14 Jan 09 Islamic Mutual Funds - An Overview

I’ve conducted some very brief searches.  Below is a list of Islamic funds.  I have no knowledge of their performance or ethical practices. I will soon assess each fund in greater detail and compare it to market indexes and sharia compliance, though all of them are available through most major brokerages. For now, one thing to note is that there does not appear to be many types of funds like these to begin with. The only funds in this group that have received five star ratings from Morningstar are the Amana Funds. This should not be construed as an endorsement or positive outlook for future performance, as much more research needs to be conducted on these funds. The following is a brief summary of each. Additionally, if there are Islamic funds that I did not include in this list, please share it in the comments.

Edit: I find it thoroughly amusing that Azzad Fund’s description specifically cites weapons of mass destruction as one of the items it does not invest in, as though weapons in general are somehow okay. I’ll have to ask them about it.

Amana Income (AMANX)

Nicholas Kaiser / Asset Manager

The investment seeks current income and preservation of capital. The fund invests only in equity securities, including foreign securities. Investment decisions are made in accordance with Islamic principals. It diversifies investments across industries and companies, and generally follows a value investment style. The fund purchases only dividend-paying companies, which are expected to have more stable stock prices.

Minimum investments
Initial	$250
Additional	$25
IRA Initial	$100
AIP Initial	$100
AIP Additional	$25

Amana Trust Growth (AMAGX)

Nicholas Kaiser / Asset Manager

The investment seeks long-term capital growth. The fund invests only in equity securities, including foreign securities. Investment decisions are made in accordance with Islamic principals. It diversifies investments across industries and companies, and generally follows a value investment style. The fund favors mid-sized and smaller companies expected to grow earnings and stock prices faster than the economy.

Minimum investments
Initial	$250
Additional	$25
IRA Initial	$100
AIP Initial	$100
AIP Additional	$25

Iman Fund (IMANX)

Bassam Osman / Asset Manager

The investment seeks growth of capital while adhering to Islamic principles. The fund normally invests at least 80% of net assets in domestic and foreign securities chosen by the fund’s investment advisor that meet Islamic principles. Among the securities that meet Islamic principles, the investment advisor determines a security’s attractiveness for purchase based on a number of factors, including its anticipated value and record of earnings growth, among other things.

Minimum investments
Initial	$250
Additional	$50
IRA Initial	$100
AIP Initial	$100
AIP Additional	$50

Azzad Ethical Mid Cap (ADJEX)

Jamal Elbarmil / Asset Manager

The investment seeks to provide long-term total returns that, after expenses, match or exceed the annualized performance of the Standard & Poor’s Midcap 400 index. The fund primarily invests in equity securities of mid-cap companies. It also may invest in equity securities of domestic and international companies of any market capitalization. The fund avoids companies with significant revenue from tobacco, alcohol, meat products, gambling, pornography, interest, insurance, and weapons of mass destruction, also banks or financial services companies. It may invest in foreign securities and acceptable fixed income bank deposits or securities. It is non-diversified.

Initial	$1,000
Additional	$50
IRA Initial	$500
AIP Initial	$50
AIP Additional	$50

Azzad Ethical Income (AEIFX)

Jamal Elbarmil / Asset Manager

The investment seeks current income and capital; long-term capital appreciation is a secondary consideration. The fund normally invests at least 80% of assets in equity securities of dividend paying companies. It may invest up to 25% in middle or small capitalization companies and up to 5% in any one issuer. The fund avoids companies with significant revenue from tobacco, alcohol, meat products, gambling, pornography, interest, insurance, and weapons of mass destruction, also banks or financial services companies. It may invest in foreign securities and acceptable fixed income bank deposits or securities.

Initial	$1,000
Additional	$50
IRA Initial	$500
AIP Initial	$50
AIP Additional	$50

Tags: amana funds, azzad funds, iman fund, Islamic Finance, islamic funds, morningstar