Najar says the main driver for his investment decisions is religious.
“I cannot do the other way, it’s just impossible. Even if there is money to be made I cannot make it that way,” he said from Vancouver.
The money he invests must do no harm and be beneficial for society. Usaries are forbidden because the Qur’an says Muslims aren’t allowed to profit from lending money, so earning interest from an individual or bank is prohibited.
Socially responsible investing, including those based on religious beliefs, is a growing trend in Canada with assets under management surging to $3.2 trillion last year, up from $2.1 trillion in 2017, according to the Canadian Responsible Investment Trends Report.
Responsible investing represents nearly 62% of Canada’s investment industry, up from 50.6% two years ago.
Investing based on religious values remains a small but growing subsection of this trend.
Like all investing, those who make decisions based on their faith should educate themselves and find a trusted financial adviser, said Najar.
That’s especially crucial for Halal investing because most financial advisers are not familiar with the detailed web of options and restrictions, said Jesse Reitberger, co-founder of Canadian Islamic Wealth, who guides Najar’s moves.
Reitberger has focused on helping the Muslim community to adhere to financial tenets of the Qur’an since converting to Islam in 2014.
He said many Muslims have sat on the sidelines or invested and just plead ignorance.
“They just keep their money either sitting in a chequing account or under their mattress at home,” he said from Winnipeg.
For many Muslims, especially older generations, that’s meant saving cash to make purchases of real estate, cars or gold.
Canada’s Muslim population exceeds one million and is expected to become the second-largest religion by 2030.
Finding investments that are Islamic compliant can be a challenge because Canada is an interest-based economy, said Reitberger.
The Dow Jones Islamic Index and S&P/TSX 60 Shariah contain several funds that hold permissible investments.
Other faiths have taken similar steps to investing, albeit without any prohibition on debt.
The Mennonite Savings and Credit Union was formed 56 years ago to allow members to “see mutual aid put into faithful practice.”
It created a family of socially responsible funds to help investors bridge the gap between their principles and the way they invest their money.
Renamed the Kindred Credit Union in 2016 to broaden its reach, about 70% of its 25,000 members have a faith-based affiliation.
“People have taken a really big interest in this simply because it allows them to align all aspects of their lives to reflect their beliefs including their finances,” said Tim Fox, director of wealth and investments.
Screens are put in place to exclude investments in alcohol, tobacco, cannabis, gambling, military and weapons, along with those that have negative impacts on human rights, employees and animal welfare.
“Those screens continue to evolve as a social awareness evolves. As a community, as a society we decide what is important and what we’re willing to invest in and not invest in.”
Kitchener, Ont.-based Meritas Financial was created early on because there were very few options available, added Kindred CEO Ian Thomas. Meritas Financial, a mutual fund company, merged with Qtrade Financial Management Inc. in 2010.
“Over the last two decades, with acceleration over the last 10 years, all of a sudden values or socially responsible investing or responsible investing has really come to the forefront and the outcome has become more mainstream.”
Other financial institutions that provide faith-inspired options include Khalsa Credit Union. It helps British Columbia’s Sikh community while Edmonton’s Christian Credit Union applies “Christian values to financial services.”
Companies such as Wealthsimple and Manzil have sprung up in recent years to fill in gaps for the Muslim community.
Online investment firm Wealthsimple said it is preparing to launch its Shariah-compliant ETF as early as next month to replace its current offering of 50 stocks.
It will contain more than 150 stocks and increased diversification.
“One of the problems that Shariah investors have is you end up screening out entire industries from how they can invest,” chief investment officer Ben Reeves said in an interview.
He said Shariah-compliant funds can generate similar returns to regular investment vehicles, noting that its current offering, launched in 2017, has returned about six per cent annually.
Mohamad Sawwaf, co-founder and CEO of Toronto-based Islamic finance company Manzil, created its own diversified portfolio offering — Manzil Halal Portfolios — in partnership with CI Direct Investing, the roboadviser arm of CI Financial Inc.
The portfolio includes alternatives to fixed income like Islamic mortgages that are based on real and hard assets. Meanwhile, New York-base Wahed Invest LLC offers an ETF that invests in Shariah compliant stocks.
“This is a very underserved community and this is about financial inclusion because they’re currently excluded within the Canadian marketplace,” said Sawwaf.
Sawwaf said market research has indicated that more than 70% of Muslim Canadians would adopt Halal investing if products are available.
That’s particularly true of younger Muslims who are more interested in investing than older generations.
Restrictions on fixed income end up helping investors to do well, added Sameer Azam, investment adviser at RBC Wealth Management.
“A lot of the criteria pushes you to companies with lower leverage so at the end of the day we see a lot of quality in our clients’ portfolio,” he said.
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
