aryan2007
BANNED
- Joined
- Nov 14, 2007
- Messages
- 428
- Reaction score
- 0
When 28-year-old Sayeed Musthafa, a graphic artist from Central Mumbai, received his first dividend payout from an infrastructure fund he had invested into last year, Akthar Quereshi, his buddy-next-door (and his investment guru) advised him to set aside a small portion for charity.
Akthar contended that the fund in which Sayeed had invested into was managed by an asset management company attached to a prominent bank and that the dividend Sayeed got would have some impurities. Being a true Muslim, you shouldnt accept money derived out of interest gained. Since you are not sure as to how much money is earned by way of interest in your dividend, pay out a small percentage of your dividend as charity to the local yateemkhana (orphanage). This way you will get rid of the impurities in your earnings, said Akthar.
The growth of sectoral funds, equity funds and index funds has opened up a world of investment opportunities for devout Muslims with a preference for Shariah investments. And if fund managers are to be believed, Muslim investors have begun investing into cent-percent equity funds and sectoral funds.
Muslim investors are investing into pure equity funds and sectoral funds (mainly infrastructure funds). As far as I know, the recently-launched energy funds are also witnessing a good number of Muslim investors. Index funds and growth funds are equally popular with Muslim investors, said a leading fund manager.
All the more certain is the fact that independent financial advisors are selling sectoral funds (energy and infrastructure, in particular) as Shariah funds. A print media advertisement put out by a financial advisor (supporting a recently-launched energy fund) read, Follow the Sheikhs footsteps of ethical-investing in Shariah funds.
Only Tata Infrastructure Fund passes our Shariah screening test as far as funds go. Not that we dont advise our clients against investing in normal funds, but we tell them that their investment universe as a whole is not Shariah compliant. If you look at the stock profile, a normal fund usually contain 8-10% impure investments (due to their exposure to non-Shariah assets). In such cases, we advise investors of these funds to give out 8-10% of their returns in charity, said Parsoli Investments managing director Zafar Sareshwala.
Shariah, the canonical law of Muslims, has strictures regarding financial and commercial activities permitted for believers. Arab investors only invest in a portfolio of clean stocks. They do not invest in assets which are directly or indirectly relate to alcohol, conventional financial services (banking and insurance), entertainment (cinemas and hotels), tobacco, pork, defence and weapons. According to experts in Islamic investments, Muslims are only allowed to invest in companies where interest bearing income is less than 10% in any condition. As far as we know, except for Tata Select Equity Fund, all mutual fund schemes have exposure to debt and overnight call money markets. Investing in interest-related assets is against Shariah principles. We advise our clients to only invest in the Tata fund, said Idafa Investments managing director Ashraf Mohammadi.
Muslim investors own up equity, sectoral funds- Analysis-News & Views-Markets-The Economic Times
Akthar contended that the fund in which Sayeed had invested into was managed by an asset management company attached to a prominent bank and that the dividend Sayeed got would have some impurities. Being a true Muslim, you shouldnt accept money derived out of interest gained. Since you are not sure as to how much money is earned by way of interest in your dividend, pay out a small percentage of your dividend as charity to the local yateemkhana (orphanage). This way you will get rid of the impurities in your earnings, said Akthar.
The growth of sectoral funds, equity funds and index funds has opened up a world of investment opportunities for devout Muslims with a preference for Shariah investments. And if fund managers are to be believed, Muslim investors have begun investing into cent-percent equity funds and sectoral funds.
Muslim investors are investing into pure equity funds and sectoral funds (mainly infrastructure funds). As far as I know, the recently-launched energy funds are also witnessing a good number of Muslim investors. Index funds and growth funds are equally popular with Muslim investors, said a leading fund manager.
All the more certain is the fact that independent financial advisors are selling sectoral funds (energy and infrastructure, in particular) as Shariah funds. A print media advertisement put out by a financial advisor (supporting a recently-launched energy fund) read, Follow the Sheikhs footsteps of ethical-investing in Shariah funds.
Only Tata Infrastructure Fund passes our Shariah screening test as far as funds go. Not that we dont advise our clients against investing in normal funds, but we tell them that their investment universe as a whole is not Shariah compliant. If you look at the stock profile, a normal fund usually contain 8-10% impure investments (due to their exposure to non-Shariah assets). In such cases, we advise investors of these funds to give out 8-10% of their returns in charity, said Parsoli Investments managing director Zafar Sareshwala.
Shariah, the canonical law of Muslims, has strictures regarding financial and commercial activities permitted for believers. Arab investors only invest in a portfolio of clean stocks. They do not invest in assets which are directly or indirectly relate to alcohol, conventional financial services (banking and insurance), entertainment (cinemas and hotels), tobacco, pork, defence and weapons. According to experts in Islamic investments, Muslims are only allowed to invest in companies where interest bearing income is less than 10% in any condition. As far as we know, except for Tata Select Equity Fund, all mutual fund schemes have exposure to debt and overnight call money markets. Investing in interest-related assets is against Shariah principles. We advise our clients to only invest in the Tata fund, said Idafa Investments managing director Ashraf Mohammadi.
Muslim investors own up equity, sectoral funds- Analysis-News & Views-Markets-The Economic Times
