TORONTO — Ahmed Najar only started investing two years ago after discovering a way to do so that aligns with his Muslim values.
The 36-year-old lab researcher turned to Halal investing that screens out forbidden investments such as pork, alcohol, tobacco, weapons, adult entertainment and the biggest no-no of all: debt, bonds or interest.
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.
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Responsible investing represents nearly 62 per cent of Canada’s investment industry, up from 50.6 per cent 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 Kindred Credit Union in 2016 to broaden its reach, about 70 per cent 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.
“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, while Wahed Invest’s ETF 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,” he said.
Sawwaf said market research has indicated that more than 70 per cent 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.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
