At a time when policy makers are yet to approve of Islamic banking in India, Shariah-compliant financial instruments are slowly making an entry into the capital market. SBI Mutual Fund is launching a Shariah Equity Fund, an open-ended scheme which will invest money in companies that follow Shariah rules.
However, a senior SBI Mutual Fund official said investment is not restricted to any particular religious community. “Anybody can invest in this scheme. There are around 600-700 companies which follow the principles of Shariah rules. The fund mobilised will be invested in good companies selected from this lot,” he said.
This is not the first time that such an ethical fund is being launched. Benchmark MF earlier launched an ETF which tracks the S&P CNX Nifty Shariah Index. Tata Mutual Fund has an ethical fund which invests in a diversified equity portfolio based on principles of Shariah. Taurus MF had also launched a scheme which follows the principles of Shariah. These funds avoid investments in firms involved in activities like alcoholic beverages, casinos and non-halal food.