About Islamic Investments
For years now, ethical investing has achieved popularity among morally minded investors. Since the ethical standards used to choose investments could be as broad ranging as individuals’ values and beliefs, there have been a myriad of investment vehicles created to address the need or desire to invest ethically. However, there appeared to be few investment vehicles based primarily on religious precepts available to the broad public. Muslims were in a dilemma - where could they invest within Islamic guidelines without RIBA while saving tax by contributing to their RRSP or Tax-Free Savings Account or saving for their child's education to get the 20% grant, etc. Since 1995, Jeff (Jaafer) Gareau has been the Advisor that hundreds of Muslim families have trusted across the country from Nova Scotia to British Columbia. For people with less than $250,000 to invest, it was difficult to diversify their portfolios while maintaining strict Islamic investment guidelines but that all changed with the first Islamic Mutual Fund in Canada in the summer of 1999 (SAMI Fund). All Islamic Mutual Funds are based on very similar criteria as devised by the original (see below) and present Scholars of the Dow Jones Islamic Market Index:
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Investments must be halal - A company cannot be involved in the business of:
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Tobacco
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Weapons and defense
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Alcohol-related consumer products
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Pork-related products and businesses
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Entertainment (e.g. casinos, pornography)
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Usury and interest-generating activity
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- Financial criteria*:
- Total Debt / Market Cap < 33%
- Accounts Receivable / Total Assets < 45%
- Cash + Interest Bearing Securities / Market
Cap < 33%
* Based on the interpretation of the Quran and other Islamic texts, Sharia’ah scholars have set forth these guidelines to ensure that companies are not significantly exposed to leverage, and do not derive significant profits from interest-generating activities.
- Stock selection:
- Zaigham Shah, selects the best screened stocks (based on Islamic criteria) using a conservative style that preserves capital and invests prudently.
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Shaykh
Dr. Abdul Sattar Abu Ghuddah (Syria) -
Shaykh Justice Muhammad Taqi Usmani (Pakistan)
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Shaykh Nizam Yaquby (Bahrain)
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Shaykh Dr. Mohamed A. Elgari (Saudi Arabia)
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Dr. Mohd Daud Baker (Malaysia]
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Shaykh Yusuf Talal DeLorenzo (United States)
Internationally Renowned Islamic Scholars
The DJIM Shari`ah Supervisory Board was established to counsel Dow Jones Indexes on matters relating to the Shari`ahh compliance of the indexes' eligible components. Members of the Dow Jones Islamic Market Indexes Shari`ah Supervisory Board are:
Shaykh Abdul Sattar Abu Ghuddah
Dr. Abu Ghuddah is a senior Shari`ah Advisor to Albaraka
Investment Co. of Saudi Arabia. He holds a PhD in
Islamic Law. Dr. Abu Ghuddah has published many books
on Islamic Financial transactions. He was an advisor
for Islamic Law Encyclopeadia (Kuwait Awqaf Ministry).
Dr. Abu Ghuddah is a member and chairman of seeral
reputed Islamic Shari`ah Boards.
Mr. Usmani has been a member of the Supreme Court of Pakistan since 1982. He is also the vice president of Darul Uloom Karachi and the vice chair and deputy chairman of the Islamic Fiqh Academy (OIC), Jeddah. Mr. Usmani edits the monthly magazines Albalagh and Albalagh International. He is a chairman or member of the Shari`ah supervisory boards of a dozen Islamic banks and financial institutions worldwide.
Shaykh Nizam Yaquby
Mr. Yaquby is a member of the Islamic supervisory
boards for several Islamic institutions, including
the Arab Islamic Bank and the Abu Dhabi Islamic Bank.
His work has appeared in the following publications:
Risalah Fi al-Tawbah, Qurrat al-'Ainayn fi Fada il
Birr al-Walidayn, Irshad al-'Uqala'ila Hukun al-Qira'h
min al-Mushaf fi al-Salah, Tahqia al-Amal fi Ikhraj
Zakat al-Fitr bi al-Mal.
Shaykh Dr. Mohamed A. Elgari
Dr. Elgari is an associate professor of Islamic Economics
and the director of the Center for Research in Islamic
Economics at King Abdulaziz University in Saudi Arabia.
He is an expert at the Islamic Jurisprudence Academy
(OIC), Economics. He is also an advisor to several
Islamic financial instituitons worldwide and the author
of many books on Islamic banking.
Shaykh Yusuf Talal DeLorenzo
Mr. DeLorenzo is considered a leading Islamic scholar
in the United States. He has translated over twenty
books from Arabic, Persian, and Urdu for publication
in English and has been commissioned to prepare a
new translation of the Qur`an. Mr. DeLorenzo compiled
the first English translation of legal rulings issued
by Shari`ah supervisory boards on the operations of
Islamic banks. since 1989, Mr. DeLorenzo has served
as secretary of the Figh Council of North America.
He is also a Shari`ah consultant to several Islamic
financial institutions and was an advisor on Islamic
education to the government of Pakistan.
Shaykh Dr. Mohd Daud Baker
Dr. Baker is currently a member of the Shari`ah Advisory
Council of many financial institutions in Malaysia
and around the world, including the Central Bank of
Malaysia, Securities Commission of Malaysia, International
Islamic Financial Market in Bahrain, Accounting and
Auditing Organization for Islamic Financial Institutions
in Bahrain and HSBC (Malaysia).