The little-known Amana Income Fund has been performing beautifully this year, reports Carolyn Cui of the Wall Street Journal. If there were an Islamic exchange traded fund (ETF), it would be doing well, too. That’s because the Amana fund adheres to the principles of Islamic law, which prohibits investing in institutions that charge interest and carry a lot of debt. That includes banks and financial institutions which we all know by now are in dire straits these days.
If there were an Islamic ETF, it would be adhering to similar principles and beating the S&P 500 as a result. Of the largest sectors in the S&P 500, financials have faired the worst. So, by default, an ETF that sticks to Islamic beliefs would perform nicely.
With this good news, it shouldn’t be long before we see an Islamic ETF is on the horizon.
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