POSTED BY March 7, 2014 7:39 pm COMMENTS (7)
ONHi
I’m posting this query on behalf of my friend Rehan who is looking for ethical mutual funds to invest, as he belongs to islamic community. Can somebody please suggest any such good funds or SIPs which can give good gain, he is planning to invest 50K per year.
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Dear Hvishal, please look deeper into the companies. The matter is not as simple as you are thinking. As per my basic understanding, earning as well as paying interest is HARAAM in Islam. Now all of these companies are either earning interest on their deposits or paying interest to loan or own depositors. If this is OK to your friend, I’m not at all having any problem.
Thanks
Ashal
he can go with the ETFs which tracks Shariyah index. one example could be : Goldman Sachs CNX Nifty Shariah Index Exchange Traded Scheme
Thanks Syamantak. How to find which funds follow shariah principles – may be as a single list available under one page, just asking as I do not have much insight into MFs,
Dear Hvishal, Can I discuss this issue on a detailed scale?
First check the portfolio of TATA fund here.
http://www.valueresearchonline.com/funds/portfoliovr.asp?schemecode=977
Now it’s Taurus.
http://www.valueresearchonline.com/funds/portfoliovr.asp?schemecode=10244
Now from the portfolio of these 2 funds, can you guarantee that the companies where your friends’ money is going to be invested are following the Shariah principles?
Think for a while.
Thanks
Ashal
Hi Ashal
Thanks for suggesting these funds, I believe as the stocks of all companies under these funds belong to IT, construction, engineering, FMCG and automobile, their money will not be invested in any unethical activities. What is that you’re trying to convey please help. Any other suggestions for him, as he really wants invest money but not able to do it due to these principles. I’ve suggested him to go for FDs as alternative option for now.
Tata Ethical Fund (G)
Taurus Ethical Fund (D)
Please ask your friend to understand performance of these funds before investing. I am no expert on islam hence will not be able to suggest a portfolio that goes with his belief.
A choice of fund will depend on goals and time horizon associated with it.
Hi Divya
Thanks for your comments, how do we get to know the returns on these funds in last 1 year and 5 years to understand potential gains. Any useful links to understand this would be very useful. My friend is willing to invest money for at least 5 years and can extend it based on the returns, he has plans to invest around 50K per year.