I need your help regarding investing in “Islamic Mutual Funds”. As it is well known that depositing money in National Savings Scheme or Defense Savings is not considered halal . While reading on Dr Khalid Zaheer Sb, Website, I came across his suggestion to his readers of considering investing in Islamic Mutual Funds as an alternative – whose returns are Riba-free and are much higher compared to savings scheme.
I am quite naive to financial terms and material, therefore I am requesting you to please give your opinion about these funds as such run by Atlas Asset Management http://www.atlasfunds.com.pk, Al Meezan Investment etc.
Do you think it is worth to invest in these Islamic Funds ?
Assalam o alaikum wa Rahmatullah
How are you? How is the life going on? Any update on your studies?
Investment in Islamic Mutual Funds is allowed if they are not investing your money in any riba-based company. You need to check the details of each plan. If they are investing in Halal businesses and not on interest bases, it is permissible. The details of their investments should be available in their financial statements. (See their balance sheet item “Investment” and then go for the explanatory note.)
From the perspective of its worth, I cannot comment as I have no experience in investing in them. You should get advice from some investors who have already used these funds. Compare them with other permissible options available to you. As they are in Pakistani Rupees, therefore, rate of return must be more than the inflation in Pakistan otherwise you’ll be losing your money. Check inflation rate on some government website and multiply it to 1.5 or 2 to get the estimate of real inflation. If these mutual funds are offering you more than that, it is worthy to invest in them.
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