The term ” Shariah Investment” refers to a system of Investment activity that is consistent with Islamic law (Shariah) principles and guided by Islamic economics. In particular, Islamic law prohibits usury, the collection and payment of interest, also commonly called riba in Islamic discourse. In addition, Islamic law prohibits investing in businesses that are considered unlawful, or haraam (such as businesses that sell alcohol or pork, or businesses that produce media such as gossip columns or pornography, which are contrary to Islamic values). Furhermore the Shariah prohibits what is called “Maysir” and “Gharar”. Maysir is involved in contracts where the ownership of a good depends on the occurence of a predetermined, uncertain event in the future whereas Gharar descibes speculative transactions. Both concepts involve excessive risk and are suppposed to foster uncertainty and fraudlent behaviour. Therefore the use of all conventional derivative instruments is forbidden in Islamic Investment.
Wealth Folio assist its clients to understand investment in the light of shariah principles and help them in choosing the investments which are Shariah Compliant.