Investors with an eye on the Islamic world have witnessed parallel growth in two industries serving Muslims worldwide: halal products and Islamic finance.

Halal — Arabic for “allowed” — signifies a product created in adherence with Islamic guidelines. Halal products are spread across several industries, including foodstuffs, cosmetics, fashion and health care. Islamic finance is banking that follows Muslim precepts, such as the banning of interest on savings and loans.

Intended to serve more than one billion Muslims across the world, both markets boast compelling figures. Global Islamic finance is now considered to be a nearly $1 trillion industry, while as of last year, the worldwide halal market was worth an estimated $630 billion. That includes Europe and North America, which account for 12% of the global halal market.

The growth of these industries has spurred some investors to develop new financial products that combine bits of both, including halal food indices and equity funds. In April, the SAMI Halal Food Index was launched, while in August, Malaysia-based OSK-UOB Islamic Fund Management started the Global Food Islamic Equity Fund.

There are already numerous Islamic funds and indices for Muslim investors, such as the Dow Jones Islamic Index, that shun companies engaging in anything un-Islamic — such as the production of alcohol — and carry a low level of debt and interest earnings. But Rushdi Siddiqui, SAMI Halal Food Index chairman and global head of Islamic finance for Thomson Reuters, noted in a statement that the SAMI index specifically targets investors wanting a piece of the halal market’s growth. “Why not create a halal food index that captures those companies, and have it available for all investors?” Siddiqui asked. “A Halal food index would build bridges to Muslim investors [and] generate Sukuk (Islamic bond) issuance for financing halal food companies, and the money [would stay] in Muslim countries for the development of the halal food industry.”

According to Md Noor A. Rahman, chief executive officer of OSK-UOB, growing pressure on foodstuffs availability has provided investors an opportunity to profit. “An increasing global demand for food, coupled with the growth of the halal food industry, [has] resulted in a niche market,” he said in a statement.

But would-be investors in halal should consider some pitfalls, detailed in a May report on the global halal market by the Canadian government’s agricultural department. Overseas companies trying to break into the Western halal market have stumbled over export and logistics costs, and have lost savvy customers to bad packaging and labeling, the report notes. The halal market is also fragmented because of different Muslim sects, income disparities, ethnicity and several other factors, requiring a local approach rather than a one-fits-all scheme. Additionally, “consumers may lose confidence in the product’s halal status,” the report warns. “It is important to ensure that halal certification comes from a reputable body. Halal status should be preserved, not misused. If consumers lose confidence in the product’s halal status, they will not continue to buy it.”

There is also the reality that halal products can sometimes cause public relations issues for retailers in the West, because a Muslim association with a product or service could alienate some customers. In August, Whole Foods was forced to do an about-face and apologize after the company sent an email to its stores instructing employees not to mention Ramadan, the Muslim holy month, in conjunction with the promotion of a halal food line on its shelves.