U.S. fund manager plans Islamic ETF in Q1 2010

KUALA LUMPUR Oct 5 (Reuters) - U.S. fund manager Florentez Investment plans to launch an Islamic exchange traded fund next year, broadening the limited choice of sharia assets available in the world's top economy, its chief executive said on Monday.

The fund, which is awaiting regulatory approval, will track the FTSE Sharia USA Index .FTSWUSA which measures the performance of large and mid-cap Islamic stocks, Florentez CEO Saeid Hamedanchi said.

It will target investors in the United States, Southeast Asia and Gulf Cooperation Council countries and will likely be launched in the first quarter of 2010, Hamedanchi said.

"The markets in the Islamic world and in the United States are underserved," he told Reuters by telephone.

The FTSE Sharia USA Index is up about 13 percent so far this year, compared with an 8 percent increase for the Dow Jones industrial average .DJI.

Investment adviser Javelin Investment Management launched the first U.S.-listed Islamic exchange traded fund in July, which tracks the Dow Jones Islamic Market International Titans 100 index, measuring the performance of 100 top Islamic ex-U.S. stocks.

The U.S. Islamic finance market has struggled to grow, with many Middle East investors reluctant to bring their investments to U.S. financial markets after the Sept 11, 2001 attacks, to avoid being labelled as terrorist financiers.

North America has a Muslim population of 8 million with an average household income of $53,500 compared with the national average of $42,000, Hamedanchi said quoting estimates by Zogby International.

Florentez is owned by Hamedanchi, an ex-Islamic Development Bank investment officer and James Altenbach, a former research analyst. (Click on [ID:nISLAMIC] for more Islamic finance stories and ISLAMIC for a speed guide) (Reporting by Liau Y-Sing; Editing by Tomasz Janowski)