The rules and requirements of Sharia principles mean that companies involved in certain activities will be filtered out of a Sharia-compliant fund, notably:
- Conventional finance (non-Islamic banking, finance and insurance, etc.)
- Pork-related products and non-halal food production, packaging and processing or connected activity
- Adult entertainment
- Weapons and defence
In addition, there are requirements surrounding the use of debt and interest-bearing assets. Islamic law prohibits the collection and payment of interest by lenders and investors. To earn money without charging interest, Islamic banks agree to participate in a certain amount of profit or loss the business generates.
There are also some generally accepted accounting restrictions in Sharia investing. Companies must maintain a debt to equity ratio less than 33%, which rules out businesses with high levels of borrowing and means a focus on more stable businesses. In addition, companies are only permitted to have less than 45% of accounts receivable as a percentage of debt to equity.
Our fees are stated on the monthly factsheet which can be found on the various model pages
Yes, similar to other socially responsible funds, within the enironmental, social and governance (ESG) universe, Sharia-compliant funds screen potential portfolio investments for specific requirements desired by followers of the Muslim religion
Our investment team follow a rigorous process when selecting funds for our portfolios, conducting extensive research into the universe of sharia-compliant investments. Ideally this includes one-on-one meetings with fund managers followed by detailed desk-based analysis looking further into the fund’s investment process, portfolio positioning and performance.
The firm will only select a fund that has proven to deliver on its sharia compliant mandate, adhering to the stringent and comprehensive investment process which screens stocks to ensure only companies with Sharia-compliant business or activities are included.
The level of diversification within our Sharia Portfolios is dependent on the availability of funds that are considered Sharia-compliant. Due to the strict nature of Sharia investments, the universe of compliant funds is limited, tending to give rise to higher weightings of up to 25% in each individual security
You can select an investment portfolio that most closely reflects their investment return objectives and attitude to risk. We offer five risk-graded portfolios that span the risk spectrum from more defensive, lower risk returns, through to higher risk, equity based investment returns as illustrated here
No, Invest Sharia investments are based on the principles as set out as above.
The funds are inclusive for all investors who wish to invest within the remit.
No, based on indices research has shown that Sharia led investments have tended to beat its traditional peers.
Part of the reasoning is at the screening stage we avoid investments whose debt could be deemed out of control (greater than 30%) and consequetnly the main shareholder is the bank and not the shareholder.