DWS Noor Precious Metals

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Brief information: DWS Noor Precious Metals Securities Fund is a FCP incorporated in Ireland. The Fund’s objective is to achieve capital appreciation in the medium to long term. The Fund will invest in a portfolio of Sharia compliant equity and equity-related securities of companies engaged in activities related to gold, silver, platinum or other precious metals or minerals.

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Introduction to Deutsche Noor Precious Metal SGD

Deutsche Noor Precious Metal SGD is an investment product that allows you to invest in precious metals, such as gold, silver, platinum, and palladium, in Singapore dollars (SGD). Deutsche Asset Management, a well-known financial institution, offers it.

What are you investing in?

You’ve decided to invest in a specific investment fund based in Ireland. The Central Bank regulates this fund and follows the UCITS rules, which are investor protection guidelines. In Singapore, there are different types of shares available for you to choose from: Class USD LC, USD IC, and SGD LC. These shares are for capitalizing your investment, meaning any profits the fund makes will be reinvested rather than distributed as cash payouts to investors.

What are the key risks of this investment?

 The value of the Fund and the income from the Shares may rise or fall. You should consider the risks of investing in the Fund, including risks associated with equity markets, exchange rates, credit, liquidity, volatility, political and legal risks, and other risks. You may lose some or all of your investment. 

How do you grow your money by investing in Deutsche Noor Precious Metal SGD?

Investing in Deutsche Noor Precious Metal SGD allows you to participate in the performance and potential growth of the precious metals market. Precious metals have historically been valuable and sought after for various reasons, including their industrial use, store of value, and as a hedge against inflation and economic uncertainties.

By investing in Deutsche Noor Precious Metal SGD, you can diversify your investment portfolio and potentially benefit from the long-term appreciation of precious metals. The product is designed to provide you with a convenient and accessible way to invest in these metals, especially if you prefer to invest in SGD-denominated assets.

What makes Deutsche Noor Precious Metal SGD Shariah Compliant?

Business Activity Screening

Sharia investment principles do not allow investment in companies which are directly active in or derive more than 5% of their revenue (cumulatively)2 from the following activities (“prohibited activities”): 

• Alcohol
• Adult Entertainment
• Cinema
• Conventional Financial Services1
• Defense / Weapons
• Gambling / Casino
• Hotels
• Music
• Online Dating2
• Pork related products
• Tobacco

For Financial  Screening

Sharia investment principles do not allow investment in companies deriving significant income from interest or companies that have excessive leverage. MSCI uses the following three financial ratios to screen for these companies:

• Total debt over total assets
  33.33% 30.00%
• Sum of cash and interest-bearing securities over total assets
  33.33% 30.00%
• Sum of accounts receivables and cash over total assets
  33.33% 30.00%

The R225 FPIL DWS Noor Precious Metals Securities fund over one year is 0.82%, indicating a modest positive return. However, the fund has experienced a negative return of -13.94% over three years, indicating a significant loss. 

The Islamic Equity – Other fund has shown a positive return of 4.51% over one year, indicating good performance. Over three years, it has a slightly negative return of -0.12%.

Analysis of Deutsche Noor Precious Metal SGD:

• Annualised Standard Deviation Conclusion of Deutsche Noor Precious Metal SGD: 

Think of this as a “roller coaster rating.” A higher number means the ride has more ups and downs, making it potentially riskier but also possibly more rewarding. A standard deviation of 26.50% over one year indicates that Deutsche Noor Precious Metal SGD has experienced significant fluctuations in its returns during that period, implying a higher level of volatility.

• Sharpe Ratio Conclusion of Deutsche Noor Precious Metal SGD:

This ratio measures how much reward you’re getting for each unit of risk. The higher the number, the better the risk-reward trade-off. Lower values indicate that the investment may not be worth the risks involved.

The Sharpe Ratio of 0.09% for Deutsche Noor Precious Metal SGD over one year suggests a relatively low risk-adjusted return for the investment. It indicates that the investment has generated a small positive return compared to the level of risk taken.

Is Franklin Shariah Global Sukuk Fund regulated?

Yes, Deutsche Noor Precious Metal SGD is regulated by being listed on the Central Bank. 

Conclusion

Deutsche Noor Precious Metal SGD has shown a mixed performance based on the trailing returns. Over one year, it has generated a small positive return of 0.82%, indicating a modest gain. However, the investment has experienced a negative return of -13.94% over three years, resulting in a loss for investors.

In addition to the trailing returns, it’s worth noting that the investment has displayed significant volatility with a standard deviation of 26.50% over one year. This implies a higher level of risk and potential for more significant price swings.

Considering the relatively low risk-adjusted return indicated by the Sharpe Ratio of 0.09% over one year, the negative return over the three years, and the substantial volatility, investors should carefully evaluate the risk and return characteristics of Deutsche Noor Precious Metal SGD. It is recommended to conduct further research, consider investment goals and risk tolerance, and seek advice from a financial advisor before making investment decisions.