Ebtihaj's Encyclopedia of Economics Wiki
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Shariah law is the Muslim or Islamic law which regulates many aspect of a Muslim’s life including the type of investments allowed. For instance, interests are considered usury according to the Riba rule therefore bonds are prohibited to investors following the Sharia law. A Shariah compliant fund is an investment vehicle fund structured in accordance to Shariah rules. Shariah funds can be managed as mutual funds, ETF’s or hedge funds. They are in essence common funds with an extra layer of ethical rules integrated in the investment polices of the fund not dissimilar to SRI’s. While the funds are required to be fully compliant with Shariah rule, the companies structuring, managing and promoting the funds do not have to be necessarily Shariah compliant.



Topics Under Islamic Economics[]

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