10d • 🟢 Start Here
The 5-minute primer: What IS ethical/halal investing and where do you start?
If you landed here wondering "what exactly is halal or ethical investing?" — you're in the right place. This post answers the question from scratch.
THE CORE IDEA
Halal investing (also called ethical, values-based, or Shariah-compliant investing) is simply investing that avoids industries and business practices you consider harmful. The Islamic framework has been doing this for 1,400 years — long before ESG funds existed.
The rules come down to four filters:
1. NO INTEREST (riba) — You cannot profit from lending money at interest. This rules out banks, conventional insurance, and bonds that pay interest. Instead of interest, wealth grows through ownership, trade, and profit-sharing.
2. NO HARMFUL INDUSTRIES — Alcohol, tobacco, weapons, gambling, adult content, and pork products are excluded. Not because they can't make money — they do — but because their profits come from harm.
3. NO EXCESSIVE DEBT — Companies that are drowning in debt (total debt over 33% of assets) are screened out. Excessive leverage is seen as financial recklessness.
4. NO DECEPTION — Contracts must be transparent. No hidden fees, no predatory structures.
WHAT THIS LOOKS LIKE IN PRACTICE
A halal portfolio might include:
- Technology companies (Apple, Microsoft) — screened and generally pass
- Healthcare and consumer goods — most pass screening
- Clean energy — generally fine
- Shariah-screened ETFs (SPUS, HLAL, HIWS, MWIM) — pre-screened baskets of stocks
A halal portfolio would NOT include:
- Bank stocks (JPMorgan, Barclays) — core business is interest
- Alcohol producers (Diageo, AB InBev)
- Casino operators, defence contractors
THE 3 TOOLS YOU NEED
1. Zoya app (free) — type any stock ticker and it tells you instantly whether it passes Shariah screening. Uses AAOIFI standards. Available on iOS and Android.
2. Musaffa — similar to Zoya, more detailed breakdown of why a stock passes or fails each filter.
3. A regular brokerage account — Fidelity, Schwab, or Charles Schwab in the US; Hargreaves Lansdown, AJ Bell, or Trading 212 in the UK. The platform doesn't need to be "Islamic" — you just invest in halal assets through it.
YOUR FIRST 3 STEPS
Step 1: Download Zoya. Search for 3 companies you already know (Apple, Tesla, Amazon). See what passes and what fails. This takes 5 minutes and makes the concept real.
Step 2: Look up SPUS (the SP Funds S&P 500 Shariah ETF). This is a Shariah-screened version of the S&P 500 — 500 US companies filtered for ethical compliance. One ticker. Instant diversification.
Step 3: Open a brokerage account if you don't have one. In the US, Fidelity is free, has no minimums, and lets you buy SPUS with as little as $1.
That's it. You don't need to understand everything before you start.
What's your current situation — complete beginner, already investing but want to make it halal, or somewhere in between? Drop a comment below.
0
0 comments
The 5-minute primer: What IS ethical/halal investing and where do you start?
powered by
skool.com/halal-investing-1843
Free community for Muslims learning halal investing. Stocks, ETFs, screening, portfolio building. Real answers, no fluff.
Suggested communities
Powered by