I am looking to open a islamic or Sharia Lifetime ISA, i have a very limited idea on this, i am struggling to find a fund to open, i found this HSBC Islamic Funds - HSBC Islamic Global Equity Index Fund IC (GBP), wanted to know if anyone has this or offer a alternative.
Wa alaykum salaam
AJ Bell LISA and Hargreaves Lansdown Lisa offer shariah compliant funds.
Allah knows best
As-salamu alaykum Mufti Faraz,
JAK for the reply.
I wanted to explain further my query.
I have a very limited knowledge of ISA or LISA, I rang AJ Bell and they said they dont know which ones are Sharia compliant funds but if i find any online they can check if they do them, they are not allowed to tell me which are as this would be seen as advise and they are not allowed to advise people (which confused me even more), can you please help and identify which ones they do are Shariah compliant.
I found the HSBC one online and asked AJ Bell if they do it they said yes, when i looked further into the HSBC one, its kind of a high risk fund which put me on a bit of an edge and if i dont find any other it will be my only option.
2nd question, After opening the LISA i wanted to invest the money into Sharia compliant shares and stock and my question is will the fund i go for do both?
Please help me find or offer some advise, i hope i was clear in my thoughts, i really want to get it right also this will help me understand this more.
waiting for your reply.
Wa alaykum salaam,
Unfortunately, I cannot offer financial advice. That is beyond my remit and the remit of this forum.
To answer your questions:
The fund you mentioned is a fund which invests 100% in shares. That’s why it’s labelled “high risk” as the stock market is seen as volatile. In reality, if you look at the companies that the fund invests in, they’re some of the biggest names in the world. So it’s for you to determine what high risk means. For me personally, this sort of stocks fund is not high risk as long as you have a long term mindset. But it’s a choice that you have to make as it’s your money and only you know your time horizon with it.
The fund invests in a basket of companies. That basket is deemed to be sharia-compliant. So you’ll get exposure to stocks. If you then want to invest in more companies, you can do that yourself by choosing the companies yourself. You will find on our courses section a course on halal stock screening which may be useful. https://courses.islamicfinanceguru.com/p/a-jargon-free-walkthrough-on-how-to-make-sure-a-stock-is-halal
In addition, you may also find our course on halal investing clears up a lot of your confusion: https://courses.islamicfinanceguru.com/p/halal-investing-for-busy-professionals
According to the KIID ‘HSBC Islamic Global Equity Index GBP IC’ has a one off entry charge of 5.54%. The fund has done relatively well. Looking at the top holdings it appears primarily driven by tech stocks exposure, such as Microsoft, Apple, Google, FB etc.
AJ Bell also offers:
- [iShares MSCI World Islamic ETF USD - LSE:ISDW
- [iShares MSCI World Islamic ETF USD Dist GBP - LSE:ISWD
- [iShares MSCI USA Islamic ETF USD Dist GBP - LSE:ISUS
- [iShares MSCI USA Islamic ETF USD Dist LSE:ISDU
- [iShares MSCI EM Islamic ETF USD Dist - LSE:ISDE
Following are also available, but may have minimum investment amount and/or one off entry charge
- [Aberdeen Standard Islamic Glbl Eq A GBP - FUND:B1CHMW1
- [BNP Paribas Islamic Hilal Income P - FUND:BYTBKW3
- [HSBC Islamic Global Equity Index BD GBP - FUND:BJLVT96
I am invested in HSBC Islamic equity index fund with AJ bell. The entry charge you are referring to is “upto” that can be charged but usually waived. I confirmed this with AJ bell and my subsequent investment showed that it was not charged.
For peace of mind, invest 50/100 pounds to see it yourself.
I’ve just opened an AJ Bell LISA account and tried to buy the “HSBC Islamic Funds - HSBC Islamic Global Equity Index Fund IC (GBP)” fund but I get this error: “This security is restricted from dealing”.
Am I doing something wrong or should I contact AJ Bell?
I decided to call them and I’ve got the answer, alhamdulillah. The IC fund needs to be done over the phone because there is a fx charge but the BD fund can be done on the website which I’ve done.
Salaam brother when you bought the BD fund did you get charged for the entry charge
No. you don’t get charged an entry charge