Schroders has launched a Shariah-compliant Islamic Global Equity Fund.

The fund will invest in a range of investments around the world and will aim to outperform the Dow Jones Islamic Market World Index over a three to five year period.

The fund, which has an ongoing charge of 0.55%, will be managed by the Schroders Systematic Investments (SSI) unit which will screen 2,600 potential Shariah-compliant stocks.

It will use multi-factor investing which builds up a detailed picture of investments over time.

The company says it believes Shariah-compliant investors have so far been underserved by the market.

Doug Abbott, head of UK intermediary at Schroders said: “We worked closely with an external Shariah advisor to develop this fund and it has also been certified by an independent external Shariah Supervisory Board.

“The fund maintains features such as dividend income purification, whereby any dividend income deemed non-Shariah compliant is donated to charity.

“We recognise that Shariah-compliant investors have been underserved by the market and we are delighted to leverage our long-standing investment expertise to address this gap.

Ashley Lester, head of Schroders Systematic Investments and lead manager of the fund, said:  “Multi-factor investing relies on scientific expertise, and therefore our mission for investors is to deliver an approach to factors that is scientific, forward-thinking and evolving as our knowledge progresses.

“I am confident that the SSI team’s extensive expertise in creating differentiated and diversified factor portfolios will help us unlock additional sources of return for investors looking for a Shariah-compliant fund solution.”