Message No : 10Sr.No : 356/722
Question By : Atia Shaikh

Is investing in shares permissible in Islam. Also is investing in mutual funds permissible?


Reply By : Md. Asad Qasmi
Designation : Mufti, ODI, MMERC, Mumbai] 

In the name of Allah The Most Gracious The Most Merciful

The answer to your question is as follows

Investment through share market permissible in Islam in case two conditions are found: (1) the company you are investing in is doing a lawful business (2) the company divides the total profits to all the shares as per the capital investment. Because if the company is doing unlawful business then its shares and profits all, of course, will be unlawful. So before investing in any company or share market find out at least the above mentioned conditions are met.
Investment in mutual funds is also permissible in Islam but with conditions. Such as the Fund must not deal in interest base profit, profit should not be fixed and the fund should only deal with Islamically lawful business.

and Allah (swt) knows the best
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