Muslim financial specialists Parsoli UK has introduced the Parsoli global Islamic equity fund.
The fund is an open-ended investment company and has been aimed at Muslim investors in the UK and Europe who are looking for a financial product that complies with Shariah.
Shariah means to be compliant with both Islamic law and the Koran, and as a result the fund will not invest in any companies that breach these laws and religious guidelines.
A company that complies with Shariah cannot have income that derives from pornography, the manufacture and distribution of alcohol, gaming or gambling, anything to do with pork, or any other banned meats, conventional banking or conventional assurance.
The fund will invest in between 40 and 60 global blue chip companies that comply with Shariah. The companies will be chosen by the Shariah supervisory board made up of Islamic scholars and Muslim legal experts. If any of the companies invested in makes any future investment changes so they have 5 per cent or less of its income from a non-Shariah source, part of this will be sent to a charity. The companies are still in the process of being chosen.
This is a unique product as it is the only UK-based Shariah fund at the moment. The concept itself is not new as there are another 105 existing Islamic mutual funds. However the majority of these are based in the Middle East with others in other Islamic areas such as Pakistan and Indonesia. With an estimated 2.5m Muslims in the UK, this product should be attractive to devout Muslims who want to invest but who have been put off by not wanting to break Shariah.