Do you care enough about your belief system? Do you give importance to environmental, social, and governance issues while making any investment decisions? Is there any role of values-based investing in Islamic finance?
Well, a lot of people now are investing in funds that create compelling value for the common good of the communities they serve. Values-based investing has been growing steadily for the past ten years. Now, it is set to surge in the wake of the COVID-19 pandemic.
A few days back, we had covered an interesting beat about a US-based Islamic Robo advisor, called, Aghaz investments. They are planning to offer values-based financial products for anyone wishing to invest based on their personal values. Earlier this week, The Halal Times team had a candid discussion with the CEO of the company, Mr. Khurram Agha, a software guru-turned Islamic fintech innovator about their newly-launched values-based investing product.
So, here is our conversation, which was lightly edited for brevity and clarity.
You have been a technology guy for most of your career. How did you get started with this values-based investing business in 2020?
I have been blessed and am grateful to have had a very successful career in software development, including 17 productive years at Microsoft. I would not trade my career so far for anything, thanks to Allah. Having said that, I have always wanted to contribute to purpose-driven efforts. I am a student of Finance in general and Islamic Finance in particular, and the lack of effective solutions available for Muslims in the US has always bothered me. When I did my MBA from Wharton, I realized how I could combine technology with finance to create FinTech solutions that solve simple and prevalent problems like how to invest and save money according to our beliefs.
Could you tell us a bit about the concept of values-based investing?
We all have values, causes that we support, and beliefs that are important to us. For Muslims, it starts with making sure that all aspects of our lives are guided by Islamic principles. For investing, in particular, we must determine which stocks are compliant with sharia principles, or whether cryptocurrency is acceptable from an Islamic perspective? Values are more than just that though – I believe in protecting the environment and equal rights for all.
Would we support a company that doesn’t do well on such environmental or social criteria? Would we want to invest in such a company? That to me is what we call Values-Based Investing. We have authored blogs and articles on this topic on our website at https://aghazinvest.com.
What was your mission at the outset?
I refuse to accept that a system prescribed by Islam is incompatible with modern financial infrastructure, or that Muslims must compromise their beliefs when it comes to investing and saving money. The fact that there are limited solutions available today is not because the system is inadequate; rather, it is because we as entrepreneurs have not made an effort to launch and grow such solutions. That really is my mission – contribute towards the launch and growth of Islamic Finance globally, so we can all invest and save without compromising our values.
Who are your target customers?
We are starting with the US-based Muslims but plan to expand globally in due course. But really, our customers are anyone who desires to invest without compromising their values and beliefs. If you wish to make sure that your investments are aligned with your values, we can provide solutions for you.
What has been the response so far from your target customers?
Our initial set of customers have provided us with invaluable feedback, and we have been continuously iterating and improving our solution. We have learned that the three most important aspects to our customers are Security and Privacy, Transparency, and Engagement. We are working on all these aspects intentionally to improve our offerings.
How are you reaching out to your target audience?
We are working on a multi-pronged approach to reach out to our customers. There are several million Muslims in the US and we are a very diverse demographic. A single approach will not work to connect with all of our target audience. We have an extensive digital media marketing plan, and we are working through organizations and key community leaders. More details will be shared soon.
Are you planning to expand to other markets as well?
Yes, insha’Allah! We plan to launch and grow in the underserved USA Muslims market through 2021. We intend to expand to other key Islamic Finance markets over the next 12-18 months. We have a prioritized list of markets to launch and provide automated wealth management for Muslims. In some markets, we are planning an organic launch, whereas in others we are discussing partnerships and joint ventures. We will share more details on our plans in due course.