Element Investment Managers Element SCI Islamic Equity Fund

Element Investment Managers is a Cape Town boutique whose identity was forged in responsible investment before ESG became an industry: in May 2006 it became the first South African investment manager to sign the UN Principles for Responsible Investment, and it has run constructive corporate engagement on environmental, social and governance issues ever since. Its Islamic franchise began in the same era, with the Element Islamic Equity Fund launching in February 2006, making it one of the oldest halal equity funds in the country alongside the Oasis pioneers.

The firm's innovation record outweighs its size. Element co-founded the first South African institutional Islamic balanced fund that satisfied both Regulation 28 and Shariah requirements, the structure that now underpins every halal retirement annuity in the country; its own retail Islamic Balanced Fund followed in April 2010. It was also the first SA manager to structure a Murabaha sukuk cash product, in conjunction with Nedbank, tackling the defensive-asset problem years before sovereign rand sukuk existed. An Islamic Global Equity Fund was added in October 2012 for offshore exposure (retail assets in it remain small).

Shariah governance is a genuine strength relative to size. The Shari'ah Supervisory Board comprises Mufti Mohammed Ali (Chairman, Senior Lecturer at Darul Uloom Zakariyya), Mufti Ahmed Suliman (also Darul Uloom Zakariyya, and a scholar who appears across several SA Islamic finance boards) and Mufti Yusuf Suliman, an internal member who is a Certified Shariah Advisor and Auditor (CSAA, AAOIFI) and Head of Markaz Al Noor. The internal CSAA function means day-to-day compliance is checked by someone with formal AAOIFI audit certification, and the results are published: Element posts downloadable Shariah compliance certificates for each of its three Islamic funds on its Shari'ah unit trusts page, transparency that Camissa and 27four do not match on their public sites.

The critical case is economic. Boutique assets (about R97.9 million in the Islamic Balanced Fund per Morningstar) mean fixed costs spread across a small base: the Islamic Equity Fund's 1.88% TER and the Balanced Fund's 1.46% price the range at the expensive end of SA halal investing, above Camissa's 1.04% flagships and Old Mutual Albaraka's B1 classes, without the multi-decade published outperformance story Oasis uses to defend its premium. Distribution is correspondingly thin: the funds live on the Sanlam Collective Investments platform and EasyEquities rather than a broad direct franchise. Element is therefore best used deliberately, by investors who are paying for stewardship, certificates and boutique conviction, rather than by default.