Taurus Ethical Fund

Taurus Ethical Fund 
(An Open-Ended Equity Oriented Scheme)
Taurus Ethical Fund from Taurus Mutual Fund is India's First Actively Managed Equity Oriented Shariah Compliant Diversified Fund.

The investments in this fund are based on the fundamentals of Shariah or Shariat, which are guided by the Islamic investment philosophy which invests in companies based on certain screening norms. Managed by seasoned Investment Professionals from Taurus Mutual Fund.

What is the Taurus Ethical Fund?
Taurus Ethical Fund is an Open Ended Equity Oriented Scheme that will invest in companies which are in compliance with the Shariah norms. The scheme will primarily invest in Equity and Equity related instruments. The fund is Actively Managed and invests in diversified portfolios.

What is Shariah?
Shariah or Shariat based investments are guided by the Islamic investment philosophy which invests in companies based on certain screening norms. It is based on the fundamental principles of justice, transparency, common interest and public need.

What is the investment objective of the Taurus Ethical Fund?
To provide capital appreciation and income distribution to unitholders through investment in a diversified portfolio of equities, which are based on the principles of Shariah.

What is the investment strategy?
The corpus of the Scheme will be invested in the companies which are based on the principles of Shariah whereby, it is not permissible to acquire the shares of Companies providing financial services on interest like conventional banks, insurance companies or the companies involved in some other business not approved by Shariah, such as companies manufacturing, selling or offering liquors, meat, or involved in gambling, night club activities, pornography etc. The Fund Manager and his team will identify the stocks for investment from the stock universe available from S&P CNX 500 Shariah which is the benchmark index for this scheme.

What are the features of Taurus Ethical Fund?

	1st Actively Managed Shariah Compliant Fund in India
	Will invest only in Listed Indian Stocks
	Uses S&P CNX 500 Shariah Index as the Benchmark Index
	The Fund allows a socially responsible form of investing and offers adequate diversification
	The Fund follows diligent and disciplined investment process with adequate risk controls

Why should one invest in Taurus Ethical Fund?

	First-time opportunity for the discerning investor
	Managed by a professional investment team and back tested for performance
	Large universe of Shariah compliant stocks
	Actively Managed Fund
	4 out of 8 quarters, the S&P CNX 500 Shariah Index has outperformed the S&P CNX 500 Index in calendar year 2007 & 2008
	The fund is also open for subscription to specific overseas investors
	Repurchase of units by the scheme

Who should invest in this fund? 
Investors looking for suitable investment opportunities that comply with Shariah norms should look to invest in the Taurus Ethical fund with a Medium to Long term investment horizon. It is a socially responsible form of investing. It is a suitable form of investing for people opposed to alcohol, gambling and other addictions.

500 Shariah Index will be used as the benchmark for comparing the performance of this Scheme.

What would be the Shariah screening process?
Stocks will be screened using two main criteria - Sector based screens and Accounting based screens. Companies that are found to be non-shariah compliant are screened out. Accounting based screens involve studying the structure of the business under 3 aspects - Leverage Compliance, Receivables & Cash Compliance and Revenue Share from Non-Compliant Activities.

The stocks would be screened through S&P criteria and then the filtered list would be then evaluated by the fund managers to ensure that the short listed companies are Shariah compliant. This way screening and cross-checking will make the scheme quite rigorous in its compliance.

Which sectors are excluded?
Banks and financials are excluded. Business activities related to Pork, Alcohol, Gambling, Pornography, Tobacco etc are also excluded.

What is the bench mark index for this fund?
The benchmark for Taurus Ethical fund is S&P CNX 500 Shariah Index. The indices have a base date of 1st January, 2007 with history back to that date, as well

How is the Taurus Ethical Fund different from other Shariah Funds?

	Taurus Ethical Fund is the first Actively Managed Shariah Compliant Equity Fund in India.
	Taurus Ethical Fund is the only actively managed Shariah Compliant Fund in India, which gives it the possibility to outperform the benchmark index - S&P CNX 500 Shariah Index
	This fund does not require a Demat account for investment.
	Taurus Mutual Fund will repurchase the units, when an investor wants to redeem their units. more details click here

Sharia compliant Secura India Real Estate Fund launches second scheme

Secura India Real Estate Fund, the first Sharia compliant venture capital fund has launched its second scheme of real estate fund with a size of Rs 50 crore. It is promoted by Kozhikode based by Secura Investment Management (India) Pvt. Ltd. [Source]

Islamic Finance in India

Secura, a SEBI-registered real estate venture capital fund has been certified as India’s first Shariah compliant real estate VCF. This fund was formed as a contributory trust under the provisions of Indian Trust Act, 1882. The trustee of the Fund is IL&FS Trust Company Ltd. The Shariah certification of the fund is done by Taqwaa Advisory and Shariah Investment Solutions (TASIS). [Link]

Misconceptions About Islamic Insurance and Takaful

Misconception no 1:

Risk Protection (insurance) is against Tawakkul - total dependence upon Allah (swt). 

No human actions change the Will of Allah (swt) for our destiny. Whether a person has insurance/Takaful or not has no effect on future events. However, we are instructed to take precautions and then fully trust and depend upon Almighty Allah (swt): in Hadith narrated by Anas bin Malik when an Arab Bedouin asked Prophet Muhmmad (PBUH), "Shall I leave my camel untied and seek Allah's protection on it, or should I tie it?" The Holy Prophet replied, "Tie your camel and then depend upon Allah (swt)." {as quoted by Sunan Al Tarmizi, 1981,}.

Read more: Link

Islamic Finance E-Book for Professionals

Ethica Launches 700 Page Islamic Finance E-Book for Professionals

What Are the Benefits of Islamic Finance?

History of Usury Prohibition

Abstract  : Usury - lending at interest or excessive interest - has, according to known records, been practiced in various parts of the world for at least four thousand years.  During this time, there is substantial evidence of intense criticisism by various traditions, institutions and social reformers on moral, ethical, religious and legal grounds.  The rationale employed by these wide-ranging critics have included arguments about work ethic, social justice, economic instability, ecological destruction and inter-generational equity.  While the contemporary relevance of these largely historical debates are not analysed in detail, the authors contend that their significance is greater than ever before in the context of the modern interest-based global economy.
A Short Review of the Historical Critique of Usury by Wayne A.M. Visser and Alastair McIntosh

Infrastructure crisis in India and Solution

At the end S A Aiyer in his article conclude that "Infrastructure now faces a huge funding gap of hundreds of billions of dollars. This cannot be filled by additional government funding. The government is already struggling to contain a huge fiscal deficit. Any spare cash will go to pre-election goodies, not projects.
So, infrastructure is being starved of both private and public sector funds. India's future growth is in danger. Urgent measures are required to make the sector viable and capable of attracting capital."

This is one of case where ethical banking system can solve the problem by using the instrument called , Sukuk (Islamic bond), which mainly used for funding infrastructure projects.


What is Sukuk?

A secure return through an ethical investment.

Sukuk commonly refers to the Islamic equivalent of bonds. However, as opposed to conventional bonds, which merely confer ownership of a debt, Sukuk grants the investor a share of an asset, along with the commensurate cash flows and risk. As such, Sukuk securities adhere to Islamic laws sometimes referred to as Shari’ah principles, which prohibit the charging or payment of interest.

The emergence of Sukuk has been one of the most significant developments in Islamic capital markets in recent years. Put simply, Sukuk instruments act as a bridge. They link their issuers, primarily sovereigns and corporations in the Middle East and Southeast Asia, with a wide pool of investors, many of whom are seeking to diversify their holdings beyond traditional asset classes. In this way, funds raised through Sukuk can be allocated in an efficient and transparent way to infrastructure initiatives and other deserving projects in the 56 member countries of IDB, as well as communities in over 100 non-member countries. [Source]