As a practicing Muslim, Ansari wanted to make sure his investments were halal, meaning that they followed Islamic rules. But there was little on offer that adhered to the principles of halal finance, which for him centre around fairness and equity.
“I still think there's this tremendous room for growth right now” for halal financial products, said Ansari. Islamic finance operates on the principles of profit and risk sharing, said Khaled Sultan, a senior wealth advisor and portfolio manager at CIBC. While adherence to the rules varies, and some of the minutiae of halal finances may be disagreed upon by scholars, there’s no disagreement over the core tenets of not investing in specific sectors and not paying or profiting off of interest, he said.
One of the challenges with halal investing has been that traditional low-risk vehicles like bonds weren’t allowed because of the rule about interest, said Sawwaf. As a result, many of the funds available earlier on were higher-risk, he said. The next frontier Sawwaf wants to conquer is the retail side of finance, with hopes of being Canada’s first full-service halal financial institution.
But a lot has changed since 1999. While firms have been created to meet the needs of Muslim customers, like Winnipeg-based investment firm Canadian Islamic Wealth, mainstream financial companies are also wading in. Wealthsimple launched its halal investment portfolio in 2017, and major insurers like Manulife and SunLife offer Shariah-aligned funds. Halal mortgages have existed in Canada for decades, but today there are far more firms offering them, mostly “mom-and-pop” companies, Sultan said.