Shariah-Compliant Funds

There’s an investment out there for everyone, even those who want to support Shariah law.

Shariah-compliant funds are investment funds that follow the rules of Shariah law, a religious law that is a key part of Islamic tradition. You’ll find them alongside other socially responsible funds in the ESG (environmental, social, and governance) sphere.

Catering to Muslim rules of religion in finance is...a challenge for Western modern thinkers. Global Islamic assets are over $70 billion (i.e. not all Islamac assets, just those that stay away from oil, and donate interest profits), a 50% increase in under ten years. Still, it’s hard to know the true number of Shariah-compliant funds since they’re sprinkled around.

So...what exactly does a Shariah-compliant fund look like? For one, no profiting off of vices like alcohol, gambling, or porn. Second, no profiting off of pork, weapons, or military equipment. Shariah-compliant funds will be headed by a Shariah board, audited to Shariah law standards.

Certain types of income, like interest, aren’t allowed...so that goes to charity. Check out the Amana Growth Fund (AMAGX) to see a Shariah-compliant fund in action.