An Overview on Shariah Investments in India

An Overview on Shariah Investments in India

Shariah is an Islamic term which is often referred to the rules for livelihood in accordance to God’s will. These are good practices that enable social responsibility. This post will detail about what Shariah is all about and various ways to investment in Shariah Compliant schemes available in India.

What is Shariah?

Shariah is an Islamic term which is often referred to the rules for livelihood in accordance to God’s will. These are good practices that enable social responsibility.

What is Shariah Compliance?

Shariah Compliance is the set of rules defined in Islamic investment principle. It is also called Shariah Law. Shariah enforces the investors to have disciplined and socially responsible investment strategies.

What are Shariah Compliant Businesses?

Businesses that do not invest actively or passively in the following but may not be limited to:
Adult Entertainment Industry,
Alcohol,
Conventional Banks that offer Interest on Deposits,
Insurance Companies,
Gambling,
Pork,
Tobacco and
Weapons.

What are Shariah Compliant Stock Market Indices in India?

Following are the Shariah Compliant Indices.
NIFTY SHARIAH 25
NIFTY 50 SHARIAH
NIFTY-500-SHARIAH
S&P BSE 500 Shariah

Who are eligible to invest in Sharia Compliant Schemes in India?

There is no restriction and any eligible person regardless of the religion can invest in Sharia Compliant Schemes in India.

Performance of Shariah Compliant Stock market indices in India

Index3 Yr Returns5 Yr Returns
NIFTY SHARIAH 2510.1%11.8%
NIFTY 50 SHARIAH11.5%9.8%
NIFTY-500-SHARIAH11.4%11.6%
S&P BSE 500 Shariah9.3%11.48%

What are Shariah Compliant Mutual Funds in India?

There are the two Shariah compliant mutual funds in India.

  1. Tata Ethical Fund,
  2. Taurus Ethical Fund

Tata Ethical Fund is a Shariah compliant mutual fund. Following plans available to invest in Tata Ethical Fund:

  • Tata Ethical Fund – Direct Plan Dividend
  • Tata Ethical Fund – Direct Plan Growth
  • Tata Ethical Fund Regular Plan – Dividend
  • Tata Ethical Fund Regular Plan – Growth

Taurus Ethical Fund is a Shariah compliant mutual fund. Following plans available to invest in Taurus Ethical Fund:

  • Taurus Ethical Fund – Regular Plan – Bonus Option
  • Taurus Ethical Fund – Regular Plan – Dividend Option
  • Taurus Ethical Fund – Regular Plan – Growth Option
  • Taurus Ethical Fund-Direct Plan-Bonus Option
  • Taurus Ethical Fund-Direct Plan-Dividend Option
  • Taurus Ethical Fund-Direct Plan-Growth Option

Performance of Shariah Compliant Mutual Funds in India

Tata Ethical Fund Performance

Mutual Fund3 Yr Returns5 Yr Returns
Tata Ethical Fund – Direct Plan Dividend 18.45%58.18%
Tata Ethical Fund – Direct Plan Growth29.69%73.26%
Tata Ethical Fund Regular Plan – Dividend6.25%19.10%
Tata Ethical Fund Regular Plan – Growth25.83%65.22%

Taurus Ethical Fund Performance

Mutual Fund3 Yr Returns5 Year Returns
Taurus Ethical Fund – Regular Plan – Bonus Option32.00%63.3%
Taurus Ethical Fund – Regular Plan – Dividend Option32.01%63.35%
Taurus Ethical Fund – Regular Plan – Growth Option31.99%63.33%
Taurus Ethical Fund-Direct Plan-Bonus Option35.34%69.40%
Taurus Ethical Fund-Direct Plan-Dividend Option35.55%69.66%
Taurus Ethical Fund-Direct Plan-Growth Option35.59%70.17%

In addition to these, there is also a ETF RELIANCE ETF SHARIAH BEES which has name Shariah in it but not deemed to be a Shariah Compliant Exchange Traded Fund.

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