HALAL INVESTING 101
THREAD
THREAD
1. STOCKS & SHARES
Potentially Shariah-compliant
Requires two types of screening:
1. business activity screening to ensure the business is halal 2. financial screening to ensure that interest borrowing and savings are minimal (<30%) and that any impure income is less than 5%.
Potentially Shariah-compliant
Requires two types of screening:
1. business activity screening to ensure the business is halal 2. financial screening to ensure that interest borrowing and savings are minimal (<30%) and that any impure income is less than 5%.
2. BONDS
Not Shariah compliant
These are interest-bearing loans.
Not Shariah compliant
These are interest-bearing loans.
3. LAND
Potentially Shariah-compliant.
The T&Cs, financing and structure must be shariah-compliant.
Potentially Shariah-compliant.
The T&Cs, financing and structure must be shariah-compliant.
4. PRIVATE EQUITY
Potentially Shariah-compliant
Requires two types of screening:
1. business activity screening to ensure the business is halal 2. financial screening to ensure that interest borrowing and savings are minimal (<30%) and that any impure income is less than 5%.
Potentially Shariah-compliant
Requires two types of screening:
1. business activity screening to ensure the business is halal 2. financial screening to ensure that interest borrowing and savings are minimal (<30%) and that any impure income is less than 5%.
5. RETAIL FOREX
Not Shariah compliant.
Real currencies are never traded. Involves interest &
non-compliant leverage.
Not Shariah compliant.
Real currencies are never traded. Involves interest &
non-compliant leverage.
6. OPTIONS & BINARY OPTIONS
Not Shariah compliant.
Options involve Riba, Gharar and Maysir.
They are Zero-sum games.
Not Shariah compliant.
Options involve Riba, Gharar and Maysir.
They are Zero-sum games.
7. FORWARDS AND FUTURES
Not Shariah compliant.
They have Gharar and irregular contractual forms.
Not Shariah compliant.
They have Gharar and irregular contractual forms.
8. CONVENTIONAL SAVINGS ACCOUNTS
Not compliant.
These savings accounts have interest. One should have a Shariah compliant savings account instead.
Not compliant.
These savings accounts have interest. One should have a Shariah compliant savings account instead.
9. CRYPTO-ASSETS
Potentially Shariah compliant.
Type of crypto & underlying asset/
utility needs to be reviewed. Security token needs
screening.
Potentially Shariah compliant.
Type of crypto & underlying asset/
utility needs to be reviewed. Security token needs
screening.
10. CONVENTIONAL INDICES
Not Shariah compliant.
Shariah compliant tracker fund required.
Not Shariah compliant.
Shariah compliant tracker fund required.
11. DEFINED CONTRIBUTION PENSIONS
Potentially Shariah Compliant
Must be invested in a Shariah compliant fund.
Potentially Shariah Compliant
Must be invested in a Shariah compliant fund.
12. COMMODITIES
Not compliant.
Most commodities are traded using CFDs, futures and swaps. No real ownership.
Where a precious metal is traded with ownership and possession, it will be permissible like @TheMintedApp
Not compliant.
Most commodities are traded using CFDs, futures and swaps. No real ownership.
Where a precious metal is traded with ownership and possession, it will be permissible like @TheMintedApp
13. CFDs
Not compliant.
Subject matter not recognised in Shariah.
Involves Riba.
Not compliant.
Subject matter not recognised in Shariah.
Involves Riba.
14. MUTUAL FUNDS
Potentially compliant.
The fund must be reviewed for Shariah compliance and the underlying assets need to be screened.
Potentially compliant.
The fund must be reviewed for Shariah compliance and the underlying assets need to be screened.
15. ETFs (Exchange-traded Funds)
Potentially compliant
Must be certified. Not synthetic, or with
non-compliant equities.
Potentially compliant
Must be certified. Not synthetic, or with
non-compliant equities.
16. ETCs (Exchange Traded Commodities)
Potentially compliant
Must be physically backed, ownership of
commodity & not futures-based.
Potentially compliant
Must be physically backed, ownership of
commodity & not futures-based.
17. ETNs (Exchange Traded Notes)
Not compliant
Generally structured using Swaps.
Not compliant
Generally structured using Swaps.
18. SWAPS
Not compliant
No ownership of the underlying asset.
Not compliant
No ownership of the underlying asset.
19. COLLECTIBLES
Potentially compliant
Ownership & possession of collectIble
required.
Potentially compliant
Ownership & possession of collectIble
required.
20. SUKUK
Potentially complaint.
Needs Shariah certification.
Potentially complaint.
Needs Shariah certification.
21. CROWDFUNDING
Potentially compliant
Subject to T&Cs & structure. Interest-based not compliant.
Potentially compliant
Subject to T&Cs & structure. Interest-based not compliant.
22. PROPERTY
Potentially compliant
Subject to T&Cs & structure.
Potentially compliant
Subject to T&Cs & structure.
23. RRSP/TFSA/RESP/LIRA/RRIF (For Canadians)
Potentially compliant
Must be Shariah-compliant Fund. Mixed
portfolios have high Shariah non-compliance risk.
Potentially compliant
Must be Shariah-compliant Fund. Mixed
portfolios have high Shariah non-compliance risk.
24. 401k/IRA (For US)
Potentially compliant
Must be Shariah-compliant Fund. Mixed
portfolios have high Shariah non-compliance risk.
Potentially compliant
Must be Shariah-compliant Fund. Mixed
portfolios have high Shariah non-compliance risk.
25. REIT Funds
Potentially compliant
Subject to T&Cs. Tenants' businesses must be compliant [AAOIFI].
Potentially compliant
Subject to T&Cs. Tenants' businesses must be compliant [AAOIFI].
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