IslamicFinance.de

A shariah-compliant unit trust fund is a collective investment scheme that requires all investments in the fund to adhere to Islamic law or shariah requirements. These requirements are underpinned by Islam’s prohibition on charging interest and the avoidance of companies with more than 30% debt or investments that engage in activities that are deemed to cause social harm, for example gambling, alcohol and weapons manufacturing. Sharia-compliant equity unit trusts typically invest in equities that comply with the above requirements. In addition, sharia-compliant balanced funds provide a shariah-compliant retirement or pension fund investment that invests in shariah-compliant equities as well as sukuks. Most shariah-compliant equity and balanced funds invest in both local and global equities.