Can I invest in Tata Ethical Fund for a year?

I am 27 year old. I am a pilot by profession. My query is regarding "Tata Ethical Fund". Being a Muslim I can't go with anything other than a Shariah compliant product. I have about Rs 25 lakh in savings and I need to know if investing this money in Tata Ethical fund for a span of one year would be a good idea? I will need this money after a year and hence my horizon is a year at the moment.
--Sumair Mukadam

There are a few Shariah compliant mutual fund schemes like Tata Ethical Fund, Taurus Ethical Fund and Reliance ETF Shariah BeEs available in the market. However, they are equity mutual fund schemes that invest most of their corpus in stocks. For example, Tata Ethical Fund has invested 96 per cent of its corpus in stocks. Stocks can be extremely risky and volatile in the short term. That is why you should invest in equity mutual fund schemes, including Shariah compliant schemes, only if you have an investment horizon of over five years. Investing in them with a very short-term horizon of a year can be extremely dangerous.


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