Standard Life offers sharia-compliant fund

New and existing pensions customers at Standard Life will soon be able to invest in a fund that is compliant with Islamic laws on finance.

The insurer is adding HSBC's sharia-compliant fund to its pension range from May 30. It will be available to investors who have any of the insurer's Sigma range of pensions.

The HSBC Life Amanah pension fund is a pooled fund investing in the largest 100 companies engaged in sharia-compliant activities. The fund tracks the Dow Jones Islamic Market Titans index, which avoids companies whose primary activity involves alcohol, tobacco, pork-related products, weapons and defence, or entertainment.

Under Islamic law, lending money to charge interest and make a profit is forbidden, so the shares of conventional financial services companies are also excluded from the fund.

The fund was launched in April 2004 and is part of HSBC's Amanah finance range. Currently 10,000 companies offer the fund to their staff through stakeholder schemes.

Standard Life said it had seen growing demand for a sharia-compliant fund.

Iain McLeod, marketing manager, savings & investment, Standard Life, said: "As the UK population becomes more diverse it is important to recognise different needs and this new fund will open new savings opportunities for over 1.8 million Muslims in the UK alone. "

In February this year, Lloyds TSB entered the Islamic finance with a sharia-compliant current account. It has since launched a compliant home finance scheme, as an alternative to traditional mortgage schemes which are non-compliant because they charge interest. However, HSBC's pension fund remains the only one on the market.