Welcome to Crescent Wealth’s regular COVID-19 Analysis. As Australia’s only Islamic Finance Superannuation Fund our investment analysts provide unique insight from our position of positive investment.
Crescent Wealth’s leadership is committed to proactive, open and transparent communication with our members and key stakeholders in the market. We recognise COVID-19 has created significant concern among our members and the broader community and in response have initiated these regular member and market briefings.
Our superannuation fund follows Islamic finance principles which along with prohibiting investment in unethical and unsustainable industries (alcohol, tobacco, weapons, pornography, pork and gambling) means we also don’t invest in debt or interest-earning investments.
While taking a long-term view of superannuation investment is not unique, our focus on investment in the concrete assets (property, infrastructure, healthcare, utilities, manufacturing, natural resources and innovative industries) benefits both our members, the economy and community, particularly in volatile times.
Islamic finance gained significant attention in times of financial disruption – including the GFC – due to its conservative approach, high cash holdings and strong positioning during market sell-offs.
In an exclusive member webinar last week, Crescent’ Wealth’s Chief Investment Officer, Jason Hazell and Managing Director, Talal Yassine OAM briefed members on the volatility in the market and our response from this unique perspective.
- COVID-19 represents a significant and unprecedented disruption in our community and markets. While we can draw on lessons from the 1929 and 1987 downturns and more recent GFC, there is no blueprint for the current crisis. What we can do is to use our significant insight and expertise to manage our fund in the best interest of our members. What we can’t do is speculate with any certainty regarding when the market has bottomed or the depth and length of the downturn.
- Superannuation is a long-term investment that spans decades. Our investment strategy is also designed to be long term and accommodate the fluctuations in the market. This means we plan for and respond to market volatility vs react.
- Our strategy is aligned to Islamic finance principals which promote long-term and sustainable investment. This means we invest in real assets that contribute to the development of our economy and society like property, infrastructure, healthcare, utilities, technology, manufacturing and resources. We don’t invest in vices or interest earned through debt – including banks.
- This conservative investment approach also means we have high holdings in cash in our investment options, at a rate of 48% in the conservative option, 29% in the balanced option and 12% growth option.
- In 2019 we believed the market was expensive and overvalued and took action at that point to de-risk our funds away from Australian stocks to more secure investments.
- While we are not immune to the downturn, we have outperformed both our peers and the market as a result of this strategy.
For our members:
- We encourage consideration of your superannuation as a long-term investment that will fluctuate with the markets.
- Our strategy is a long-term strategy aligned with Islamic finance principles and inherently conservative. Our team are monitoring and adjusting our investments daily to ensure the best possible performance in the market.
- We encourage you to gain independent advice related to your specific circumstances including accessing the ATO and My Gov pages related to superannuation.
- We are committed to proactive, open and transparent communication with our members and encourage you to join our regular COVID-19 webinars or contact us through (add channels).
- We encourage you to prioritise your family, friends and community at this time and to take care of yourself.
For the market:
- We encourage all investors to consider the long-term sustainability of their investments. Beyond the immediate crisis, consideration of how our investment strategies contribute to the long-term and constructive development of our economy, society and infrastructure.
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Talal currently serves as a Non-Executive Director on the Whitlam Institute and Western Sydney University Foundation Council Board. He also serves as Chairman of First Quay Capital and Chairman of the Australian Arab Dialogue. Talal has also served on the Australia Post, Board of Sydney Ports, Macquarie University and the Western Sydney Area Health Service and the Chairman of the Department of Foreign Affairs and Trade; Council of Australia Arab Relations. In an executive capacity, Talal spent 10 years at PwC as a director and strategist, and at investment firm Babcock & Brown in the Corporate Finance Group and later in the Technical Real Estate Division. Later Talal held leadership positions in Better Place Australia, Platinum Hearing and Star Transport Australia.