Since mutual funds do not guarantee any fixed returns, can moslems invest in them?
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Invest in mutual funds
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Your Question: I would like to know if it is halal to invest in mutual funds
Beloved brother, provided the stocks of the companies which are held by the ‘mutual-fund’ do not indulge in dealing in what has been specifically declared as ‘haraam’ and unlawful by Allah and His Messenger (saws) (like alcohol, interest, gambling, prostitution, etc.); then obviously there is absolutely no harm if a believer wishes to invest in such ‘mutual funds’.
But if the companies whose stocks are held by a ‘mutual-fund’ deal or transact their business in a commodity which is unlawful in Shariah, then it would be unlawful and haraam for a believer to invest in such ‘mutual-funds’, regardless of his reasons!
If one amongst the ‘mutual-funds’ do not guarantee a fixed return, that by itself would not make it lawful for the believers to invest in it; for if the primary commodity of the companies whose stocks are held by the ‘mutual-fund’ conduct their business in a ‘haraam’ or unlawful product, regardless of whether it offers fixed returns or not….to invest in such a ‘mutual-fund’ would be unlawful for the believers who sincerely fear Allah and the Last Day.
Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.
Your brother and well wisher in Islam,