, technical & logical analysis
No professional Management of Portfolio
Focus and exclusivity of investment service
Lack of focus and exclusive time for investment decisions
Access to large amount of market information and news
with enough time margin to capitalize on it
Most of the news and information available only from
public domain which has lost effectiveness
Benefit of price averaging available
Averaging difficult on account of one time buying rather
than accumulation
Diversification benefits available owing to pooling of fund
Diversification lacking owing to limited funds
Higher reward to risk ratio
Lower reward to risk ratio
Proper accounting & reporting, easier for deducing tax Cumbersome accounting of profit & loss.
liability
Regular monitoring of portfolio on account of focused Regular monitoring of investment difficult due to
nature of service
paucity of time
Advisory service also available
No investment advice available. Investment mostly based
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on news available from various sources
4/9/2015
PMS VS MUTUAL FUND
PMS
Mutual Fund
Personalized investment objective
depending on ticket size of investment &
other factors
Common investment objective for all
investors irrespective of ticket size of
investment
Personalized service & customized
portfolio solutions
No personalized & customized service
Daily tracking of individual portfolio
available for investor
Portfolio details available only on monthly
basis
No SEBI restrictions in terms of
portfolio structure thus providing greater
flexibility for profit maximization
SEBI structure applicable on fund’s
portfolio
Profit sharing option available
No such option available
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4/9/2015
WHY TAMCO PMS
Broker backed PMS
TAMCO PMS
DP Service provider
Mostly their own therefore compromise
on quality of service can’t be ruled out
Outside agency which is a SEBI
approved custodian
Propriety trade
More interested so returns can be affected
Concept doesn’t exist
Access to research reps
Reps of other research houses mostly not
access
Reps of all research houses available
Trading style
Own terminals used so unnecessary
churning & high broking rates may
increase cost
Independent brokers empanelled with
competitive brokerage agreements
Staff
No separate team for PMS operations
thus lacking focus
Independent dedicated team for entire
gamut of PMS operations
Service quality
PMS one of the activity along with
secondary market transactions therefore
less personalized
Separate teams for PMS & Mutual Fund
therefore more personalized service
Portfolio disclosure
Normally not disclosed on regular basis
Viewing facility available online on
regular basis
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THE JOINT VENTURE
TTAMCO and Multigain have entered into an arrangement
whereby;
T TAMCO will be responsible for the Fund Management, Back office &
Accounting as per the SEBI’s guidelines.
T Multigain will be responsible for marketing of TM Shariah Strategy
through various channels, sub-brokers etc. both in India and abroad.
T TASIS will be responsible for the Shariah compliance of TM Shariah
Strategy
TRole and responsibility of the identities are well defined.
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4/9/2015
FOR ANY QUERY/INFORMATION,
CONTACT US
At TAMCO
Taurus Asset Management Co. Ltd.
UGF, Kanchenjunga Building,
18, Barakhamba Road, New Delhi 110 001
45382222, 23717593, 23738664
Fax : 23738664, E-mail :
queries@tamcopms.com
C M Mathur
Ph(Direct): 011-45382204
Mobile: +91 9810264642
email: mathur@tamcopms.com
At Multigain
Corporate Office
402, Vishal Chambers,Sector 18,
NOIDA 201301 (Delhi NCR)
Ph:(0120)4567735-38,4226383-84
Multigain Shariah Investment Services (P)
Ltd.
H-50, Lajpat Nagar
Moradabad 244 001
(0591) 2490400, 2490500
Mobile: +91-9917400021/+9128
9837037174
email :pms@multigain.in
Regional Office
Gala no.203,2nd Floor, Lok
center,Maroshi road,Marol,
Andheri (East) MUMBAI 59
Ph:(022)6725051
4/9/2015
RISK DISCLOSURE
TInvestments in Securities are subject to market and other risks and there is no assurance or guarantee that the objective of any of the portfolio will be
achieved.
TInvestors in the PMS Product are not being offered any guaranteed/assured returns.
TPast performance does not indicate the future performance of the portfolios of the Portfolio Manager.
TThe names of the portfolio strategies do not in any manner indicate their prospects or return.
TThe material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should be relied upon as
such.
TNeither Taurus Asset Management Co. Ltd. nor any person connected with it, accepts any liability arising from the use of this material. The recipient of
this material should rely on their investigations and take their own professional advice.
TDisclosure Document shall be obtained and read carefully before executing the PMS agreement and any time thereafter.
TFor tax consequences, each investor is advised to consult his/her own professional tax advisor.
TThis presentation is not for public distribution and has been furnished solely for information and must not be reproduced or redistributed to any other
person. Person into whose possession this document may come are required to observe these restrictions. No part of this material may be duplicated in
any form and/or redistributed with Taurus Asset Management Co. Ltd.’s prior written consent.
TDistribution Restrictions – This material should not be circulated in countries where restrictions exist on soliciting business from potential clients
residing in same countries.
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