They currently offer a Halal investing portfolio for Muslim investors that consists of 50 stocks in an all-equity portfolio. Wealthsimple introduced the Wealthsimple Shariah World Equity ETF in early 2021. The fund can be purchased in all types of accounts, including TFSAs, RRSPs, RRIFs, and RESPs, but may not be available at all financial institutions.įor passive investors, there are U.S.-listed options like Wahed FTSE USA Shariah ETF and SP Funds S&P 500 Sharia Industry Exclusions ETF, which trade on the Nasdaq and New York Stock Exchange respectively. It invests in equity securities of public companies listed on the Dow Jones Islamic Market Titans 100 Index. Global Growth Assets offers the oldest Canadian Halal mutual fund, the Global Iman Fund. Even derivatives, futures and short-selling may be considered unlawful. Shares of companies that profit from alcohol, interest-bearing businesses, gambling, media, pork, pornography, tobacco, or weapons, and other businesses deemed unethical must be avoided. This means traditional mutual funds or ETFs may be off limits, and investment advisors may need an investment policy statement with strict restrictions and guidelines. Shariah law also guides the types of businesses investors should and should not invest in, leading to a specific set of principles for Halal socially responsible stock market investing. It is an ETF that owns gold bullion stored in HSBC’s vaults in London, and trades on the New York Stock Exchange. Gold is a commonly held, suitable asset class that can be purchased directly and stored in safety deposit boxes or through exchange traded funds like State Street’s SPDR Gold Trust. Some Muslim investors hold higher levels of cash to satisfy their fixed-income allocation, but other options include direct ownership of real estate, land or commodities. Bonds generally have a maturity date and are repaid at a specified price, whereas sukuk may increase or decrease in value at maturity depending on the price of the asset they are based upon. It may be backed by real estate that earns rental income instead of interest from lending. Sukuk pays income to investors as a share of profit rather than as interest. To achieve asset allocation that reflects an investor’s risk tolerance and goals, Muslim investors can consider a fixed-income option like sukuk, which is a Shariah-compliant bond alternative. Instead of earning interest from lending (a bond is a loan from the investor to the bond issuer), a borrower and lender should share in risks and rewards (like investing in stocks). Shariah is the Islamic law that includes guidelines that impact financial decisions for Muslims these include the prohibition of earning interest from fixed-income investments like bonds, which are a common component of an investment portfolio. The Quran is the Islamic text that guides all aspects of Muslim life.