The Royal Bank of Canada (RBC) has announced a new investment opportunity tailored specifically to meet the special requirements of Muslims. Available to Muslim-Canadian customers, the RBC Shariah-Compliant Equity-Linked Note has been introduced after an extensive period of research and consultation, and is supported by a fatwah, confirming its suitability, issued by three prominent Muslim scholars.
The note, which matures in approximately five and a half years, is the first of its kind in Canada, and is designed to provide a competitive investment opportunity compatible with the precepts of Islamic law. RBC protects the capital investment if the note is held to maturity, with potential returns calculated using the percentage change in value of the underlying equity basket.
“Stocks are selected from the Dow Jones Islamic Market Index, avoiding all haram (forbidden) sectors, such as arms, alcohol and pornography,” said Andrew Tice, Middle East regional director of the Royal Bank of Canada. “Until now, Islamic investors had few attractive investment opportunities due to the absence of low-risk investments following Shariah guidelines. With the RBC Shariah-Compliant Equity-Linked Note, they have a capital-secured, Shariah-compliant opportunity with a high growth potential.”
The Shariah Finance Group at RBC Capital Markets developed the initiative, which has been approved by three independent Shariah scholars. These experts - Sheikh Nizam Yakuby from Bahrain, Sheikh Yusuf Talal DeLorenzo from the United States, and Sheikh Dr. Mohd Daud Bakar from Malaysia - are internationally recognised as authorities on Islamic finance, and between them advise many banks, governments and other institutions. All three are on the Shariah Supervisory Board of the Dow Jones Islamic Market Index.
“At RBC, we don’t believe that investors should lose opportunities to make their capital work for them because of their personal faith,” said Tice. “With the Dow Jones Islamic Market Index tracking Shariah-compliant stocks internationally, we are able to offer Canadian-Muslim investors a potentially high-yield investment opportunity that is compatible with their obligations under Islamic law.”
The minimum investment is Canadian $5,000; investors with a stake of $50,000 or more are offered the free services of personal investment advisor from the experienced team at RBC Dominion Securities. (menareport.com)
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