The bank has knowledge of the top 10 investments for the mutual funds (like other banks, gold companies, etc.) Which accounts for 15 percent of the mutual fund. The rest of the mutual fund is unknown to the bank tellers as that is invested in companies that change from time to time
Unlike regular investment accounts, money inside an RRSP is tax-sheltered, meaning that it does not get taxed like regular income or investments. As investments grow in an RRSP, the returns received each year are also tax-sheltered, allowing savings to grow faster. In the same way that observant Muslims need to know about food ingredients to ensure that their food is halal, they also need to know about the nature of their investments to ensure their investments are halal. Because interest is explicitly forbidden in the Qur'an, many interest-based transactions and investments are considered not halal or non-Shari’ah compliant. Along the same lines, bonds, which are interest-based investments in companies or governments, are also not halal. Not all equity-based investments are halal, however. For obvious reasons, investments in companies that sell alcohol, pork-products, gambling, pornography, or weapons do not pass the test of Shari’ah compliance.
If you are a skilled investor, one option is to choose investments that follow the guidelines from the Dow Jones Islamic Index, as all of these have already been scrutinized by a board of Shari’ah scholars and deemed Shari’ah compliant. This will ensure that your investments are halal. One way to minimize risk is to diversify your investments so that they are not all in one, two, or even a handful of companies, but in dozens or hundreds. A mutual fund is a professionally managed investment fund composed of many different stocks.
It is up to the mutual fund manager to decide what percentage of the investment fund goes into each different company to maximize returns and minimize risk. These management expenses reduce the potential returns that come from the investment fund. In Canada, one of the Shari’ah compliant mutual funds is The Global Iman Fund, offered by Global Growth Assets Inc. Established in 2009, as of February 28, 2014, the top 10 investments that made up the Global Iman Fund included Apple, Microsoft, Google, Johnson & Johnson, and Procter & Gamble. Your investment in the bullion fund represents your ownership of precious metals, which are stored in a Canadian vault. As the value of these precious resources go up and down, so too does the value of your investments. So, while it can seem a challenge for Muslims to take advantage of RRSPs to prepare for retirement, there are options and with research and due diligence, you can find halal investments to meet your needs.
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