In the recent days, several authors have noted how Islamic bonds have done better than most other bonds in the face of current US economic crash. It is indeed true that most Islamic bonds have done better than the regular ones, but that success should only be attributed to the mix and the fact that current economic collapse took place in an area that is not at all a part of Islamic bonds: banking and finance.

At this point, as money is being injected into financial markets, it is possible that other bonds will do far better than Islamic bonds because of the latter not dealing in financial markets. This is purely based on the fact that money is being heavily injected into other markets. At this point, if Islamic bonds do not do as well, would we then say that the Islamic method is not a good one because the economic gain is not there? No.

The purpose of Islamic bonds is not to have an economic gain better than other bonds, but for them to be ethical investments. Two major investments (among others) that are avoided in Islamic bonds are: 1) investments in financial institutions that deal in interest, and 2) investments in alcohol industry. In the first case, an interest-based transaction is inherently an unfair one, while the latter is harmful for the collective society. (For this reason, some Islamic bonds also avoid dealing in weapon industry stocks.)

Success of Islamic bonds is not the primary reason for their existence and for people investing in them. The primary reason is that they are ethical in nature and operate in areas that are neither unfair to the other party nor harmful to others.