[KPGv2]

One presumes it's because a huge amount of its revenue comes from defense contracts, which are haram. Here is n excerpt from the fund's exclusion criteria:

> S&P 500 Shariah Industry Exclusions. The index universe consists of all the constituents in the S&P 500 Shariah, excluding companies classified as part of GICS sub-industries 20101010 (Aerospace & Defense), 40203040 (Financial Exchanges & Data), 40201060 (Transaction & Payment Processing Services).

[throwaway2037]

That is wild. Saudi Arabia which is governed by sharia law spends about 7% of its GDP per year on its military. I had no idea that ownership of defense contractors is considered haraam.

[KPGv2]

There's probably a difference between investing in your own vs in another entity's. In Islamic finance, you aren't allowed to just invest money. You're supposed to have some kind of leadership/skin in the game. like shared ownership. I vaguely recall this from a course I took in law school and I thought it was nice, but a double edge sword.

There's some academic consensus that one reason Europe was able to leapfrog the Islamic world after being behind technologically and scientifically was that Islamic law around inheritance and finance had specific ways property was to be split up, preventing the growth of large corporations.

Contrast with Europe, where the modern corporation was developed, allowing a business entity to be immortal and be controlled by one person at a time via inheritance in perpetuity (if desired).

The modern corporation could grow significantly larger as a result, leading Europe to greater economic power while inheritance law (uncle gets a share, brother gets some shares, sons get some shares, etc.) led to companies closing up or losing power because of the fracturing of control.

ANYWAY, I know that was a semi-tangent, but after a lifetime of learning to master "finance," to learn there's a whole parallel system out there, and different approaches lead to different social outcomes, was eye-opening.

In Jewish dietary laws, they're allowed to have grape products prepared by Jews, but not by gentiles (hence Manischewitz wine, which is kosher because it's made by Jews, versus most wine made by gentiles).

I wonder if this is the same thing: investing in your own military is fine, but investing in defense that is not specifically yours is not.

[DaedalusII]

opinions vary, but this was the opinion adopted when formulating this index

it probably makes it easier to ship in europe where some private banks and pensions (eg denmark gov) ban defence investment

[throwaway2037]

    > and pensions (eg denmark gov) ban defence investment

I Googled about this. Here is what I found:

    > June 26 (Reuters) - Danish pension fund AkademikerPension has lifted a self-imposed ban on investment in six of Europe's largest arms makers and some smaller groups, it said on Thursday, citing a worsening security situation and the need to boost European defences.

In short: Not any more.

Ref: https://www.reuters.com/sustainability/society-equity/danish...

[throwaway2037]

    > the opinion adopted when formulating this index

You raise an excellent point. I did a little bit of Googling and discovered:

    > S&P Shariah indices ... are overseen by an independent Shariah Supervisory Board consisting of a panel of internationally renowned Islamic scholars. This board is facilitated by Ratings Intelligence Partners, a London and Kuwait-based Islamic finance advisory firm.

Ref: https://www.ratingsintelligence.com/

[KPGv2]

I wonder if these Islamic scholars are scholars or "scholars"

Like how major churches in the US are overseen by "Bible college" graduates whose qualifications are basically "charismatic enough to get VC funding and attract loads of the most superficial of Christians searching for Biblical justification for their bad behavior"

(Not to suggest that there's a religion that is perfect, but when I sit in on a megachurch service that is transparently justifying child rape by Trump, and advocating that the Bible requires us to support Palestinian genocide, and the pastor went to a two-year Bible school but looks fucking cool like right out of a rock n roll photo spread, it's hard to equate that morally with, say, dorky-ass 70yo episcopalians and the occasional sins of leadership)

[throwaway2037]

I found the board members here: https://www.ratingsintelligence.com/shariah-supervisory-boar...

It looks legit to me.

[riffraff]

thanks for the explanation and digging up the exclusion criteria.