Ethical Funds

Shariah-compliant mutual funds

Ethical funds that comply with Shariah laws are known as Shariah-compliant funds or Islamic funds. These funds follow principles based on Islamic finance and do not invest in companies involved in prohibited activities such as alcohol, tobacco, gambling, or weapons. They also avoid companies with high levels of debt or those involved in interest-based transactions.

In India, some of the Shariah-compliant funds include Tata Ethical Fund, SBI Shariah Equity Fund, IDBI Shariah Fund, and Invesco India Shariah Equity Fund. These funds invest in companies that comply with Shariah laws and follow ethical and socially responsible business practices.

The investment process of Shariah-compliant funds is guided by a board of Islamic scholars, who ensure that the investment decisions are in compliance with Shariah laws. The scholars review the fund’s investments on a regular basis to ensure that they remain in compliance with Islamic finance principles.

Overall, Shariah-compliant funds offer investors an opportunity to invest in companies that align with their values and beliefs, while also complying with the principles of Islamic finance.

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