A:

Specialized mutual funds offer investments tailored for particular religions including Judeo-Christian faiths and Islam. As a point of interest, there are also funds for particular geographical regions, like Latin America or Europe; different sectors, like technology or retail; social or ethical beliefs, like those related to the environment or to health.

Religious, or faith-based, funds were created for people who want to invest based on the principles and tenets of their faith. Religious funds are similar to ethical funds, but ethical funds invest in companies based on social issues, while religious funds invest in companies based on moral ones. For example, some companies invest in funds that follow Islamic law, while others seek funds that incorporate Catholic values. (To learn more about this topic, read our related article Ethical Investing.)

Investing in a faith-based fund is just like investing in any other fund. You must find a firm that offers religious mutual funds and then thoroughly research the funds and their performance to make sure they match your investment goals for growth and yield. Contact the firm's customer service department with questions or concerns. When you are satisfied that the fund meets your criteria, including religious adherence, inquire about purchasing.

Getting started on your search for faith-based funds can be as simple as conducting an internet search to find reports on funds that rank sustainability, level of social responsibility and religious affiliation.

To learn more about mutual funds screened for Sharia compliance, read our related article Working With Islamic Finance.

This question was answered by Chizoba Morah.

RELATED FAQS
  1. How do I calculate the loan-to-value ratio using Excel?

    Learn what a mutual fund and a money market fund are, and understand the differences between each and how they serve various ... Read Answer >>
  2. Are investments in the drug sector appropriate for ethical investors?

    Explore the question of whether investments in the pharmaceutical industry are appropriate for investors who wish to pursue ... Read Answer >>
  3. How do I judge a mutual fund's performance?

    Evaluate mutual fund performance utilizing resources such as Morningstar; compare the fund with others in its peer group ... Read Answer >>
  4. What is an Islamic investment policy?

    Islamic investments are a unique form of socially responsible investments because Islam makes no division between the spiritual ... Read Answer >>
  5. Can mutual funds only hold stocks?

    Learn about which types of mutual funds consist of only stocks, which may include stocks in addition to other assets and ... Read Answer >>
  6. How much of a company's stock can a mutual fund own?

    There is no written rule that stipulates how much of a company a mutual fund can own. Instead, there are two major factors ... Read Answer >>
Related Articles
  1. ETFs & Mutual Funds

    A Guide To Faith-Based Investing

    If you've wondered how to invest in a way that reflects your religious belief, we've got the answers for you.
  2. Investing

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  3. Managing Wealth

    "Value" Investments: Social, Faith & Eco-Investing

    When it's time to invest, why not follow your heart along with your head? These four types of investments seek to do good while returning a profit.
  4. ETFs & Mutual Funds

    A Mutual Funds Guide for Young Investors

    Learn how mutual funds work, why they are so popular and how younger investors can get started by putting mutual funds in their IRAs or 401(k)s.
  5. Managing Wealth

    Go Green With Socially Responsible Investing

    Find out how morals and ethics can bring you a surprising return.
  6. ETFs & Mutual Funds

    Mutual Funds Are Awesome - Except When They're Not

    This investment is very popular, but that doesn't mean it comes without risk.
  7. ETFs & Mutual Funds

    The Benefits of Picking Mutual Funds Over Individual Stocks

    Learn about the advantages of investing in mutual funds rather than individual stocks, including the benefits of affordability, oversight and diversification.
  8. ETFs & Mutual Funds

    How to Rate Your Mutual Fund Manager

    What to really look for when you're deciding on a mutual fund.
  9. ETFs & Mutual Funds

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
  10. ETFs & Mutual Funds

    Make Sure You Avoid Adding These Mutual Funds to Your 401(k)

    Find out which five types of mutual funds you should avoid in your 401(k), including why buying this year's hottest fund is likely a losing bet.
RELATED TERMS
  1. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  2. Islamic Banking

    A banking system that is based on the principles of Islamic law ...
  3. Equity Fund

    A mutual fund that invests principally in stocks. It can be actively ...
  4. Family Of Funds

    A group of mutual funds offered by one investment or fund company. ...
  5. Regional Fund

    A mutual fund that confines itself to investments in securities ...
  6. Foreign Fund

    A mutual fund, closed-end fund or exchange-traded fund that invests ...
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  5. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  6. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
Trading Center