Halal Investing is Now a Reality
(PRWEB UK) 3 March 2016
Islamic Investments, which has its new office in London, has been managing Islamic and conventional funds for more than 13 years, and operating within Europe for more than ten. The company said the Islamic investment market in the UK is currently “Over £1bn” but has the “potential to be between £120bn and £160bn".
John Ashwin, Marketing executive of Islamic Investments UK said: “The UK is a major global financial centre and is fast establishing itself as a leading Islamic finance centre in Europe. “The UK has a vast supply of financial services skills, a world class infrastructure, and a sound regulatory and compliance system. Regarding the product legislation; the available product structures, especially the tax-incentivised savings products, fit in with our wealth management philosophy.” All Islamic Investments funds will be available to UK investors directly. These include equity, property, income, and life-staging asset allocation balanced funds.
In ever-increasing numbers, UK investors have started looking beyond the bottom line on their investments to the ethics and impact of the underlying companies that drive their returns. Many British have implemented responsible investing plans that mirror their personal ethical or religious values. Sharia Compliant Investing (also known as Shariah Compliant or Halal Investing) is a subset of Socially Responsible and Ethical Investing based on investments that adhere to Islamic principals (Sharia).
Sharia Compliant/Halal Investing and Socially Responsible Investing (SRI) both look deep into the companies held in a portfolio or a fund, to evaluate their social, political or environmental impact. While most people associate this type of discipline with environmental concerns, a responsible investor may avoid companies which do business in countries with questionable human rights records, or have corporate governance policies that are not in line with the investor's morals. Companies that produce certain products may also be rejected. Addictive products and services, such as tobacco, alcohol, or gambling are eliminated.
Sharia Compliant or Halal Investing is Socially Responsible in its avoidance of particular products and industries, but its adherence to Islamic Law extends to avoiding interest-bearing or highly-leveraged vehicles. The complexities of many investment vehicles, combined with the vast scope of many large companies, make it difficult to ascertain whether an investment is compliant without the help of a qualified advisor.
Islamic Investments: A Good Idea in a Perfect World?
In its early days, SRI and other restricted strategies such as Shariah Compliant or Halal Investments came under fire for being a good idea in a perfect world, but naysayers predicted poor returns for such portfolios. Worries about limited investment choices affecting the diversity of one's portfolio, combined with the biased notion that irresponsible operations are automatically more profitable, led to predictions of poor returns for this style of investing.
Fortunately, that dire prediction has not come true. Cultural and political shifts continue to drive companies towards ethical and socially responsible practices. The increasing popularity of responsible investing itself may be changing companies' behaviour as they strive to maintain a solid base of investors. These changes, and consumer demand for ethical investment options, mean that the responsible investor has far greater choice than ever before, and a highly competitive portfolio can be a reality. The empirical evidence is starting to pile up; Socially Responsible and Sharia Compliant Investing can generate returns as good, or better, as traditional approaches. In fact, as regulations and legislation progress, companies who practice Social Responsibility may prove to have the jump on their competitors.
While Sharia Compliant and Halal Investing is the perfect solution for anyone conscious about the source of their investment returns, assembling a well-diversified compliant portfolio can be a challenge, as complex investment vehicles may conceal non-compliant practices, and any company held in a portfolio must be fully assessed so that aspects of the company's business dealings are accounted for. Investors who wish to pursue a Sharia Compliant or Halal strategy should work with an experienced advisor with advanced knowledge of Islam and Shariah restrictions.
We Specialize in Halal Investments and Sharia Compliant Investing
Non compliant investments are filtered based on both industry as well as financial ratios. Companies predominantly involved in industries associated with alcohol, entertainment, financial services, pork, tobacco, or gambling are eliminated. Financial ratios are also used to establish compliance with Shariah Law, including those of debt, cash & equivalents, and account receivables, each in relation to a company's market capitalization. Ratios beyond a third signal non compliance.
We would be happy to talk to you regardless of your situation, on how we can help you invest while strictly adhering to Sharia Compliant investment values and guidelines.
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Islamic Investments UK - An Investment Strategy Aligned With Your Values