Products January 7, 2009

SSA Rolls Out Retire Online Campaign

Social Security Commissioner Michael Astrue and Patty Duke yesterday unveiled Social Security's new online retirement application and launched the agency's Retire Online campaign.
Reported by

Featuring cousins Patty and Cathy Lane from the hit 1960’s sitcom, The Patty Duke Show, the campaign has been developed to “let Americans know that it’s now easier than ever to retire online.”

“Social Security’s new online retirement application can be completed in as little as 15 minutes from the comfort of your home or office,” Astrue said. “Filing online means there’s no need to drive to a local Social Security office or wait for an appointment with a Social Security representative. I’m thrilled that Patty Duke has volunteered to help us promote retiring online.”

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“Like millions of other Baby Boomers, I like to spend time with my grandchildren, travel or just relax with a good book. And I love the convenience of doing things online,” Duke said. “Social Security has made applying for retirement benefits online easier than ever before.”

To apply, go to www.socialsecurity.gov and click on “Applying Online for Retirement Benefits.”

To see a demonstration of Social Security’s online retirement application and to view the new public service announcements featuring Patty Duke as cousins Patty and Cathy Lane, go to www.socialsecurity.gov/pattyduke.

 

The Markets January 6, 2009

Shariah-Compliant Fund Growth May Be Overstated: Cerulli

Current assets in Shariah-compliant investments may be more modest than cited by many regulators and industry players, according to a new analysis.
Reported by
The Cerulli report, Shariah Investing: Market Sizing and Analysis, estimates that at the end of third-quarter 2008, total mutual funds and discretionary assets under management hit $65 billion – a figure that the report’s authors note is “…well below the hundreds of billions often associated with this market.”
Shariah-compliant investments generally undergo sector and accounting-based screens that exclude businesses that offer products and services which are considered unacceptable or non-compliant according to Shariah-law, such as advertising and media, alcohol, financials, gambling, pork, pornography, tobacco, and the trading of gold and silver as cash on a deferred basis.
According to a press release, Cerulli Associates notes that although the number of Shariah-compliant mutual funds has doubled in the last three years, these are offered mainly by domestic managers. Saudi Arabia is currently the largest domestic market for Shariah investments, but Malaysia has the largest number of registered mutual funds. Cerulli combined data from private and public sources with proprietary surveys of international and domestic Shariah managers to arrive at its estimate.
Lingering Concerns
The report notes that the majority of large international managers are yet to launch a Shariah-compliant mutual fund due to several concerns, including:
  • costs,
  • the discrepancy in Shariah standards, and
  • the lack of third-party distribution
Even though Cerulli notes that a growing number manage discretionary mandates for high-net-worth individuals and family offices.
“Nevertheless, assets in discretionary Shariah-compliant portfolios will continue to lag the retail market unless and until some large institutions, in particular the Middle East-based sovereign wealth funds, decide to invest in accordance with Shariah principles. To do so, these institutions must be convinced that performance will not be compromised,” states Shiv Taneja, Managing Director and head of Cerulli’s international research practice, in the release.
Various Islamic indices suggest that Shariah equity investments have performed on par with their conventional counterparts, but have not escaped the recent market turmoil, while sukuk (bond) products are still rare due to the illiquidity and scarcity of the underlying securities, according to Cerulli. “As a result, assets in Shariah-compliant funds, despite having increased by 8% year over year as of September 2008, will likely end the year close to or below the 2007 level,” Cerulli says.
However, Cerulli expects that once markets stabilize, this industry can continue to expand at above 10% per annum, driven by the large amount of Islamic bank deposits, new products and asset classes, and increased regulatory support from governments, such as that introduced to great effect in Malaysia.

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