Sharia/Halal Investment Management
Building Your Halal Investment Portfolio
Building Halal investment portfolios has been something we wanted to do for many years, however, there just has not been enough support from the mutual fund community for us to do so with our limited resources. Fortunately, two funds companies, Amana Mutual Funds Trust and Azzad Funds have recently produced what we believe are the bare essential investment building blocks with which we feel confident that we can provide ongoing fiduciary portfolio construction and investment advice for our Muslim clients:
Both of these fund companies screen for:
refers to an increase in capital without any real services provided, or the growth of money by the mere passage of time. Riba is prohibited on both sides of the transaction – giving as well as taking.
means chance, or any financial transaction or contract (such as insurance) which includes an element of chance.
A business or industry. Examples include companies which derive significant income (defined as more than 5% of their total income*) from the processing or sale of alcohol, tobacco or pork. Other prohibited industries are defense/weapons, gambling, pornography and financial firms that charge or pay interest.
They both also assist with the calculation of:
requires that any investment income be given to charity if it may have been generated from activities defined as unlawful according to Islamic investing principles.
the annual sharing of wealth above Muslims’ basic needs.
Currently, we can build these portfolios for our clients who are Asset Management or Full-Service clients of our firm in their IRA, Roth IRA, and After-Tax investment accounts. Unfortunately, these portfolios generally cannot be instituted in most employer plans.
*However, if you are decision maker and have the authority to switch retirement plan providers, we do have a 401k/retirement plan product in which we can build this into your company’s retirement plan.*