Shariah-compliant ETFs/Mutual Funds containing non-compliant stocks


Very new to investing and I wanted to make sure my money gets invested the right way. I was interested to learn about how ETFs like Wahed’s HLAL and mutual funds like AMAGX are evaluated as Shariah-compliant. Are they evaluated as such due to them receiving certification ?

When I look at their portfolios I see a fair amount of Questionable and non-compliant stocks being held. This makes me wonder how they have received the evaluation of being shariah-compliant.


Welcome to the community, @nas!

To answer your question—it primarily boils down to different screening methodologies. For example, HLAL follows the FTSE Shariah index. You can find out about their methodology here.

At Zoya, when a fund like HLAL or AMAGX receive shariah certification from a reputable shariah advisory board, we will respect that and designate it as “compliant” in our system. However, we’ll still run the fund’s individual holdings through our own screener to provide additional insights for our users. This secondary screening is not meant to supersede the shariah certification itself.