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Islam

Halal Investments in Canada

Some halal investing options specifically for Canadians

“The legal guardian of an orphan should invest the orphan’s inheritance lest it’s consumed by zakat payments.”

The Prophet Muhammad, as reported by Al-Tirmidhi

The aforementioned hadith highlights the following, crucial fact:

Saving and investing go hand-in-hand. By not investing savings, a person is acting irresponsibly as these savings are consumed by zakat payments (and inflation) over time.

Saving AND investing are extremely important. How does one go about doing this? What products are Islamically permissible? What stocks can I buy? Is there an “Islamic bond”/GIC product?

Here are some halal investing options specifically for Canadians. Some of these are available for Americans, too.

Disclaimer: I'm not endorsing or advising you on HOW to invest. I'm sharing some possible avenues. I don't have any financial incentives from any of these products.

Investing in Stocks/Equities

The following is a list of equity-based investment products.

  1. WealthSimple’s Halal Portfolio A basket of stocks based on the MSCI Islamic Series, with good diversity of countries and sectors
  2. Global Iman Mutual Fund A well-established, Canadian mutual fund (comes with a high management fee)
  3. HLAL ETF by Wahed Investments An American-based ETF, comprising entirely of American companies
  4. SPUS ETF An S&P 500 ETF that excludes the non-shariah compliant companies
  5. Zoya App for Stock Screening Want to purchase stocks yourself? The Zoya App does a great job screening for Shariah compliance
Zoya App

Investing in Payment Streams

Payment streams are financial products that give a fixed income to the investor. These include bonds, GICs and REITs (Real Estate Investment Trust). Unlike stocks, the goal of these products is to generate a steady income stream for the investor.

What is an Islamic version of a payment stream product? That would be a Sukuk or a Shariah compliant REIT.

sukuk is an Islamic financial certificate, similar to a bond in Western finance, that complies with Islamic religious law commonly known as Sharia. Sukuk involves asset ownership while bonds are debt obligations. Both sukuk and bonds provide investors with payment streams.

Investopedia

How does a Sukuk product work? Here’s an example:

Take Emirates airlines, for example. When they’re growing out their fleet of airplanes, they can’t necessarily just go out and buy airplanes. They could borrow money, but they’ve chosen to use the sukuk market, where you have a fund with investors who go out and buy the airplane. They then turn around and lease it to the airlines. That lease income basically comes back to the shareholders.

ETF.com
  1. SPSK ETF A ETF of USD-denominated sukuk issued in the global markets
  2. Moya Financial/Aya Financial Term Deposit A term deposit product that invests in Shariah-compliant mortgages
  3. Pine Trail REIT An exceptional REIT with 6% dividends, with investments in the medical centers

By Aarij Anwer

Born in Karachi. Raised in the GTA. AlKauthar instructor. Qutoof CEO. Author. Bookings: contact@imamaarij.com

5 replies on “Halal Investments in Canada”

Thanks for posing this, I’ve been doing a lot of research and found that the Global Iman Fund just got stopped due to some issues with the holdings company. WealthSimple Halal portfolio is good, but I wish they had exposure to the International market – there’s none and its heavily weight to the USA. 3 + 4 strictly USA market.

The London Stock Exchange has better options for shariah compliant funds, unfortunately we don’t have those options here.

Salaam. Any source on the Global Iman fund’s holding company being in trouble?

Kind regards, Aarij Anwer.

Assalamalaikum,
Have you had a chance to look at MANZIL? This is what their website states:
“Manzil is the only provider of Islamic finance in Canada that follows all guidelines for Shariah governance established by AAOIFI, and we have the certifications to prove it!”

Salaam. I’ve looked at them briefly. It seems like they are a broker for third party organizations like Wealthbar. I’m not really sure what their model is (the website obfuscates this).

Kind regards, Aarij Anwer.

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