Element Investment Managers is the smallest of South Africa's six halal fund houses and, on one measure that matters a lot to strict investors, the most transparent. The Cape Town boutique publishes downloadable Shariah compliance certificates for each of its three Islamic funds directly on its website, a habit that Camissa, 27four and Sygnia, all far larger in halal assets, have not matched. Whether that transparency justifies its fees is the question this review answers.
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A genuine pioneer record
Element's innovations outweigh its size. In May 2006 it became the first South African investment manager to sign the UN Principles for Responsible Investment, and it has run activist corporate engagement ever since, making it the only SA halal manager with a documented stewardship record layered over its screens. Its Islamic Equity Fund launched in February 2006, among the oldest halal equity funds in the country. It co-founded the first SA institutional Islamic balanced fund that satisfied both Regulation 28 and Shariah requirements, the structural template every halal retirement annuity now relies on. And it was the first SA manager to structure a Murabaha sukuk cash product, with Nedbank, attacking the defensive-asset problem years before sovereign rand sukuk existed.
The three funds
- Element SCI Islamic Equity Fund (February 2006, 1.88% TER): actively managed general equity with a shareholder-engagement overlay, benchmarked against Shariah general equity peers.
- Element SCI Islamic Balanced Fund (April 2010, about R98 million, 1.46% TER): the only genuinely flexible halal balanced mandate in SA retail, able to take equity anywhere from 0% to 75% under Regulation 28. No other retail halal balanced fund can take equity to zero, which matters to capital-preservation investors who distrust fixed allocations.
- Element SCI Islamic Global Equity Fund (October 2012): the offshore option, with small retail assets.
The funds live on the Sanlam Collective Investments platform and are available fractionally through EasyEquities.
Governance built for verification
The Shari'ah Supervisory Board pairs external Darul Uloom Zakariyya scholars, Mufti Mohammed Ali (Chairman) and Mufti Ahmed Suliman, with an internal member, Mufti Yusuf Suliman, who is a Certified Shariah Advisor and Auditor (CSAA, AAOIFI) and Head of Markaz Al Noor. That internal CSAA function means day-to-day compliance is checked by someone with formal AAOIFI audit certification, and the output is public: certificates for each fund, downloadable before you invest a rand. Among SA managers only Old Mutual Albaraka exceeds this assurance posture, by adding a fully external audit.
The economics, stated plainly
Boutique scale is the case against. Roughly R98 million in the Balanced Fund is subsistence size in unit trust economics, and it shows in the pricing: 1.88% on Islamic Equity and 1.46% on Islamic Balanced against Camissa's 1.04% flagships. The book is concentrated (about 59% of Balanced Fund assets in the top ten holdings), distribution is thin, and small teams carry key-person risk that bigger houses diversify away. Element has no multi-decade outperformance story with which to defend the premium the way Oasis does; what it has is conviction, certificates and activism.
The stewardship angle, taken seriously
One argument for Element deserves more space than it usually gets. Shariah screening is a passive ethical filter: it removes prohibited businesses and walks away. Stewardship is the active complement, using shareholder rights to push the companies you do own toward better behaviour, and Element is the only SA halal manager with a two-decade documented record of it, dating to that 2006 UN PRI signature. For investors who read Islamic finance's purpose as more than avoidance, a manager that votes, engages and escalates is doing something the cheaper alternatives structurally do not. Whether that is worth 40 to 80 basis points a year over Camissa is a values judgment, not an arithmetic one; the honest framing is that you are funding an engagement programme alongside your returns.
How to use Element in practice
- As a satellite: a 10% to 20% allocation alongside a cheaper core (Camissa, Old Mutual Albaraka or the Satrix ETF) buys the certificates, the flexibility and the stewardship without paying boutique fees on the whole portfolio.
- As the defensive-flexible sleeve: the Balanced Fund's 0% to 75% equity range is the only retail halal mandate that can genuinely de-risk in a crisis, which suits investors who want a manager empowered to act rather than bound to a fixed allocation.
- Via EasyEquities for small amounts, or through the Sanlam platform at standard minimums for larger ones; check which share class your route accesses before comparing fees.
Verdict
Rated A for investing on our Halal Money Index, where its published-certificate culture scores exactly as it should. Element is a deliberate choice, not a default: pick it because you value verifiable compliance, stewardship and the market's only flexible-mandate halal balanced fund, and size it as a satellite around a cheaper core. Mainstream retirement money will find deeper, cheaper homes at Camissa or Old Mutual Albaraka; the conscience of the sector earns its slot anyway. Full details on the Element provider page and the investing page.
Quick answers
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Where do I find Element's Shariah certificates?
On the Element website, downloadable per fund before you invest a rand, backed by an internal AAOIFI-certified auditor (Mufti Yusuf Suliman, CSAA) alongside the external Darul Uloom Zakariyya scholars. Among SA managers only Old Mutual Albaraka's externally audited stack exceeds this assurance posture.