Investing according to Islamic principles can offer many benefits to Muslims and non-Muslims alike. Halal investing encourages a disciplined investment process that promotes in-depth security research and monitoring. Generally, the low debt requirements of Islamic screens facilitate a conservative approach that appeals to risk-averse investors.

Because Islamic principles preclude the use of interest-paying investments, halal cash reserves cannot be invested in traditional money market funds or deposited in an interest-earning bank account and therefore do not earn income.

Shariah Compliant Mutual Funds are a type of socially responsible investing based on the Shariah or Shariat law of Muslim religion. These mutual funds adhere to the Shariah law which is a moral code of Islam.

Halal investing requires investment decisions to be made in accordance with Islamic principles. As a faith-based approach to investment management, investors often consider halal investing to be a category of ethical or socially responsible investing.

Halal Fund is an open ended naira based mutual fund designed to meet the investment needs of investors seeking long-term income generation through Shari’ah compliant investments. The Fund invests broadly in a diversified portfolio of asset backed investments such as Sovereign Sukuk, Corporate Sukuk, Ijarah (Lease), Murabaha (Cost plus mark-up), Musharaka (Partnership) and Mudarabah (Working Partner) contracts.

Sukuk Investments: Like Bonds, But Halal

Sukuk investment certificates are similar to bonds, but they are not debt-based and thus halal. Islamic principles discourage debt in general; interest payments on debt owed are viewed as usury, exploitative of the debtor, and are thus prohibited (haram). Islamic principles therefore prohibit investment in conventional bonds and other debt securities that generate interest income. Sukuk investments are halal because they seek to generate profit from the investment income of their underlying assets, instead of interest and principal payments. On the surface, sukuk may appear similar to bonds: They have maturities; they may be rated by major credit rating agencies, such as S&P or Moody’s; and they generate regular investment income payments, similar to the coupon payments from conventional bonds. So, what makes sukuk investments halal? They must meet the following CORE Criteria.

https://blog.investa.ng/what-is-halal-funds/

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