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Banks cater to expanding Muslim population
A financial firm plans to open an office in Fairfax County in early March to sell mutual funds to the Washington area’s Muslims, joining banks and investment houses that find the growing U.S. Islamic population can no longer be ignored.
Saturna Capital Corp. plans to sell its Amana mutual funds to the Washington area’s approximately 200,000 Muslims who want to avoid violating Islamic law with their investments.
“They’re fairly young, making a lot of money, well-educated and they’re looking for services,” said Monem Salam, director of Islamic investing for Saturna Capital, which also sells funds that have no religious orientation.
The funds invest only in stocks that are Shariah-compliant, which means they cannot invest in the alcoholic beverage, gambling, pornography, tobacco or pork-processing industries.
Islamic law also forbids Muslims from paying or earning interest.
A Washington-area office “gives us access to all the East Coast,” Mr. Salam said.
The Bellingham, Wash., company, which manages $250 million in Islamic investments, is riding a trend among financial institutions to find a niche among the nation’s Muslim population.
Although Census Bureau data is sketchy, government studies and Muslim groups estimate 6 million to 7 million Muslims live in the United States. Other studies, however, have estimated the number as low as 1.6 million. The Department of Homeland Security says the number is rising with immigration from Muslim countries.
The number of financial services is growing with them.
Last summer, Guidance Financial Group said that in just over three years of operation it became the first Islamic financial-services company in the United States to provide more than half-a-billion dollars in home-financing contracts.
The Reston company operates with more than 85 employees in 17 states and the District.
In Ann Arbor, Mich., a bank that has offered special services for Muslims for two years recently formed a subsidiary specifically for them.
University Bank’s new University Islamic Financial Corp. offers deposit accounts that share profits from the bank’s Islamic real estate investments instead of paying interest.
Islamic investments, such as mutual funds, were profitable last year, although few of them are more than 5 years old. The Dow Jones Islamic Market Index for the U.S., which tracks Shariah-compliant investments, rose 5.06 percent in 2005, compared with a 3 percent increase in the Standard & Poor’s 500 Index.
Last year’s performance was an improvement over the U.S. Islamic Market Index’s annualized five-year return of -2.77 percent. The S&P; 500 rose 0.54 percent in the same period.
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