Question:
I listened to a Shiur about stocks and halacha, and I would like to know about the practical issue of investing in “Traife Companies” – namely, that they earn money from forbidden activities and distribute that money to shareholders.
Also, what do you think about investing in index funds, which automatically give you exposure to those “Traife Companies” ?
Thank you.
Answer:
According to a number of poskim including R’ M. Feinstein R’ Vozner and R’ Y. Belski zt”l, when someone buys stock in a company, if he has only a minor percentage of shares in the company, and his “vote” isn’t going to make any difference because the company is owned by a majority of non- Jewish owners, that it is not considered as if he “owns” the company. Rather it is looked at as merely as a business deal with the company, that he invested in the company and is making profit from the company, but not from the actual business that the company is doing. This issue comes up in a number of areas, for example, regarding stocks in a bank that lends money to Jews with interest, companies that sell food on Pesach, and companies that deal with non-kosher food. Although there are other poskim that disagree with this, this is the minhag of many. Otherwise it would be problematic to open a bank account, or to take a loan from any bank that is publicly owned, because there are certainly Jews that have shares in it.
Investing in an index etc. fund, where the investor is not the one investing the money, rather that he gives his money to someone else to invest, and that person does the business with the money, then it would be permitted even according to some of the poskim that are strict regarding buying stocks directly.
Sources:
Igros Moshe E:H 1-7, M’bais Halevi Y:D pg. 148, Shulchan Halevi 1-4(1), Minchas Yitzchok 3-1, Commerce and Issurei Hanaah pg. 200-202, Bris Yehuda 30, ftnt.43, Poskim.
