401K Plans for Muslims

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.Question:: What is the best way to invest in a 401(k) plan. Are we allowed to invest if Islamic Mutual Funds are not listed on the Mutual Funds list. How should we convince the Employer to have Islamic Mutuals Funds.Answer: We are not in the best position to answer the first part of your question as we lack the proper financial advisory credentials. If enough company employees request Shari'ah compliant investment vehicles (resulting in respectable amount of assets for Shari'ah permissible management), then the employer will at least take notice of the demands. The key issue is for Muslim employees to begin making these demands, and then to point to the direction of, say, the Dow Jones Islamic Market Index as a universe of Shari'ahcompliant companies from which halal investment vehicles (such as Islamic Mutual Funds)may be created. And Allah knows best.

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