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Religion is often a controversial topic. Historically, religion has sparked wars, divided nations, and catalyzed suppression amongst several demographics of people. Today, religion remains in the spotlight as controversial especially for Muslims looking to maximize their investment opportunities and returns. Shariah is the Islamic law that includes guidelines that impact financial decisions for Muslims. These include the prohibition of earning interest from fixed-income investments like bonds, which are a common component of an investment portfolio.
The Numbers:
The Islamic finance industry slowed down significantly in 2020 after experiencing a very strong 13% growth rate in 2019. Islamic financial institutions spent most of the year coping with the dual shocks of adjusting to the COVID-19 pandemic and historically low oil prices. According to the latest State of Global Islamic Economy report, total Islamic finance assets stood at $2.88 trillion by the end of 2020, matching last year’s figures.
Persistently strong demand for shariah-compliant investments is helping the Islamic asset management sector remain resilient amid the coronavirus-related market upheavals, according to Moody’s.
The credit ratings agency said Malaysia and Saudi Arabia were the largest Islamic financial service in the world, accounting for almost two thirds of Islamic assets under management between them.
Impediments Muslim Investors Face:
Muslim investors avoid interest-based investments. Further, companies that get more than 5 percent of revenue from “haram,” or forbidden, activities which can include, alcohol, tobacco, weapons, cannabis, etc are also excluded from Sharia-compliant investments. Finally, highly leveraged companies should be avoided. Companies with debt exceeding a third (33 percent) of a company’s market cap are impermissible.
Banks, which by their very nature are in the business of lending money, cannot be owned. Companies that maintain a mountain of cash are out because they are earning interest from that money. So again, funds must decide how much cash is acceptable and how it is to be used.
The Solution: Canadian Islamic Wealth
After converting to Islam, Jesse Reitberger saw the challenges faced by Muslims when it comes to investing. According to Reitberger, Muslims have to abide by a certain set rules when it comes to investing . “The biggest challenge that Muslims face when it comes to investing, is investing in something that aligns with their religious values,” explained Reitberger.
As a result, Reitberger and partner Sheraz Ali made a commitment to help Muslims across Canada and Canadian Islamic Wealth was born. The ultimate goal of Canadian Islamic Wealth is to help Muslims achieve their financial goals without compromising on Islamic Values.
“We see an opportunity in the current environment for accelerating and unlocking the long-term potential of the industry,” Ali says. As a Co-Founder in Stock Sharks – a research ed-tech company, Ali has been able to strengthen financial services by seeing what’s missing from the current market and Islamic Financing options were one of them.
These social and environmental investments don’t just cater to Muslims, many Canadians with strong morals want to see investments that align with their values. That is why, many non-muslims choose to invest with Canadian Islamic Wealth.
For Muslims looking to invest, Reitberger quipped that the best advice he can give is to contact Canadian Islamic Wealth. But for those who are looking to invest, he said, they follow a process in on-boarding a client to make sure the relationship is solid and they understand why they are investing.
The company is doing their part with working with other Islamic charities and non profit organizations. The company’s main goal is to break into the American market in Q4 of 2021. Visit www.canadianislamicwealth.com and book a free discovery call for more information today.
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