Summary: We offer separately managed accounts (IRA, Individual taxable, Joint, Roth, SEP, Trust, LLC) where we invest in the shares of Shariah compliant public companies. Please watch the 20 min video below or read the text below to learn about the specifics of Halal investing.

Halal is an Arabic word meaning lawful or permitted. Halal investing means investing that is permitted under Islamic principles. Halal investing is also referred to as “Shariah-compliant” investing. Halal investing is a form of socially responsible investing.

Shariah guidelines for investment have been defined by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), a global Islamic finance standards setting body, governed by an international panel of highly respected Sharia scholars. 

We look at the universe of available investments (common shares of public listed companies) and run two filters to eliminate non-Shariah compliant investment options. Preferred shares, options, futures, debt instruments (bonds) are avoided. We do not short sell shares

(1) Business filter:

We avoid investing in companies that derive greater than than 5% of their revenue from non-Halal business. These are:

• Interest based businesses such as banks and insurance (Riba)
• Alcohol
• Adult Entertainment / Pornography
• Gambling / Casinos
• Pork products
• Tobacco

(2) Financial filter:

We look at the financial statements of the Companies that remain investable after passing the Business filter.

• Interest bearing debt must not exceed 33% of the company market capitalization (average of last 12 months)
• Interest earning assets must not exceed 33% of the company market capitalization (average of last 12 months)

Companies that fail either filter are not investable. Companies that pass the filters undergo business analysis and fundamental analysis due diligence.

Post Purchase monitoring

Every investment is monitored post purchase to ensure our investment thesis is still valid and it remains an attractive investment on an ongoing basis. The company is also monitored for continued compliance with the Halal screening filters (above). If a company fails the filters at a future date, the investment may be sold.

Investment philosophy: Read our investment philosophy