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Fatwa CenterInvesting in mutual equity funds
Question
Can i invest in a mutual equity fund where 95% is invested in lawfull sectors and 5% in banking sectors. Kindly respond based on Islamic rulings with Quran and Hadith
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
Investing in companies whose basic transactions are lawful but which partly deal with Ribaa (interest or usury) either when borrowing or lending money is forbidden, according to the most preponderant opinion which is adopted by Islamweb. This corresponds with the decision of the Fiqh Islamic Committee which reads: "In principle it is forbidden to deal with companies that sometimes deal with forbidden transactions, like Ribaa and the like, though its principal activities are lawful." There are many evidences on this, like the saying of Allaah (which means): {O you who have believed, fear Allaah and give up what remains [due to you] of interest.}[Quran 2:278], and the saying of the Prophet 
: "Allaah cursed the one who consumes Ribaa (i.e. usury or interest) and the one who gives it to others." [Muslim].
Allaah Knows best.
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