Muslim Voices — Finance
0:00:06:>>ROSEMARY PENNINGTON: Welcome to Muslim Voices. I'm your host, Rosemary Pennington. One of the most famous scenes in the New Testament features Jesus in the temple in Jerusalem. He's angry with moneylenders there so he flips over their tables and tells them to get out. The money lenders get called out by Jesus because they were taking part in the biblical equivalent of loan sharking. They were gouging Jews who were buying sacrifices or changing money - very unethical and very un-Islamic as well. In Islam there is a strict prohibition against Riba, the charging of interest. Partly because of this, an entire industry has sprung up called appropriately Islamic finance. Monem Salam is the vice president and director of Islamic investing for Saturna Capital. I had the chance to talk with him about just what Islamic investing is.
0:01:01:>>MONEM SALAM: So Islamic investing or Sharia compliant investing is basically where you make investments according to the Sharia law. And there are certain things that Muslims according to God have been forbidden from doing - for example, drinking alcohol or gambling or those type of things. And so what investing does is - the Islamic investing does is put your investments in line with your faith. So it's basically like a subsection of faith-based investing. So what we specifically do is like other faith-based investments, we avoid companies that have primary revenues in alcohol, in tobacco, in gambling, pornography, pork products. But I think the biggest difference between us and any other faith-based fund is that we also avoid banking and financial service companies in line with the prohibition against interest or Riba in the Koran. And so I think that's what makes us more unique than all the other funds that are out there.
0:01:58:>>ROSEMARY PENNINGTON: I think a lot of people when they think of investment are thinking of people who are going out there and sinking their money in someplace with the idea that they're gonna become insanely wealthy at one end of it. Is that a goal of what you do or is it different?
0:02:10:>>MONEM SALAM: Yeah. It's actually a little bit different than that. I mean, I think that - you know one of the things that's very, very important is that the sustenance or the wealth that you have in this life is not directly proportional to how hard you work. It's actually something that's given by God. And so whether you're you know ultra wealthy like Bill Gates or you're ultra poor like anybody - most majority of the people in the world, that's not indicative of how hard you work. But that's on what Allah has given you. And so based on that, there's nothing wrong in Islam with having a lot of money. However once you have it or if you don't have it, there are certain responsibilities that you have to have. You have to be a good financial steward of the money that you have. So for example, earlier today I was giving the sermon and it was about good financial stewardship. And what I talked about was is that there's a responsibility on a Muslim not to be extravagant and show off with the wealth that they have but at the same time not be miserly with their wealth also. There are certain people that are owed. It's not only your wealth. It's actually a trust given to you. And you have to give back. Part of it is your family. Part of it is the community. Part of it is the less fortunate. And all of these things are there. So I think the mere aspect of having wealth is not a sin. It's a matter of how you manage your money when you are given that wealth.
0:03:25:>>ROSEMARY PENNINGTON: How large of a market is there for this?
0:03:27:>>MONEM SALAM: I think as far as the market is concerned, obviously the Muslims in America are fairly small. But I think what we've been able to do successfully is to be able to cross over from just the Muslim market into average American market. Eighty percent of our investments actually are coming from non-Muslims.
0:03:44:>>ROSEMARY PENNINGTON: Oh. So you have non-Muslims who are coming to your agency as clients?
0:03:47:>>MONEM SALAM: They're non-Muslims that are buying into our funds and investing in the Islamic Amana mutual funds purely based on either returns, on the ethical criteria behind it, those type of things. So it's not a purely a Muslim market. And we, from the very beginning, have never thought ourselves as having competitors only in the Islamic investing arena. Our competitors have always been a Fidelity or Vanguard because a Muslim has a choice not only for Islamic investing or not but also what's the best fund for my investments.
0:04:19:>>ROSEMARY PENNINGTON: What kind of companies do you invest in?
0:04:22:>>MONEM SALAM: Fairly large companies. A lot of them are very familiar with - to a lot of people - pharmaceutical companies like Bristol Myers Squibb or Pfizer, you know, biotech companies like Genentech or Amgen. We have you know oil companies like Exxon or Chevron. We have mining companies pretty much across the board. When we do the Islamic screening, it still leaves about 50 percent of the investable universe still available for us to invest. So it's very easy to get diversification within even the Islamic criteria.
0:04:52:>>ROSEMARY PENNINGTON: Is there anything different that you do with the amounts of money you put in places?
0:04:56:>>MONEM SALAM: No, there's not. The only thing that we do watch for is when it comes time to vote for shareholder approvals on different things, we do watch for those shareholder votes and stuff like that that are un-Islamic. But we don't - we're not activists. We're not out there to change the company. We're there to be able to invest in a company that will make money and then get out if they're not making any money. So we're not an activist kind of a fund, and we don't intend to be in the future. That's really not what Islamic investing is. It's basically just following your religious obligations when making investments.
0:05:30:>>ROSEMARY PENNINGTON: Monem Salam is the vice president and director of Islamic investing for Saturna Capital. He was also featured in the film "On a Wing and a Prayer - An American Muslim Learns to Fly" shown on PBS stations around the U.S. last year. This has been Muslim Voices, a production of the Voices and Visions project in partnership with WFIU Public Media from Indiana University. Support comes from the Social Science Research Council. The music was provided by animus. Muslim Voices is now on Twitter and Facebook, and you can subscribe to our podcast in iTunes or join the discussion at our blog, muslimvoices.org.