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All you need to know about Shariah-compliant Mutual Funds

August 8, 2019 . Ranganayaki R

Are you someone who is particular about your investments being in ethical sectors or companies? If your answer is yes, Shariah-compliant Mutual Funds are the ones for you. Read on. 

Shariah-compliant Mutual Funds:

Shariah-compliant Mutual Funds are those that adhere to the Shariah Law. It is a moral code and a religious law of Islam. The following are its key features:

  • It forbids investments in businesses that make a major portion of its income by selling alcohol, tobacco, pork, weapons and other military equipment, gambling, and pornography
  • It prohibits all forms of interests. An appointed Shariah board avoids such forbidden sources of income by distributing it to charity
  • Immoderate levels of risks are avoided. Derivatives and companies with high debts are not included
  • It avoids investment in fixed-income instruments
  • These funds are not confined only to the followers of Islam

FundsIndia offers two Sharia-compliant Mutual Funds, Tata Ethical Fund and Taurus Ethical Fund.

Tata Ethical Fund:

Tata Ethical Fund is ideal for investors looking to invest in a diversified equity fund without Banking & Finance exposure. It is suitable for those who are seeking*:

  • Long Term Capital Appreciation
  • Investment predominantly in equity & equity related instruments of Shariah principles compliant companies and in other instruments allowed under Shariah principles

The fund manager is Mr.Rupesh Patel. To know more about this fund, click here

Taurus Ethical Fund:

Taurus Ethical Fund will primarily invest in Equity and Equity related instruments. It is suitable for those who are seeking*:

  • Long Term Capital Appreciation
  • Investment in equity & equity related instruments based on the principles of Shariah

This fund manager is Mr.Prasanna Pathak. To know more about this fund, click here

If you are still wary of the risk factor, contact an advisor and get your doubts clarified.

*Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

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