This article will discuss one of the popular halal investments among Muslims. Mutual funds are an excellent method to invest and diversify your portfolio by investing in a variety of securities. However, you want to know what they are, how to invest in them, and which ones are halal.
Understanding The Mutual Funds
A mutual fund is a form of financial vehicle that invests in securities such as stocks, bonds, money market instruments, and other assets by pooling money from many investors. Furthermore, professional money managers manage mutual funds, distribute assets and attempt to generate capital gains or income for the investors’ fund. The portfolio of a mutual fund is built and managed to meet the investment objectives indicated in the prospectus. In addition, annual fees (known as cost ratios) and, in some cases, commissions are charged by mutual funds, which can affect their overall results.
Mutual funds provide access to professionally managed portfolios of shares, bonds, and other securities to small and individual investors. As a result, each stakeholder shares in the fund’s gains and losses proportionally.
Are they Halal?
Many equity funds are not halal. Fortunately, there are funds available for Muslim investors. Therefore you can invest in them without worrying if they are halal.
A sharia-compliant fund is one that complies with all of Shariah law’s requirements as well as the principles of Islamic finance. The equities they hold determine whether or not they are halal. Obviously, those who created the Islamic fund would have done the sharia screening for you. Halal investment, mutual funds are excellent ways to make investments.
List of the Halal Funds
The following is a list of the sharia-compliant funds according to Islamic Finance Guru
- HSBC Islamic Global Equity Index (Mainly Developed Markets Stocks Mutual Fund)
- Schroders Islamic Global Equity Fund (Mainly Developed Markets Stocks Mutual Fund)
- ISWD/ ISDW (Developed Markets ETF)
- ISUS (US Markets Stocks ETF)
- ISDE (Emerging Markets Stocks ETF)
- AMAP AMAL (Mainly Developed Markets ETF)
- BNP Paribas Islamic Hilal Income (Sukuk Fixed Income)
- SGLP SGLD (Gold)
- Oasis Crescent – has a number of stocks, Sukuk fixed income and property funds.
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