June 01, 2007 at 8:12 am by Tom Lydon
The new Shariah indexes increase the opportunity for faith based exchange traded funds (ETFs). Joanne Von Alroth of Investor’s Business Daily explains it is easy to throw money behind a company, however, it’s difficult to know if the company conducts business in a way that is true to your faith. Last week, the S&P rolled out the S&P BRIC Shariah Index and the FTSE Bursa Malaysia Hijrah Shariah Index. This brings the total number of Shariah-compliant indexes to 30. All indexes are screened by Ratings Intelligence Partners, a London/Kuwait based investment company specializing in the Islamic investment market, and a Shariah advisory board.
Shariah requires strict rules be followed in the way a Muslim follower lives life and the manner in which commerce is conducted. Businesses involved in advertising or the media are strictly prohibited. Other areas banned include alcohol, gambling, pork, conventional financial services, tobacco, pornography, gold or silver trade. In the Muslim faith, profit from lending money or property rental income is immoral; one must rely on equity and profit to make money.
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