GENERAL FAQs

Islamic investing is quickly becoming very popular worldwide. Muslims represent an underserved market that has only recently been recognized. Over 7 million Muslims live in the US, half of whom make $50,000 according to Zogby’s (based on US Census 2020) – well above the national average – and they want investment alternatives that meet their needs. Iman Fund offers such an opportunity for investors because it integrates the ethical principles of Islam with equity investing.

At the center of Islamic investing is the religion itself: Islam. With nearly 1.2 billion followers, Islam is the world’s second-largest religion. Its practitioners are scattered across the globe (only about 20% of Muslims are Arab), and Islam’s recent growth has been in the West (Europe and the United States). Through the divine revelation of the Qur’an to Prophet Muhammad 1424 years ago, people have been called to a strict monotheism and upright social conduct in all spheres of life.

Passages in the Qur’an and in the Hadith (teachings of the Prophet) encourage believers to engage in economic endeavors collaboratively, avoid hoarding, giving and taking of interest-usury and economic exploitation and be industrious, but there are no specific scriptural or cannonical instructions for navigating modern financial markets. Contemporary Islamic economic theory developed in the middle of the 20th century in the Middle East and Southeast Asia, with early efforts concentrating on an Islamic approach to fiscal policy and capital financing. As the popularity of equity markets grew toward the end of the century, Muslims scholars and businesspeople have moved to define and implement the principles that underlie Islamic investing. The application of these Islamic principles to stock investments is a relatively new process.

The basic tenet of Islamic investing is that a Muslim should invest his/her assets to reflect the Islamic principles that govern his/her daily life. For example, as drinking alcohol and eating pork products are prohibited in Islam, so too is investing in brewing or pork processing companies. Islamic investing also prohibits stock positions in companies whose “primary business” involves gaming, pornography, and (according to some scholars), tobacco and weaponry industries.

A number of strongly worded injunctions in the Qur’an prohibit believers from dealing with riba, or interest. Investments in conventional financial institutions, whose primary business involves interest-based transactions, are prohibited. For the remaining permitted companies, who like most public corporations, deal with interest through either credit receipts or minor capital financing, additional criteria or financial screens are applied. These screens measure the level of a company’s involvement with interest based on their total assets, net income, or other financial ratios. Companies with ratios below certain thresholds are considered suitable investments at this time. This conditional acceptance of companies with marginal and unavoidable interest involvement is ruled permissible by reputable Muslim scholars of jurisprudence with exposure to modern financial systems, on the basis of Islamic principles covering comparable mixing of minor filth (nijasah) in otherwise pure consumable.

Islamic investing is quickly becoming very popular worldwide. Muslims represent an underserved market that has only recently been recognized. Over 7 million Muslims live in the US, half of which make $50,000 according to Zogby’s (based on US Census 2020) – well above the national average – and they want investment alternatives that meet their needs. Iman Fund offers such an opportunity for investors because it integrates the ethical principles of Islam with equity investing.

At the center of Islamic investing is the religion itself: Islam. With nearly 1.2 billion followers, Islam is the world’s second-largest religion. Its practitioners are scattered across the globe (only about 20% of Muslims are Arab), and Islam’s recent growth has been in the West (Europe and the United States). Through the divine revelation of the Qur’an to Prophet Muhammad 1424 years ago, people have been called to a strict monotheism and upright social conduct in all spheres of life.

Passages in the Qur’an and in the Hadith (teachings of the Prophet) encourage believers to engage in economic endeavors collaboratively, avoid hoarding, giving and taking of interest-usury and economic exploitation and be industrious, but there are no specific scriptural or cannonical instructions for navigating modern financial markets. Contemporary Islamic economic theory developed in the middle of the 20th century in the Middle East and Southeast Asia, with early efforts concentrating on an Islamic approach to fiscal policy and capital financing. As the popularity of equity markets grew toward the end of the century, Muslims scholars and businesspeople have moved to define and implement the principles that underlie Islamic investing. The application of these Islamic principles to stock investments is a relatively new process.

The basic tenet of Islamic investing is that a Muslim should invest his/her assets to reflect the Islamic principles that govern his/her daily life. For example, as drinking alcohol and eating pork products are prohibited in Islam, so too is investing in brewing or pork processing companies. Islamic investing also prohibits stock positions in companies whose “primary business” involves gaming, pornography, and (according to some scholars), tobacco and weaponry industries.

A number of strongly worded injunctions in the Qur’an prohibit believers from dealing with riba, or interest. Investments in conventional financial institutions, whose primary business involves interest-based transactions, are prohibited. For the remaining permitted companies, who like most public corporations, deal with interest through either credit receipts or minor capital financing, additional criteria or financial screens are applied. These screens measure the level of a company’s involvement with interest based on their total assets, net income, or other financial ratios. Companies with ratios below certain thresholds are considered suitable investments at this time. This conditional acceptance of companies with marginal and unavoidable interest involvement is ruled permissible by reputable Muslim scholars of jurisprudence with exposure to modern financial systems, on the basis of Islamic principles covering comparable mixing of minor filth (nijasah) in otherwise pure consumable.

Islamic investing is quickly becoming very popular worldwide. Muslims represent an underserved market that has only recently been recognized. Over 7 million Muslims live in the US, half of which make $50,000 according to Zogby’s (based on US Census 2020) – well above the national average – and they want investment alternatives that meet their needs. Iman Fund offers such an opportunity for investors because it integrates the ethical principles of Islam with equity investing.

At the center of Islamic investing is the religion itself: Islam. With nearly 1.2 billion followers, Islam is the world’s second-largest religion. Its practitioners are scattered across the globe (only about 20% of Muslims are Arab), and Islam’s recent growth has been in the West (Europe and the United States). Through the divine revelation of the Qur’an to Prophet Muhammad 1424 years ago, people have been called to a strict monotheism and upright social conduct in all spheres of life.

Passages in the Qur’an and in the Hadith (teachings of the Prophet) encourage believers to engage in economic endeavors collaboratively, avoid hoarding, giving and taking of interest-usury and economic exploitation and be industrious, but there are no specific scriptural or cannonical instructions for navigating modern financial markets. Contemporary Islamic economic theory developed in the middle of the 20th century in the Middle East and Southeast Asia, with early efforts concentrating on an Islamic approach to fiscal policy and capital financing. As the popularity of equity markets grew toward the end of the century, Muslims scholars and businesspeople have moved to define and implement the principles that underlie Islamic investing. The application of these Islamic principles to stock investments is a relatively new process.

The basic tenet of Islamic investing is that a Muslim should invest his/her assets to reflect the Islamic principles that govern his/her daily life. For example, as drinking alcohol and eating pork products are prohibited in Islam, so too is investing in brewing or pork processing companies. Islamic investing also prohibits stock positions in companies whose “primary business” involves gaming, pornography, and (according to some scholars), tobacco and weaponry industries.

A number of strongly worded injunctions in the Qur’an prohibit believers from dealing with riba, or interest. Investments in conventional financial institutions, whose primary business involves interest-based transactions, are prohibited. For the remaining permitted companies, who like most public corporations, deal with interest through either credit receipts or minor capital financing, additional criteria or financial screens are applied. These screens measure the level of a company’s involvement with interest based on their total assets, net income, or other financial ratios. Companies with ratios below certain thresholds are considered suitable investments at this time. This conditional acceptance of companies with marginal and unavoidable interest involvement is ruled permissible by reputable Muslim scholars of jurisprudence with exposure to modern financial systems, on the basis of Islamic principles covering comparable mixing of minor filth (nijasah) in otherwise pure consumable.

The portfolio manager of an actively managed fund tries to “outperform” a market index such as the S&P 500, or Standard & Poor’s 500 index, a market capitalization weighted index of 500 leading publicly traded companies in the U.S. One cannot invest directly in an index.

An active manager “hand-picks” stocks and other securities through active, in-depth research and analysis. Actively managed funds can be traded frequently, thus could have more taxable capital gains on non-retirement accounts.

Index funds, on the other hand, are considered to be passively managed. The manager of an index fund tries to “match” the performance or the returns of a particular benchmark or the index it follows by purchasing all (or almost all) of the stocks and bonds in the index. Index funds are traded less frequently, thus typically have less taxable capital gains on non-retirement accounts.

“No-load” funds are those that you can buy and sell without paying a sales fee or commission as long as you keep the money invested for a specific period – often 5 years. On the other hand, “load” funds charge a fee or commission that may be used to pay investment managers, marketers, or commissions to brokers. This fee reduces the total amount invested.

For example: If you invested $5,000 into a 5% fee load mutual fund, it will leave the net investment amount to $4,750 minus the $250 in commission load. Your fund would have to perform to make up the fee before you would begin to grow your initial investment.

Iman Fund is a no load fund so you can buy and sell shares whenever you like without paying a fee. Your broker firm might have separate transaction fees which are different from the sales charge of the fund itself.

“Diversification” is a technique that helps reduce risk of investing. When you diversify, you spread your investments among different types of financial instruments (such as stocks, bonds or short term reserves), industries, and other categories in an attempt to lower overall investment risk. This strategy is intended to help offset potential losses in segments of your portfolio thus offering more stability in returns. You can gain access to a large number of securities through a single fund.

There are two types of risks an investor faces when investing:

• First is the systematic or market risk that affects the whole market simultaneously. This means it is undiversifiable because it is not specific to a particular investment vehicle, company or industry, and it cannot be eliminated or reduced through diversification. It is a risk investors must accept. This risk is unavoidable due to certain common causes that cannot be controlled by any company such as political instability, exchange rates, inflation rates, war, and interest rates, etc.

• Second is the unsystematic risk. This risk is specific only to a company, industry, market, economy, or country and doesn’t affect the market in its entirety. Therefore, it can be reduced through diversification. The most common sources of unsystematic risk are business risk and financial risk. Thus, the aim is to invest in various assets so they will not all be affected the same way by market events.

Capital refers to the initial amount of money invested. A capital gain is the increase in the value of the initial investment, whether financial or real estate, that gives it a higher value than the original purchase price. A capital gain is realized “only” when an investment is sold for a profit.

For example, you purchase 100 shares of stock in a given company at the rate of $10 per share. The total expense, called capital expenditure (CapEx), would be $10 x 100 = $1,000. Now, if over a period of time, the value of each share increases in the market, let’s say to $20 per share, the total investment will be worth $20 x 100 = $2,000. If at that point, the investor sells those shares at increased market value, they will get a capital gain of $1,000. 

On the other hand, investment income is attributed to earned interest or dividends paid by investments in the financial markets. Some investment income may also be attributable to capital gains. 

Total Return refers to any change in in the value of initial investment, whether financial or real estate, over a period of time. It could be higher or lower than the initial amount invested. It includes any interest, dividends, or capital gains the fund generated as well as the change in its market value (price).

Unfortunately, not at this time. The financial industry is heavily regulated. Therefore, currently, Iman Fund is only distributed in the United States due to regulatory reasons.

Iman Fund is only available for investments to those living in the United States with a valid Social Security Number. However, if you have legal status to live in the U.S., you may invest while being in another country through our online portal. It would be like managing your account remotely. However, if you have no legal status to live in the United States and you permanently and legally reside in some other country, you will not be able to invest in Iman Fund.

Some important guidelines are to invest as early in life as possible and as soon as you get a chance with whatever you have whether big or small. If you have an emergency fund, have paid off either all or the majority of your high-interest debt, and you have some extra savings left, don’t wait. Invest them as soon as possible so they can grow for your retirement, children’s college educations, buying a house 10 or 15 years down the road, or other financial goals you may have.

There is a classic investing maxim that says “time in the market is better than timing the market.” This means, that the longer you have your money invested in the market, the better the overall long-term return. If you wait for the “best” time to invest in the stock market it would mean that you may miss out on potential returns over the long haul.

Iman Fund headquarters is located at 715 Enterprise Drive, Oak Brook, Illinois 60523. 

We are happy to provide general guidance related to different aspects of investing, market and mutual funds, however, when it comes to personalized financial planning of your portfolio, we currently do not have the licensed staff to provide that.

The seasoned staff at Iman Fund may offer clients tailored advice that helps them achieve their financial objective. This includes:

• Advice about the tax implications* of their investments. This usually helps our clients achieve tax efficiency.

• Educational services to individuals to help them understand all the ins and outs of Halal investing, and how it may help stabilize their return on investment.

* Any tax or legal information provided isn’t an exhaustive interpretation of some of the current income tax regulations. Investors must consult their tax adviser or legal counsel for advice and information concerning their particular situation. Neither the Fund nor any of its representatives may give legal or tax advice.

Fees and expenses may vary from year to year. Please refer to our Prospectus for the most current information. As of 9/2021, the Fund’s expense ratio was 1.29%