Dow Jones Islamic Fund
Encyclopedia
The Dow Jones Islamic Fund (symbol: IMANX) invests in Shariah compliant companies, in response to the needs of Muslim
investors, who not only want to have a financially rewarding investment
, but a Shariah compatible one as well. Since its inception on June 30, 2000, IMANX has provided Muslim investors with financial alternatives based on Islamic law
.
(NAIT). Allied Asset Advisers is the registered investment adviser and manager of the Fund. The Fund invests at least 80% of its net assets in domestic and foreign securities included in the Dow Jones Islamic Index
es, as well as up to 20% of its net assets in securities chosen by the Fund's Investment Adviser that meet Islamic principles. The Fund consists solely of common stock
s. It includes, among others, shares of stocks from the Dow Jones Islamic Market US Index, which tracks American companies that meet Islamic principles. The Indexes is advised by a Shariah Supervisory Board of six prominent Islamic scholars from six countries. The Investment Adviser is advised by a Board of Trustees of prominent Islamic scholars from the United States
...
, the Fund adheres to the criteria developed by the Shariah Supervisory Board of the Dow Jones Islamic Index composed of internationally renowned scholars. The Fund also does not invest in interest-related instruments and may hold cash on a temporary basis. It is possible that such restrictions may result in lower overall Fund performance than those mutual funds which are not subject to such restrictions. One year returns before taxes for the period ending December 31, 2004 were 5.45 percent; returns after taxes on distribution were 5.43 percent.
Muslim
A Muslim, also spelled Moslem, is an adherent of Islam, a monotheistic, Abrahamic religion based on the Quran, which Muslims consider the verbatim word of God as revealed to prophet Muhammad. "Muslim" is the Arabic term for "submitter" .Muslims believe that God is one and incomparable...
investors, who not only want to have a financially rewarding investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
, but a Shariah compatible one as well. Since its inception on June 30, 2000, IMANX has provided Muslim investors with financial alternatives based on Islamic law
Sharia
Sharia law, is the moral code and religious law of Islam. Sharia is derived from two primary sources of Islamic law: the precepts set forth in the Quran, and the example set by the Islamic prophet Muhammad in the Sunnah. Fiqh jurisprudence interprets and extends the application of sharia to...
.
Structure and Activities
The Dow Jones Islamic Fund is offered by Allied Asset Advisers, a subsidiary of the North American Islamic TrustNorth American Islamic Trust
The North American Islamic Trust is a Saudi-backed organization based in Plainfield, Indiana, that owns Islamic properties and promotes waqf in North America...
(NAIT). Allied Asset Advisers is the registered investment adviser and manager of the Fund. The Fund invests at least 80% of its net assets in domestic and foreign securities included in the Dow Jones Islamic Index
Dow Jones Islamic Index
The Dow Jones Islamic Market Index , launched in 1999 in Bahrain, was the first index created for investors seeking investments in compliance with Muslim Sharia law.The DJIM has an independent Shari’ah Supervisory Board...
es, as well as up to 20% of its net assets in securities chosen by the Fund's Investment Adviser that meet Islamic principles. The Fund consists solely of common stock
Common stock
Common stock is a form of corporate equity ownership, a type of security. It is called "common" to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock holders, bondholders, creditors, etc...
s. It includes, among others, shares of stocks from the Dow Jones Islamic Market US Index, which tracks American companies that meet Islamic principles. The Indexes is advised by a Shariah Supervisory Board of six prominent Islamic scholars from six countries. The Investment Adviser is advised by a Board of Trustees of prominent Islamic scholars from the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
...
Characteristics of the Dow Jones Islamic Fund
- Shariah Compliance - The Fund adheres to the criteria developed by the Shariah Supervisory Board composed of internationally renowned scholars. Based on these criteria, the following businesses are generally excluded: alcohol, tobacco, pork products, conventional financial services (banking, insuranceInsuranceIn law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
, etc.), weapons, defense, and entertainment. The Fund does not invest in interest-paying instruments (riba) frequently used by mutual fundMutual fundA mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
s as temporary investments, and instead may hold cash on a temporary basis.
- Diversification - The Fund offers you diversification with a portfolio of over 300 Shariah Compliant companies in diverse business sectors.
- Low Expenses - The Fund is a no-load fund with one of the lowest annual fees of any Shariah compliant fund available.
- Accessibility and Flexibility - The Fund is available at Charles SchwabCharles SchwabCharles Schwab may refer to:*Charles M. Schwab , American steel magnate*Charles R. Schwab , founder of the eponymous brokerage*Charles Schwab Corp., an American based brokerage firm...
, Ameritrade and TD WaterhouseTD WaterhouseTD Waterhouse is the brand used for both Canadian and British brokerages within the TD Bank Financial Group. It was also formerly used for TD's American brokerage....
, offering flexible accounts and services including telephone purchase and redemption, and checkChequeA cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
writing.
- Active Portfolio Management - An actively managed portfolioPortfolio (finance)Portfolio is a financial term denoting a collection of investments held by an investment company, hedge fund, financial institution or individual.-Definition:The term portfolio refers to any collection of financial assets such as stocks, bonds and cash...
enables the Fund to take advantage of future opportunities in the market while adhering to Islamic legal requirements. Among the securities that meet Islamic principles, the investment adviser determines a security's attractiveness for purchase based on a number of factors, including its anticipated value and record of earnings growth, among other things.
Stock Selection and Performance
The Fund invests in foreign securities which involve risks relating to adverse political, social and economic developments abroad, as well as currency risks and differences in accounting methods. In selection of stocksStocks
Stocks are devices used in the medieval and colonial American times as a form of physical punishment involving public humiliation. The stocks partially immobilized its victims and they were often exposed in a public place such as the site of a market to the scorn of those who passed by...
, the Fund adheres to the criteria developed by the Shariah Supervisory Board of the Dow Jones Islamic Index composed of internationally renowned scholars. The Fund also does not invest in interest-related instruments and may hold cash on a temporary basis. It is possible that such restrictions may result in lower overall Fund performance than those mutual funds which are not subject to such restrictions. One year returns before taxes for the period ending December 31, 2004 were 5.45 percent; returns after taxes on distribution were 5.43 percent.