Investing in Mutual Funds
13-9-2026 | IslamWeb
Question:
assalamwalekum.i want to know about halal mutual funds which are exist in market example tata ethical fund,taurus ethical fund ,quantum ethical fund and uti nifty sharia fund ? can u tell me about all above mutual funds and is it rerally halal or sharia complian.what is the sharia complian guidline ?all these funds having certify from TASIS and others fatwas group?guide me
Answer:
All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad (ﷺ) is His slave and Messenger.
What we can answer regarding your question is to mention the general rules and regulations that should be present in such funds for it to be permissible to deal in or invest with them:
That their investment be in permissible activities, so it is not permissible to invest in companies whose core business is forbidden, such as [selling] alcohol, selling pork meat or dead animals, and whatever involves the promotion of indecency, and other activities that are religiously forbidden.
And that their transactions be free of interest, gambling, and games of chance.
And that the contract with the fund be based on profit and loss according to a common, agreed-upon ratio, and not based on a fixed, guaranteed return.
As for your question: are all these funds in possession of certificates from the bodies that issue fatwas or shar'ī certificates?
Its answer is that we have no knowledge of that, and you may contact the fund's management and ask them directly about this, and whether it has a trustworthy shar'ī supervisory board or not.
Whichever of them you find to regulate its transactions according to the shar'ī controls, and has a trustworthy shar'ī supervisory board, then there is no harm in investing with it and dealing with it.
Seeking the lawful is something desired, and the Muslim should be most keen upon it.
The Messenger of Allah (ﷺ) said: “Indeed Allah is Pure and accepts only that which is pure. And indeed Allah has commanded the believers with what He commanded the messengers, so He said (what means): ‘O Messengers, eat from the pure things and do righteous deeds; indeed, I am Knowing of what you do,’ and He said (what means): ‘O you who have believed, eat from the pure things which We have provided for you and be grateful to Allah if it is [indeed] Him that you worship.’” Then he (the Messenger of Allah) mentioned a man who, after a long journey, disheveled and dusty, raises his hands to the sky [saying]: “O Lord, O Lord!" — while his food is unlawful, his clothing is unlawful, his drink is unlawful, and he has been nourished by unlawful means, so how can he be answered?” [Muslim]
Allah Knows best.