How halal investing can impact your bottom line

Did you know that Azzad’s portfolio managers start with a smaller investable universe than most conventional money managers? That’s because we apply halal investing or Islamic investment screens to the investable universe before each manager even begins his or her investment process. This screening eliminates nearly all financial and utilities stocks. It also eliminates companies with greater than 30% debt compared to market capitalization, as well as other financial ratios. Halal portfolios are generally more weighted in the information technology and healthcare sectors with little to no exposure to financials. As a result, the performance of a halal portfolio may be different than that of a conventional portfolio. Below is the Dow Jones Global Total Stock Market Index, which is a total portfolio index with exposure to major market sectors. Besides it is an Islamic version of the same index. Although this is not an Azzad portfolio (and it’s not possible for anyone to invest in an index), it can give you an idea of how our products might look in comparison to their conventional counterparts. The most glaring difference between these pie charts is the relatively small exposure to financial services in the Islamic index compared to the traditional