Carolyn Cui at the Wall Street Journal reports that mutual funds that invest in accordance with Islamic doctrine have been among this year's top performers. This outperformance is in large part because Islam forbids charging interest; funds following these rules have avoided investing in banks and mortgage companies that have been hard hit by the sub-prime meltdown. In fact, of the nine broad sectors in the S&P 500, only two are negative this year: financials and consumer discretionary.
Most mutual funds that invest based on Islamic principles have largely weathered the recent credit turmoil. Two Islamic funds offered by Azzad Asset Management, smaller than the Amana and its $333.1 million of assets, also are beating the Standard & Poor's 500-stock index since the start of this year, after trailing the broad market for several years.
Dow Jones Islamic Fund is up 13.3% year to date, which ranks it in the top 4% of its category of large- market-capitalization stocks. The fund, managed by Allied Asset Advisors, tracks the Dow Jones Islamic Market Index, which is a product of Dow Jones & Co., publisher of The Wall Street Journal.
A sister Amana fund, Amana Growth Fund, isn't doing quite as well. The fund has $680 million of assets and invests in companies whose earnings are expected to rise faster than the broader market. It has returned 11.5% this year. While that beats the broader market, it still trails its growth-type peers by 1.4 percentage points."
The chart-topping performance of the two Amana funds has apparently attracted plenty of non-Muslim investors as well. As the article states, assets in the funds has ballooned to $1 billion in the past 18 months.
Islamic Funds Outperforming
Carolyn Cui at the Wall Street Journal reports that mutual funds that invest in accordance with Islamic doctrine have been among this year's top performers. This outperformance is in large part because Islam forbids charging interest; funds following these rules have avoided investing in banks and mortgage companies that have been hard hit by the sub-prime meltdown. In fact, of the nine broad sectors in the S&P 500, only two are negative this year: financials and consumer discretionary.
Most mutual funds that invest based on Islamic principles have largely weathered the recent credit turmoil. Two Islamic funds offered by Azzad Asset Management, smaller than the Amana and its $333.1 million of assets, also are beating the Standard & Poor's 500-stock index since the start of this year, after trailing the broad market for several years.
Dow Jones Islamic Fund is up 13.3% year to date, which ranks it in the top 4% of its category of large- market-capitalization stocks. The fund, managed by Allied Asset Advisors, tracks the Dow Jones Islamic Market Index, which is a product of Dow Jones & Co., publisher of The Wall Street Journal.
A sister Amana fund, Amana Growth Fund, isn't doing quite as well. The fund has $680 million of assets and invests in companies whose earnings are expected to rise faster than the broader market. It has returned 11.5% this year. While that beats the broader market, it still trails its growth-type peers by 1.4 percentage points."
The chart-topping performance of the two Amana funds has apparently attracted plenty of non-Muslim investors as well. As the article states, assets in the funds has ballooned to $1 billion in the past 18 months.
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