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Sharia law - Coggle Diagram
Sharia law
Restrictions
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Instead of borrowing and lending, Islamic finance relies on the concepts of sharing ownership of assets
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Anything which is connected to the production or sale of alcohol, including pubs and restaurants, pork products, gambling or adult entertainment orientated are not allowed to be included in a fund portfolio
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Ijarah
These types of fund will invest in a physical asset (property, vehicles or equipment) and generates profits by leasing them in return for rent
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Legal frmework within which the public and some private aspects of life are regulated for those living in a legal system based on Islam
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A Sharia compliant fund is an investment fund vehicle which has been specifically structured to comply with Sharia rules
Sharia funds can be managed as mutual funds, ETFs or hedge funds
Like a standard fund but with an extra layer of Islamic rules integrated in the investment policies of the fund
While the fund themselves are required to be fully compliant with Sharia rules, the companies which manage or promote the funds do not always have to be Sharia compliant