Cape Town - It is a myth that Shariah compliant products perform poorly in comparison to conventional funds, according to head of research at Kagiso Asset Management Abdul Azeez Davids.
“Investing in a Shariah compliant fund is not going to generate lower or inferior returns,” he said in an interview with Fin24.
The term Shariah refers to a set of laws and regulations that govern a Muslim's life and Shariah compliant investing is an important branch of that law. This does not mean Shariah compliant funds are only for Muslims.
In explaining the concept of Shariah compliant products, Davids said that it was about prohibiting the giving or receiving of interest, in line with Islamic religious law.
The investor makes money through capital profit – buying low and
selling high in companies deemed to be Shariah compliant, as well as
receiving dividends from these company shares.
Davids urged young
people taking care of their parents to start saving early. "You need to
allocate some of your budget to savings."
He added that even entrepreneurs need to be educated to save.
if you put away R500/ month – over 20 to 30 years, that adds up. Sadly,
we have seen many people who do not save, end up as beggars.”
* It's National Savings Month. Do you have a successful savings plan or story to tell? Share it with us nowand help others to also become Savings Heroes. For more on savings visit our special Savings Issue.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: