Dr. Monzer Kahf, a prominent economist and counselor states: “Funds are money put together by managers to invest in shares and bonds. Therefore, their permissibility depends on their components. For instance funds that invest in bonds are NOT permissible because bonds are interest-based loans.

Investment in shares depends also on the nature of the business of the company and its transactions. Companies whose main line of business is haram such as banks, liquor breweries and casinos are not permissible to invest in. Also companies whose investment are mainly in interest instruments are not permissible too.

In the USA, there are funds that invest only in shares that are compatible with the Shari’ah and there are several funds such as these ones all over the Muslim countries.

Funds that are permissible are also permissible to work in. Working in prohibited funds is permissible provided you do not undertake any prohibited activity yourself, for instance to run the funds IT system is okay.”