I am currently employed for a company that has a 10% 401k match and allows us to customize our investments through fidelity with a choice of over 200 funds, bonds and more. I searched nearly all of the funds and found 5 that had ~5% of the fund containing holdings from non compliant companies. With over 40-70% complaint and some 20-30% questionable due to media streaming services like Apple, amazon etc. if I were to choose to divide my investments in these funds and purify the earnings would this be deemed halal? Or should I skip out on the 401k?
Salam Leena!
We are in the same position as well. Though I haven’t been able to find that many options with our fidelity 401k as you have. Are you doing this through the brokerage link option? I was wondering if the SPUS or similar would be available through brokerage link.
Also would you mind sharing the ETFs or funds that you found with 5% or less non-shariah compliant? I haven’t found those yet and I think that might be the least bad option for our situation with regular purification.
Brokerage Link does have SPUS as well as HLAL and Amana mutual funds. You can’t automatically invest in the ETFs last I checked, only mutual funds that are bought and sold daily at market close, so I have automatic investments into the Amana mutual funds and have sold some to buy those ETFs to diversify.
If you invest in Amana fund then you should be able to buy into the lower fee institutional shares (AMIGX,AMINX) with automatic investments. Otherwise manual purchases of those incur $50 fee (sales are no fee).
Okay so I spoke to a fidelity financial advisor and she said we can open a brokerage account tied to our 401k. I did this and my employer contributions + mine go in here as cash and I choose to save the money or make automated investments and one of them can be AMNA fund.
can you please elaborate a bit more. I called the Fidelity rep. and he did not know what are Halal options mean! how can I get him to do similar job to you?
Just ask if you can open a BrokerageLink account. I have done this through two different employers that use Fidelity. You would then direct 100% of your money to go in there, then separately pick an allocation in BrokerageLink to automatically invest in a mix of AMINX,AMIGX,AMIPX or any other halal mutual fund.
Jazaka Allah Khair for responding and Ramadan Mubarak!
If I may, I should ask who? HR or Fidelity?
background, I tried to ask for the self-direct brokerage account option talking to both (Fidelity and HR) but unfortunately it wasn’t available from my company, at least at the moment. So if this option is different, I will definitely go for it. also, will this option have the employer matching benefit?
BrokerageLink is the self directed brokerage. I’ve been in two different companies that had Fidelity for their 401k and both have this option. I would talk to HR and ask them to set up this as an option with Fidelity. Tell them you have religious values that don’t allow you to invest in a generic index fund.
And yes the company match applies there too. BrokerageLink appears as one of the fund selections among whatever they currently have. It is all well integrated inside the Fidelity website. I’ve come to appreciate it so much that it’s a real factor for me sticking with the company I’m at.
If doing automatic investment in Fidelity yes enter the institutional share ticker symbols. If it works, great, if not then it may not be supported for the type of account or it may differ between employer plans. I would try and see.
Great! Just remember that if you manually buy or rebalance they do charge $50 to buy shares (not sure if that’s for all accounts, you can check). They have an option to exchange shares (sell and buy a different mutual fund) but it isn’t shown in the trading ticket that there is this cost to buy.
Unless you are buying a large enough amount plus long time horizon, you won’t want to manually buy those tickers due to that purchase fee (can do the math to see when it makes sense). There is no sales fee in any case.
In my case, I had regular shares of AMAG/N/PX before I was aware of this, and I started automatic investment in the AMI* versions. Once I had that ticker bought, even though it was just a few dollars worth, I was able to manually sell the AMA* then buy the institutional equivalent. There is no 100K minimum needed at that point. I just had to pay the $50 per transaction. There is a risk of selling then buying it back higher next day, causing a loss, but since I planned to keep it there for many years and the market was calm, I took the chance. Enough time will erase an exchange loss.
Assalamualaikum Br Omar. Can you help me with investing in the halal funds in Fidelity. I just opened my BrokerageLink account a few days ago and am new to all of this. Was looking to make my 401k halal asap. JazakAllahu khair!
