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Islamic Investors

Responsible investment is an approach to investment that explicitly acknowledges the relevance to the investor of environmental, social and governance (ESG) factors.

We consider Islamic investing as a part of the responsible investing landscape. The focus of Islamic investing is to avoid investing in businesses that produce goods and services that are harmful to the community and / or the individual.

The Koran (Quran) is the central religious text of Islam, which Muslims believe to be a revelation from god and therefore relevant to Islamic investing, it provides the guidance from which Australian companies can be selected. For example, because tobacco and alcohol are considered bad for the individual, these companies are excluded from selection. The interpretation of the teachings contained in the Koran is known as Shariah Law. 

 

Moral and ethical investing

Aiming to encourage ethical and moral investment behaviour, the law limits the types of companies for investment. The practical effect when constructing client portfolios through our Crescent Ethical Account is we must exclude companies, for example:

  • Are directly involved in adult products and services, alcohol, tobacco, gaming, armaments, banking and insurance
  • With financial ratios that breach the following levels:
  • Total debt)/(Market capitalisation) ≥ 33%
  • (Cash + interest bearing securities)/(Market capitalisation) ≥ 33%
  • (Accounts receivable)/(Total assets) ≥ 33%
  • Interest income of business revenue must not exceed 5%

Moreover, as Shariah law disallows gambling and requires exclusion of gambling-related businesses, when managing Shariah-compliant portfolios for our clients we cannot undertake certain types of trading such as shorting and derivatives.

 

Investors

Testament to our investment capabilities, particularly our Shariah compliant portfolio management expertise, Intrinsic represented Australia and Victoria at the Global Islamic Financial Forum in 2010. The forum as held in Kuala Lumur and attracted over 2000 attendees from more than 50 countries around the world.

Our Crescent Ethical Account is available to people who choose our Personal Investment Account (PIA) or Private Investment Management Service (PIM). That is, people who have $100,000 or more to invest. While it appeals to observers of Islamic law, any investor seeking a professionally managed, customised portfolio driven by strict ethical and moral regulations can invest.

 

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