Halal Investments in Canada

“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

Umar and the man who insulted him

A man by the name of Uyaynah came to Madinah during the caliphate of Umar. This man was the uncle of Hurr b Qais, a scholar of Qur’an and one of Umar’s advisers.

Seeing that his nephew was close to the caliph, Uyaynah requested that he introduce him to Umar and arrange a meeting for him.

When Uyaynah enters to meet the caliph Umar – the 2nd greatest companion of the Prophet, the man with an endless list of virtues – he says, “Hey son of Khattab! You don’t give us our right and don’t rule over us with justice!”

Umar got upset and was about to give it to him when Hurr said, “O leader of the believers, Allah told his Prophet (S) in the Qur’an to:

‘خذ العفو وأمر باعرف وأعرض عن الجاهلين – Be tolerant and command what is right: pay no attention to foolish people.’ (7:199)

This man is definitely foolish!”

Umar completely stopped in his tracks after hearing the reminder from the ayah as he always to take the Qur’an’s reminders extremely seriously.

This incident is narrated by Imam Bukhari.

Our connection to the Qur’an has to be a connection that changes our behaviour, even when we’re angry or gripped by emotions. That’s the way of Umar and the sahaba.

Fitna – What Does it Mean?

The Arabic word for trial/test often used in the Qur’an is fitna. What does it mean?

Fitna means to burn something, e.g. in Surah 85:10, “Those who burned the believing men and believing women…”

Fitna also means to put precious metals into the fire to separate the bad from the good, according to the great linguist Raghib Al-Asfahani.

Allah describes the difficulties in life as a fitna because they burn away our sins, just like the fire burns objects. But more importantly, the tests of life are not a mere punishment – though for some it could feel that way.

We are like gold: precious and valuable. But impurities hold us back from our true potential. Tests are a way to bring out the best in us, just like the fire purifies gold.

When a test comes in life, that is an opportunity to return back to Allah. He’s not punishing, He’s treating you like gold.

I want a divorce from my husband.

I want a divorce from my husband. Is that a good thing to do?

How do I go about it? Am I sinful for thinking this? Do I have to stay with him for 3 months? Do I give back my dowry (Mahr)?

Khul’a (الخلع) is the legal Islamic term for a woman requesting and getting a divorce from her husband. This is different than a divorce initiated by the husband, known as Talaq (الطلاق).

Abdullah ibn Abbas narrates that the wife of Thabit b. Qais got a divorce (Khul’a). So the Messenger of Allah (PBUH) commanded her to wait for one menstrual cycle before remarrying. This incident is reported authentically by many scholars including Tirmidhi.

Rabi bint Muawwiz (female companion) got a divorce (Khul’a) from her husband in the time of Uthman. Rabi’s uncle asked Uthman, “Can she leave her husband’s house immediately?”

Uthman replied, “Yes she must. There’s no inheritance between them (i.e. divorce is done). She must wait one menstrual period before remarrying to ensure that she isn’t pregnant.”

From these two incidents (along with the backing of major scholars of the companions like Uthman, Abdullah b. Umar and other later scholars such as Ishaq b. Rahawai, Imam Ahmad, ibn Taymiyyah, etc.) it’s clear that:

  1. A woman can request and get a divorce Islamically (Khul’a) as this was done by at least two female companions. There’s nothing wrong or sinful about it.
  2. The divorce is settled between the husband and the wife. So the wife asks for it and the husband agrees to it…and that’s it. There’s no “Islamic” paperwork. However, in the West, marriage and divorce should always be filed at city hall to ensure the correct legal status.|
  3. The divorce becomes final immediately, so the woman can leave the husband and move on. This is clear from Uthman’s verdict. This is especially important for women who have been abused. I’ve heard imams forcing abused women to stay with their husbands for 3 months to finalize the divorce!! That’s adding to the pain completely unnecessarily.
  4. The waiting period before remarrying is only one month for Khul’a. This is great as it allows a woman to quickly move on with her life, as she should.
  5. The financial terms of the Khul’a are open (if needed). As long as both agree to it, the divorce becomes final. There’s no requirement for the woman to give back her dowry (Mahr) as that is her right. If she chooses to and they agree, that’s acceptable.
  6. Is divorce a good thing? That is not a fiqh question. That totally depends on your circumstances.

Allah knows best.