Continuation
A comparison of ethical and Islamic investments
Asset universe
Ethical investment – A limited number
of securities that fulfil the pre-determined ethical criteria
Islamic investment – Limited to Shari’ah-compliant
securities only
Investment support
services
Ethical investment – Requires the
following:
1. An ethics board that
screens, monitors and makes decisions on the admissibility or withdrawal of
securities;
2. A research team that
identifies potential securities and monitors fund performance.
Islamic investment – Requires the
following:
1. A Shari’ah advisory
board that screens, monitors and makes decisions on the admissibility or
withdrawal of securities (note that this may also require a Shari’ah officer
who supervises and monitors Shari’ah-compliancy);
2. A research team that
identifies potential securities and monitors fund performance.
From the research paper of
European Central Bank
(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho,
B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)
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