Aviv Fund Management CEO Erez Zadok launched two mutual funds last week that satisfy the requirements of Islamic Sharia law.
The two funds are labeled “Halal,” that is compliant with Sharia. It means they don’t invest in companies that charge interest, such as banks and insurance firms, or in arms manufacturers, or that make or sell pork or alcohol (foods forbidden under Islam), Zadok told Israeli business daily Globes on Sunday.
The 2020 Abraham Accords sparked the idea.
“I said to myself: There’s an agreement with the [United Arab] Emirates, so perhaps we’ll set up a fund to invest in Tel Aviv for residents of the Emirates according to Sharia rules,” Zadok said.
As he researched the topic, he discovered there wasn’t a single Sharia-complaint mutual fund to invest in for Muslims who lived in Israel.
The funds have been enthusiastically received. Banks like the idea because it provides a product for clients who otherwise would not put their money into the banking system.
“The banks estimate that there are nearly 100,000 religiously observant [Israeli] Arabs who operate with an account at the Postal Bank only. They don’t want to be involved in interest and forbidden investments, and so they maintain a current account only,” he said.
Zadok is no stranger to religiously minded funds. He has previously launched “kosher funds” and “ethical funds,” which are similar in concept to those following the now-popular ESG (environmental, social, governance) criteria.
Aviv Fund Management has 300 million shekels (~$78 million) in assets under management.
