New user to Zoya, trying to work on my Halal 401k retirement plan… And I have a quick question please:
If I found an investment/stocks/fund showing the non-compliant ratio over 30%, does this mean it’s not Halal? Or does it mean we can use it and purify it later?
I know that non-compliant stocks will have a red flag on it says this xxx is (shariah non-compliant), but what if there’s no red flag and there’s already some shariah compliant ratio? Would it still be Haram cause the non-compliant is over 30%? Or did Zoya already filtered out all of the Haram investments before it shows those ratios?
An example of such stocks is attached…is it halal or haram?
Assalaamu Alykum Hisham! Welcome to the community. Great to have you with us here.
I think there’s a bit of confusion here between stocks and funds. The Shariah compliance screening that we do at Zoya (learn more in our FAQ here) is for stocks. The listing you’re looking at in the screenshot is for a fund, which is a collection of stocks. Check the screenshot below.
As for whether the funds are Shariah compliant or not, at the moment, there is no methodology like that described by AAOIFI, so help us know if the funds are compliant or not. There are some funds that are certified shariah compliant by 3rd party institutions, and they’re described as such. Hope that helps.
Thank you so much Farhan for the clarification, I do need to work on my economic illiteracy cause I do confuse a lot of such basic terms…
Now I can see that funds don’t have a clear way of evaluating, but in this case, how can I utilize the complaint and non-compliant ratios shown in the screenshot example I have? MEFZX and SASMX are the only 2 funds I found in my company’s 401k plans that do have shariah-compliant ratios but both them have over 30% non-compliancy ratio, so are those Halal or Haram to use for my 401K? I mean, Zoya did manage to show some shariah complaint ratios over there, there gotta be a way to tell if it’s fall within Halal range or not…
Forgive my illiteracy and jazakom Allah khairan for helping me out…
I’m very happy you asked that question. I can see how it can be confusing and this is absolutely the space to be able to ask questions like that. Please continue to use this forum in this capacity. Everyone starts somewhere.
Investing ina 401k is tricky because we’re often in a situation where we need to make the best of a limited situation. Check out this blog post if you haven’t already.