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Sharia Investments

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Shariah Investments & Ethical Investing

At first glance, Shariah investments can appear to be quite complex. These assets contain various rules and limitations based on the Islamic faith that governs over all aspects of Muslim life.

These principles state that for any financial service or institution to be considered halaal, their products must adhere to these specific values of social responsibility set out in the Quran. These values speak to transparency, fairness, and accountability.

We are here to help you understand more about the importance of Shariah investments and ethical investing, what options are available to you, and how we can help.

Shariah Investments: An Introduction

Money being saved in box

The Kagiso Islamic High Yield Fund is just one example of an Islamic investment fund that is Shariah-compliant. This fund provides both capital stability and ethical transparency at moderate levels of risk. It also gives much-needed variety to today’s available range of Islamic finance products.

Shariah-compliant investment is different from conventional investment funds. In your traditional investment fund, investors expect to accrue interest over some time, however, in Islamic investments, interest (‘Riba’) is prohibited.

Instead, customers and banks invest and share in profits equally. The risk is shared and thus the impact is lessened, which makes these funds far less volatile than your ordinary investment fund.

It’s important, as an Islamic and Muslim investor, to make use of Shariah-compliant companies when establishing your Shariah portfolio. These companies must adhere to the standards set out by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). This body ensures that Islamic investment products maintain Shariah values across all their financial services.

Contact us to find out how you can ensure Shariah compliance throughout all your investments.

Shariah Investments: Importance

prayer and meditation from top

As this industry continues to grow and develop, it becomes vital to share with all of our clients the value and benefits of Shariah investments. In recent times, these funds have gained popularity with other groups outside of the Muslim faith. This is because of a recent surge in the demand for ethical products.

Groups of all faiths, and non-faiths alike, share similar values with Muslim investors when it comes to seeking socially responsible investment solutions, which adhere to environmental, social, and governance (ESG) criteria.

This is what makes Shariah-compliant investing appealing for Muslim investment and beyond. It’s not only beneficial to the Muslim community, but also the rest of the modern world as it caters to these shifts in moral codes and spiritual values.

This is why ethical investing is becoming more prevalent and sought after. Ethical investments provide investors with the ability to generate profits from their invested funds while still ensuring that their moral compass is pointing in the right direction!

Shariah Investments: Requirements

man's hand on trowel gardening

For a fund to be considered Shariah-compliant, it must adhere to the rules set out by the AAOIFI (as guided by the Islamic faith). This organisation helps to ensure the ‘standardisation and harmonisation of international Islamic finance’. It is a guiding body that tries to create uniformity across all Islamic financial sectors.

Within each investment organisation, there must exist a Shariah Supervisory Board, which directs and monitors all Shariah-compliant funds. This ensures financial products are lawful for Muslim consumers.

These boards and regulators allow investors from the Islamic faith to better screen potential new investment opportunities, ensuring these match the rules of their faith.

Shariah Investing: Restrictions

Abundance of treats and desserts

The Shariah supervisory boards and regulators also regulate financial product restrictions and allowances.

Products are not considered Shariah-compliant if they derive majority income from: 

  • Alcohol, tobacco, and pork
  • Production of weapons of mass destruction
  • Conventional financial services and leisure/media
  • Pornography and gambling

Shariah-compliant products include:

  • Equity funds
  • Real estate funds
  • Commodity funds
  • Bonds

The restrictions are wide-ranging and subtle in some cases. As a result, the lines can blur between what is considered Shariah-compliant and what is not. 

It can be a confusing experience to try and navigate Shariah compliance and Islamic investment products alone. As a Shariah-compliant company, our financial advisors are highly knowledgeable about Shariah investing. We can assist you to secure the right funds for your ethical requirements.

Please do not hesitate to get in touch to find out about Shariah investments and ethical investing.

+27 11 839 2302

info@maysure.za.com

900 491 Maysure Financial Services

Maysure Financial Services: Company Profile

Since 2003 the founders of Maysure Financial Services have believed that life happens – whether we plan it, don’t plan it, save for it, don’t save for it, expect it, or don’t expect it…. It happens. But how your life has happened doesn’t dictate how it must be lived. It is simply a journey that you are on, and everything that you have experienced along the way has brought you to this point, and dictates the road you will take from here on out.

Whether you are at the beginning of your journey, or a long way down the path, a specialised team will help you set a firm financial focus and guide you as your journey continues, specifically when it comes to your retirement and estate planning.

Should you be of the Muslim faith, you will have access to a dedicated Muslim team that understand that your earnings must always remain wholesome and pure, this team will guide you with your Sharia Investments and estate planning so as ensure that your journey is sustained and nourished by that which is Halaal.

We believe that your savings are the first step on your journey to your future – we apply expert, large scale, corporate savings principals to your investments, whilst still maintaining the personal, hands on approach of a small firm.

Maysure Financial Services is built on 3 solid propositions:

Serving you – we want to show you how to take your existing wealth and with some uniquely adapted and personalised guidance, turn it into the ground where your future takes root, the ground where you can start saving towards your dreams, passions and goals.

Services that are adapted to your circumstances – they are inspired by your life. The financial service instruments that we offer are as varied as your journey, and your circumstances will determine which services we will offer you to ensure that your unique financial goals are reached.

An understanding of that which is most important to you – Planning your future financial security should not be taken lightly. Our intention is to make your journey one that ends in financial independence, especially because the path is can be so strongly determined by simple consistency. With the right amount of experience, a firm grasp of the latest technology and a personal, hands on approach, our goal is for you hold the key to financial freedom.

SERVICES

When we are inspired by life to make choices that benefit ourselves and our families, it can be very daunting. This is where Maysure’s expert team steps in.

Our range of financial planning services include:

Retirement Planning
We all dream of being able to spend our time as we choose to. It may seem like an inconceivable notion, but effective retirement planning is exactly that – The process of setting retirement income goals and making the decision to do whatever is necessary to achieve them, in order to live your best life.
Effective retirement planning is essential to ensure that you accumulate the necessary funds necessary to give you financial freedom when you no longer enjoy the advantage of receiving a salary.

Sharia investments and estate planning
Sharia law acts as a code for living that all Muslims should adhere to, and this applies to investments and estate planning too. All earnings are to remain wholesome and pure, and no investments should be used for “sin” industries such as alcohol, tobacco, pornography as well as what can be considered unethical industries such as gambling, arms and weaponry.
Being secure in the knowledge that your investments are Halaal and pure is essential to ensure peace of mind; allowing you to graciously reap the rewards of what you have sown.

Investments – Unit Trusts, Endowments and Tax Free
You can empower yourself greatly by understanding the tax on your savings. Different tax structures apply to different investments and knowing exactly what you have and what you’re going to gain is an integral part of financial planning.
Understanding your investment portfolio is essential to ensure that you really are getting the most bang for your bucks.

Life Cover
Life happens, whether we plan for it or not. Having sufficient life cover ensures that the legacy of love that you leave behind for your family is not tainted by financial worries. Life cover can be reinvested to provide your family with an income and also used to cover any outstanding debt that you may have accumulated.
Ensuring the financial freedom of those you love in the event of your death is essential to ensure that they will not be burdened by financial strain and live the life that envisioned for them.

Medical Aid
Life is a precious gift and a well constructed medical aid ensures that you are able to pay for any treatment expenses incurred with regards to your health and wellbeing, on both a day to day basis and an emergency contingent.
Comprehensive medical aid is essential to ensure that you will not be burdened with debilitating medical bills should you fall ill.

Estate Planning
Your estate is comprised of everything that you own – your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions etc. Estate planning is ensuring that your asset base is managed in the event of your incapacitation or death in an appropriate and financially savvy way.
Estate planning is essential to protect your loved ones, because without a plan in place, there could be a long-lasting negative impact on their future.

Offshore Investing
Offshore Investing allows you to spread your investment risk across different economies and regions. It also gives you access to industries and companies that may not be available locally.
Being strategic with your offshore investment is essential to allow you to make adjustments to your investment portfolio to accommodate the ebb and flow of well performing international markets and maximise your returns.

Fiduciary Services
Being in the position to leave a legacy is a wonderful gift, but it is also a complex one that must be thought through carefully. Fiduciary services help you preserve, grow and distribute your wealth the way you want, both during your lifetime and the lifetimes of your loved ones.
With a thorough fiduciary plan comes financial peace of mind, allowing you to focus on the important things in life – living it the best way you can.

We pride ourselves on a providing a personalised service because we are a small, tight knit team; but our investment tactics and guidance are based on solid corporate principals that are applied across the board, no matter the size of the portfolio.