It’s not just a label for meat: halal investments target Islamic customers | Breaking:

Whether it’s mutual funds, savings accounts or stock trading, millions of Canadians depend on investments for their financial future.

But for some Muslims, faith eliminated many monetary options due to religious restrictions around concepts such as pay (or receive) interest.

This meant that for years Canadians like Ammar Maqsud, who observes those religious principles, could not even deposit money into a standard savings account at their bank.

“They didn’t have any halal options available; I kept everything under control. So I was basically losing money.” [due to] inflation, because it was not reversed for many years,” said Maqsud, who works as an engineer in Calgary’s energy sector. Halal is an Arabic term that translates to “allowed” or “allowed” in English.

Nearly five percent of Canada’s population identifies as Muslim, according to Statistics Canada. That could mean that up to 1.8 million people would face similar problems if their religious beliefs coincided with practices like Maqsud’s.

While Islam does not generally prohibit investment, many practicing members of the community cannot invest in companies that produce or sell religiously restricted products, meaning it can be difficult to invest in financial accounts or products that may affect various sectors of the community. economy.

“I think a lot of the Muslim community is shy about investing, period,” he said.

“They say, hey, I’m not going to invest anything to begin with, and that’s certainly holding them back.”

However, Maqsud is one of many Muslims taking advantage of an emerging Canadian investment market, aimed at clients who want “halal” options, or those that match their religious requirements.

No insurance, alcohol or pornography allowed.

Calgary-based Hash Assad is a financial consultant with IG Wealth Management who focuses on this community. Maqsud is one of his clients.

“To be brutally honest with you, many Muslims don’t know what they can and can’t do,” Assad told Breaking:.

Most products that a Canadian investor would purchase from a financial institution are incompatible with the Islamic prohibition on interest, or riba.

“That makes most, if not all, conventional investments out of reach for Muslims. Things as simple as a savings account are not allowed… Guaranteed investment certificate? Not allowed… Bonds, mutual funds, exchange-traded funds,” he listed.

According to Assad, there are many other economic areas that should also be avoided, and his job is to carefully select actions and investments that do not affect any of them.

“Sectors that are not allowed to invest in include advertising, media, finance [products] including insurance companies, gambling, alcohol, pornography and weapons of mass destruction,” he said.

Companies should also avoid taking on too much debt so they are not seen as making profits or operating on interest, the financial consultant said.

Halal meat, of course. Halal stock? No.

Even businesses that you may not consider problematic may be prohibited for some Muslims. Take Loblaw Companies Ltd., which trades on the Toronto Stock Exchange as TSE:L and operates more than 2,400 stores, including some of the largest supermarkets in Canada.

Loblaw stores may sell halal meat every day, but the company is not a halal investment, according to Assad, because its financial subsidiary makes money on interest.

However, advisors like Assad consider companies like Visa and MasterCard to be halal, because while those companies process and facilitate debt and interest charges, they do not collect the interest directly.

Instead, it is the banks that charge and collect the interest. Therefore, banks are not halal. Visa? To paraphrase his slogan, he could be everywhere practicing Muslims want to be.

Assad noted that many Canadian energy and mining companies consider themselves halal, as do some technology companies.

Many actions considered halal are also halalindexed by the financial agency S&Pincluding a list of Canadian stocks called S&P/TSX 60 Shariah Index. Muslim investors looking to keep their finances halal can also access these options, just as any Canadian could buy stocks or indices on their own if they wish.

Social impact, not just financial

A Toronto economist notes that when financial advisors make it easier to choose halal investments, there is a positive social impact.

“When a group is excluded from participating in financial markets, they are held back,” said Walid Hejazi, professor of economic analysis and policy at the University of Toronto’s Rotman School of Management.

According to Hejazi, creating financial vehicles that Muslims can easily access helps create better ways to integrate various groups as they immigrate and also move to Canada.

“It opens [financial] facilities for newcomers to these communities that are so important as gateways to broader Canadian society,” Hejazi said.