Financial security is part of wellbeing. More Muslims are searching for “halal investing”, “halal stocks” and “halal ETFs” as they look for ways to grow savings without interest (riba) or businesses Islam prohibits. This guide explains the basics.
What makes an investment halal?
Most Shariah-compliant funds and apps apply two kinds of screen, based on standards such as those from AAOIFI:
- Business activity screen – excluding companies whose main business is prohibited, such as conventional banking and insurance, alcohol, pork, gambling, adult entertainment and, often, tobacco and weapons.
- Financial ratio screen – excluding companies with too much interest-bearing debt, cash or interest income relative to their size (limits of about 30–33% are common).
Screens differ between scholars and index providers, so two “halal” funds may hold different companies.
Ways to invest halal
- Halal ETFs. Exchange-traded funds that track a Shariah-compliant index. Examples include SP Funds S&P 500 Sharia (SPUS), Wahed FTSE USA Shariah (HLAL) and Wahed Dow Jones Islamic World (UMMA) in the US, and iShares MSCI World Islamic (ISWD) and HSBC Islamic ETFs listed in the UK. Fees range from roughly 0.3% to 0.75% a year.
- Robo-advisers. Apps that build and manage a halal portfolio for you.
- Stock-screening apps. Tools that check whether an individual share passes Shariah screens and calculate purification.
- Sukuk. Islamic bonds that pay returns from underlying assets rather than interest.
- Halal pensions. Many workplace pensions offer a Shariah fund option – ask your provider.
What is purification?
Even screened companies may earn a small amount of interest. Many scholars advise giving the non-compliant portion of dividends to charity, called purification. Some funds do this for you; apps can calculate it for individual shares.
Questions to ask a provider
- Who sits on the Shariah board, and is the fund independently certified?
- Which screening standard does it use?
- What are the total annual fees?
- Is it regulated in your country (for example by the FCA in the UK or the SEC in the US)?
Find halal investing providers
Compare platforms in our halal investing directory, and read our halal insurance and takaful guide.
Capital is at risk: investments can fall as well as rise, and past performance is not a guide to the future. Fund names and fees are examples only and change over time.
This article is general information, not medical, financial or religious advice. Please speak to a qualified professional about your own situation, and to a qualified scholar about specific religious rulings.
Sources
- Zoya – “Best Halal ETFs” (2026) for fund tickers and fee ranges.
- AAOIFI Shariah Standard No. 21 (Financial Papers – Shares and Bonds).