Shariah Compliant Investments

Grow your wealth without compromising your religious beliefs

“O you who believe, fear Allah and give up what remains [due to you] of interest, if you should be believers”

Al-Quran, 2:278

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What Are Shariah Compliant (halal) Investments?

Shariah compliant investments, also known as halal investments, are financial products and strategies that adhere to the ethical and religious guidelines outlined in Shariah law. These investments ensure that your money is invested in ways that are consistent with Islamic principles, avoiding activities and industries considered haram (forbidden).

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Key Principles of Shariah Compliant Investments

Islamic investment products are guided by core values and principles derived from Islamic teachings, emphasizing ethical investing and socially responsible financial practices. These principles help ensure that Shariah-compliant investments contribute to both financial growth and a positive social impact.

Riba (Interest): Any investment involving interest (riba) is forbidden.
Gharar (Excessive Risk or Uncertainty): Investments with high levels of uncertainty or ambiguity are not allowed.
Maysir (Gambling or Speculation): Shariah prohibits speculative and gambling-like transactions.

Shariah compliant stocks & shares investments strictly avoid activities prohibited by Shariah law, including:

Prohibited Industries in Shariah Compliant (Halal) Investments

Conventional Finance and Insurance (due to reliance on interest-based transactions)
Alcohol Production and Sale
Pork & Non-Halal Food Manufacturing
Gambling
Pornography
Arms & Defence
Tobacco

Certain industries are considered unethical according to Shariah law and are excluded from halal investments. These include:

How Are Shariah Compliant Investments Assessed?

To ensure compliance with Islamic principles, Shariah-compliant (halal) investment funds undergo strict evaluation processes by Shariah supervisory boards. These boards conduct ongoing reviews and audits to ensure continued adherence to Shariah law.

Shariah-compliant investments are assessed through both quantitative and qualitative screening methods:

Quantitative Screening:

This involves applying specific financial ratios and thresholds, such as the proportion of debt or non-halal income, to ensure that a company’s financial structure aligns with Islamic guidelines.

Qualitative Screening:

This focuses on the ethical considerations of a company’s operations. It assesses whether the company’s activities, management practices, and business dealings adhere to the values of Shariah law.