Investing In Islamic Funds: A Practitioner's Perspective

Helpful Hints

• More than 700 Islamic funds offered in over 75 countries cover a broad spectrum of various asset classes with the ability to satisfy the diverse range of investors’ appetites.
• The Shariah equity indices Dow Jones Islamic Markets, S&P Indices, FTSE, MSCI, and Russell have established a transparent stock screening process that is regularly reviewed.
• There is wider acceptability of Islamic equity funds, now that a transparent and credible five-year investment performance track record has been established since 2007.
• Global Sukuk funds, which are denominated in an international currency like the dollar or the euro, are now available on offshore funds platforms.
• As of March 28, 2011, there were 13 Islamic ETFs with total assets under management of USD382 million.
• Shariah-compliant REITs do not invest in properties that involve nonpermissible activities. For example, casinos whose main revenue source comes from gambling would not be allowed. In the case of a hotel, if alcoholic beverage sales total more than 25 percent of revenues, then it is also not eligible for investment.
• While leveraging positions are not allowed, Shariah compliant hedge funds can be developed under the guidance of Shariah scholars based on certain Islamic contracts.
• International investors can select from 26 Islamic UCITS funds, which are available on the Luxembourg and Dublin international fund platforms.
• Disagreement among Shariah scholars signals a flight toward quality and refinement and not ...