QUESTION:

As Salaamu Alaikum,

Wanted to find out in FCB they have an investment name Immortelle Fund which gives out dividends is this account permissible to open? Thanks

ANSWER:

Wa Alaikum As Salaam,

With respect to what you have asked about, I have checked the ‘Amended and Restated Prospectus’ of the Immortelle Income and Growth Fund of FCB, and found the following:-

  1. The Fund invests in Debt Securities that involves receiving returns from interest, which is unlawful in Islam.

Regarding this, the ‘Prospectus’ states, ‘The Fund invests in equity of companies, cash, near cash investments in securities (equity and debt). It further states, ‘The assets of the Fund will be invested in securities and contracts’.

  1. The Fund also invests in fixed interest bearing debt instruments, which are not permissible in Islam. About this, the ‘Prospectus’ states, ‘The Fund (Immortelle Fund) may invest in fixed interest bearing debt instruments such as a bond whose price is sensitive to changes in interest rates’.

From the above information given by FCB regarding the Immortelle Fund, it is clear that returns/dividends generated by the Fund (assets of the Funds) are directly mixed with interest which is unlawful in Islam.

Hence, it will not be permissible to open or invest in such a Fund.

 

And Allah Knows best

Mufti Waseem Khan

19/01/2023