Financial products that comply with Islamic or Sharia law, and are therefore suitable for Muslims, have been offered by major banks in the UK for several years.
Islamic, or Sharia, law forbids the charging or receiving of interest (riba in Arabic), making many conventional investment funds off limits. Shares and dividends are acceptable, but speculation is forbidden.
Additionally the only companies that are halal (permissible) to own shares in cannot have income from alcohol, pork-related products, pornography and nudity, conventional financial services, gambling, tobacco, armaments and human or animal genetic experimentation.
To ensure Scottish Widows' new fund is fully compliant with Islamic law, a Sharia Advisory Board provides guidance and approval on appropriate investments.
The fund can be held in an ISA and retail investors can access the fund through their IFA.