Allah’s ETF

Several companies have been flooding the markets with specialty ETFs, and this has resulted in an explosion of investments that were previously unavailable to most investors.

If you want to invest in natural gas, just buy UNG. Biotechnology companies? Try IBB, and so on. But as these ETF-offering companies have saturated the most obvious investments, they have been competing to attract money by offering more and more obscure investments to the public.

So we have started to see some more unusual investments crop up. Don’t believe in the coming currency collapse? Try your luck with DZZ, it might make you a little dizzy as it moves double the inverse of gold. But that’s nothing compared to Powershare’s PBP – it encapsulates an entire strategy by buying stocks and writing call options against them, giving investors an unbelievably easy route to a very complicated portfolio (for better or for worse).

And so, now even Moslems have their own ETF – although one can imagine that various infidels will also purchase shares. Long eschewing most things financial for religious reasons, there is now an ETF which only invests in companies that adhere to Shariah – that is, traditional Islamic law. The iShares MSCI World Islamic/Shariah ETF (ISWD) is now trading in London.

While somewhat of an oddity as an ETF, it can only benefit the marketplace as a whole when investors are able to better direct the flow of their investments. Specialty “socially responsible” mutual funds have been around for a while, and as their ETF cousins hit the market, investors can look forward to more easily tapping into these unusual investments.

Although we are often cautioned that investing should be done without an emotional component, investors have the right to be as picky as they want with their own money. Since owning shares in a company is fractional ownership in the corporation, it is right that adherents of Islam have easy access to companies pre-screened to not violate their beliefs.