Investment of Awqaf funds in shares and stocks : investment of Awqaf funds in stocks

Fatawa Question

AA, Awqaf SA would really appreciate some guidance on this issue : The general norm in the investment of Waqf funds is that the corpus ie the capital remains intact. Example : a person donates R 100000 as Waqf. The institution, say Awqaf SA, invests that money into a property equity fund or real estate investment trust (REIT). Reasons : (a) low risk (b) rental income and (c) long term capital growth (d) underlying assets = real estate. The Waqf institution will be entitled to spend the rental income from the REIT on any of its projects in terms of the wishes of the donor. Another scenario : the funds are invested in a general equity fund. High capital growth but generally lower dividend income, and has a riskier profile. Because the dividend income is low, can the Waqf institution utilise a percentage of its capital growth or say pursue a policy of 50 / 50 eg only spend 50 % of capital growth and retain the balance for any downward movement of share prices. Your advice on the above would be highly appreciated. In fact we are seeking a detailed Shari’ah ruling on the matter both for decision making as well as for academic purposes. Wassalaam

Fatwa

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Publication Date

2006-10-30

Main Subjects

Economics & Business Administration
Islamic Studies

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-790508

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• AMA