I want to invest in Shariah Compliant Mutual Funds

Unfortunately, the universe of Shariah compliant diversified equity mutual funds in India is very limited. There are only 2 Shariah compliant mutual fund schemes in India, Tata Ethical Fund and Taurus Ethical Fund. Alternatively you can consider investing in thematic funds, which invest in sectors considered halal (e.g pharmaceuticals, technology etc). Please note that, these thematic mutual fund schemes do not claim to be Shariah compliant in their scheme information documents. Therefore, you need to read their scheme information document carefully and determine if investment mandates of these funds is halal as per Shariah laws. You can look up top performing pharma or technology funds by using our tool, Top Performing Mutual Funds - Equity Funds Pharma and Top Performing Mutual Funds - Equity Funds Technology. For pharma and technology funds, you need to have an investment horizon of 3 – 5 years at least. If you have any doubt regarding compliance of these funds with religious laws, you should consult with Islamic Finance experts.

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