• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Republica Press

Your Business & Political News Source

REPUBLICA PRESS
Your Business & Political News Source

  • Home
  • BUSINESS
  • MONEY
  • POLITICS
  • REAL ESTATE
  • SCIENCE/TECH
  • US
  • WORLD

Faith-Based Investing Makes Up Ground in Gains and Convenience

by

One is to avoid any investment prohibited by Islam, which includes banks, insurance, tobacco, alcohol and pornography. But Mr. Salam said he also looked at the companies themselves. So he can invest in Islamic banks, for instance, or in beverage makers like Monster, which may have been excluded under a broad screen.

He said he also looked for companies that did not have excessive debt, because debt is acceptable only in cases of necessity. He steers away from companies that are cash rich, because there is a prohibition on trading in them when more than 45 percent of their balance sheet is in cash. While a portfolio with Apple holds lots of cash, it is not enough to violate the prohibition, but it is a number the fund monitors.

He also screens companies that have a small portion of their earnings in forbidden revenue, like an airline that sells alcohol. In that case, the fund will look to see if the company gets less than 5 percent of its revenue from something that is prohibited.

“In an ideal world, we’d be buying something that is 100 percent compliant, but that’s just not possible,” Mr. Salam said.

To add diversification, Saturna has recently added the Islamic equivalent of a fixed-income fund, which invests in the market for sukuk, which are bondlike instruments. Instead of earning interest on the bonds, investors receive a lease payment from the sukuk. For example, if an airline like Emirates needs a new plane, it can borrow the money from the sukuk market and the obligation is structured as a lease of that plane to the sukuk.

Saturna’s oldest fund, the Amana Income Fund, has a five-year return of 13 percent, compared with more than 17 percent for the S&P 500. But the Amana Growth Fund has a five-year return of 21 percent. The sukuk fund has just hit its five-year benchmark, returning just over 3 percent.

“The difference between Islamic and non-Islamic investors is not in what they’re looking for but in what products are available to them,” Mr. Salam said.

View Source

Filed Under: BUSINESS Tagged With: Apple, Apple Inc, Content Type: Service, earnings, Income, Insurance, Investing, Islam, Money, Muslims and Islam, Pornography, Religion and Belief, Roman Catholic Church, Stocks and Bonds

Primary Sidebar

More to See

Southern Baptists to Release List of Ministers Accused of Sexual Abuse

Leaders in the Southern Baptist Convention announced Tuesday that they were preparing to release a secretly maintained list of hundreds of ministers … [Read More...] about Southern Baptists to Release List of Ministers Accused of Sexual Abuse

You May Be Ready for Summer, but Is Your Home?

The change of seasons offers an opportunity to make changes of your own — not just in the way you dress, but in the way you dress the rooms you live … [Read More...] about You May Be Ready for Summer, but Is Your Home?

Stained Glass in a $1.5M Converted Church in St. Louis Is Simply Divine

It’s a property that offers a unique open floor plan—plus a hot tub with a view.“It was a Methodist church located in a historic little area of St. … [Read More...] about Stained Glass in a $1.5M Converted Church in St. Louis Is Simply Divine

Copyright © 2022 · Republica Press · Log in · As an Amazon Associate we earn from qualifying purchases.

Terms and Conditions - Privacy Policy