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Halal investing is becoming increasingly popular around the world. Many investors are now keen to find investments that are ethically sound and comply with Sharia Law but also provide the ability to grow their capital.

If you’re interested in learning more about halal investments UK then you are in the right place.

In this guide, we cover a range of markets that could be considered halal investments UK for this year which are in accordance with Sharia Law. 

Key Points on Halal Investment 

  • Some halal investment UK and international opportunities are in biotech stocks as they typically reinvest capital rather than hold debt, as well consumer cyclical and technology stocks. 
  • Foreign exchange investing is a popular way to find halal investment ideas as many brokers now offer Islamic swap-free accounts which have no overnight interest fees. 
  • Investing in gold and other metals is a traditional way to invest in a manner that is Shariah-compliant. 
  • Brokers such as eToro offer Islamic trading accounts, as well as the ability to purchase real shares for long-term investing. 

Halal Investments UK List

There is a range of assets, sectors and markets to choose from when considering halal investment UK. However, to remain Shariah-compliant you will definitely want to avoid high debt stocks and those involved in gambling, tobacco and alcohol. 

It’s also important to have a longer-term outlook to remain Shariah-compliant rather than looking for speculative short-term moves in the market which are not looked at favourably among Islamic finance scholars. 

Here is a list of what could be some halal investment UK and international options:

  1. Apple 
  2. Microsoft 
  3. Unilever
  4. Rio Tinto
  5. Gold
  6. US Dollar
  7. Bitcoin

You can invest in all these assets using eToro, which offers an Islamic trading account.

A Closer Look at Halal Investments UK

Now let’s take a closer look at the individual markets listed above and why they are considered to be Shariah-compliant and could serve as long-term halal investment UK options. 

1. Apple

Apple is the largest holding in the S&P 500 Shariah Index which means the stock has passed the test of being Shariah-compliant. The S&P 500 Shariah Index measures the performance of Shariah-compliant companies from the existing S&P Index. 

The S&P’s (Standard & Poor’s) team work with London/Kuwait’s Ratings Intelligence Partners which is a team of qualified Islamic researchers who work with the Shariah Supervisory Board which is a board of scholars who interpret business issues and actions for the S&P Shariah-based indices. 

Apple is compliant with Shariah standards because only around 0.77% of its income comes from interest or investments (this needs to be below 5% to be considered halal). The company also passes two of the three debt metrics needed to be considered halal. 

apple price chart

Apple is a suitable option for portfolio allocation as the company produces meaningful products and services that aim to improve our lives. While the stock has been in a long-term trend higher for many years, there have also been some dips along the way which enables the investor to make an investment at lower prices. 

Apple is also one of the biggest holdings of legendary investor Warren Buffett. Fund managers will be keeping an eye out on new product launches this year across its range of products such as the iPhone, iMac and iPad. Rumours of an electric car in the making could also help underpin the strength in Apple’s share price. 

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2. Microsoft

Microsoft is another stock that is considered to be a halal investment UK and for international investors. It is the second-biggest holding in the S&P 500 Shariah Index which means it has passed the suitability test from the qualified Islamic researchers of Ratings Intelligence Partners who work with the Shariah Supervisory Board.

While the gaming and advertising sectors of Microsoft’s business is a grey area from a Shariah perspective, the revenue from non-permissible operating income is less than 5% and the company passes two of the three Shariah-based debt metrics which means Microsoft is considered halal. 

microsoft price chart

Microsoft is another favourite among traders looking for long-term investment opportunities.  The stock has continued to make new record highs for the past several years. CEO Satya Nadella is credited with turning the company into a huge growth stock and is continuing to generate revenue from new sources. 

Microsoft’s market cap is now well over $2 trillion and could be the next $3 trillion stock. Much of this growth has been due to the rise in its cloud computing ecosystem and the launch of more mobile apps. The Microsoft cloud called Azure is now the second-biggest in the world. 

The company has also raised its dividend every year for more than a decade. Dividends are considered to be halal because the payment is from profit rather than from charging interest. The combination of growth and dividends makes Microsoft a suitable halal investment UK and for international investors. If you’re looking for more share tips, you can read our in-depth guide for everything you need to know.  

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3. Unilever

Unilever is a British company founded in 1873 that focuses on consumer goods. They own recognised brands such as Ben & Jerry’s, Wall’s, Comfort, Dove, Cif and many others. The company now counts Asia as its largest market, surpassing the US and Europe over the past few years. 

Unilever is considered to be halal as it passes the debt metric ratio tests as well as income sources that are within the permissible range. The company is considered to be a defensive stock as it produces goods that people need no matter what the economy is doing. 

This means Unilever can often perform well even if the overall economy is doing poorly. It is also why the stock has large institutional ownership. It can act as a hedge and diversification to other growth-based stocks. 
unilever price chart

The Unilever share price did well at the beginning of the 2020 pandemic. However, as central banks cut interest rates, more capital was invested into growth stocks. This led to global stock market indices surging to record highs.

In this scenario, defensive stocks didn’t perform that well. However, with global stock market indices at record highs, there is a concern of a potential dip that would likely benefit defensive stocks like Unilever. 

Unilever is a company with an extraordinary long-term track record in dividend payments. This is another reason why it has large institutional ownership and why many investors are looking to buy Unilever shares. As dividend payments are considered halal, Unilever is considered a halal investment UK for the long term. 

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4. Rio Tinto

Rio Tinto is the world’s second-largest metals and mining company. It produces much of the world’s iron ore, copper, gold, uranium and diamonds. The company was founded in 1873 and its activities of processing natural resources are considered to be Shariah-compliant. 

The mining giant passes all of its tests to be considered a halal investment UK. The company’s income from non-Shariah compliant investments is well below the 5% requirement. 

Furthermore, the company passed all of its debt metric ratios. The balance sheet shows that the debt is well under the 33% allowed under Sharia finance law and the stock has liquidity.  

rio tinto price chart

After the pandemic, Rio Tinto’s share price soared in value. Support from central banks led to a flurry of activity in the construction sector as economies reopened. Supply chain constraints also helped to lift commodity prices which were suddenly in demand. 

However, towards the end of 2021, the company announced a $1.15 billion lithium mine acquisition in Argentina. This had a negative impact on the share price in the short term. Even so, the long-term fundamentals still seem to be intact as the Rincon lithium mine could be the lowest carbon operator in the industry. 

Rio Tinto’s share price is still a long way off its all-time high price levels. But, as economies reopen and grow demand for Rio Tinto’s commodities will increase. There are some concerns in China as the economy is still struggling but over the long-term Rio Tinto is considered a halal investment UK.  

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5. Gold

Gold is one of the oldest forms of investment. There are a variety of ways to capitalise on the rise of the price of gold or to hold as a safety net in difficult times. Not all ways of buying gold are Shariah-compliant. 

Common ways to buy gold include buying gold bullion bars or coins, investing in gold ETFs, investing in gold mining stocks or buying gold CFDs through an Islamic forex trading account

The traditional route is to purchase gold bullion bars, coins or jewellery. This way of investing in gold is halal. However, it is difficult to scale up such an investment as you then need to think about storage costs, safety and insurance. 

Many investors will choose to purchase an ETF (exchange traded fund) that provides exposure to gold. However, many gold ETFs are not Shariah-compliant as some merely track gold futures prices or hold contracts in gold options – two methods that are not halal. 

Gold ETFs that actually hold physical gold are considered to be Shariah-compliant. For example, the iShares Gold Trust ETF aims to track the performance of physical gold and has more than 490 tonnes of physical gold in the trust. 

ishares gold trust price chart

Instead of buying physical gold yourself and worrying about storage, safety and insurance, the iShares Gold Trust ETF provides you exposure to physical gold through its holdings through just one investment. 

The price of gold performed well over the pandemic period. However, in 2021 the price of gold moved sideways as investors preferred the growth prospect of global stock indices. But, with these assets at extreme record highs, there is likely to be more flow into gold as a hedge for a possible decline. 

This is why the iShares Gold Trust is considered to be a halal investment UK. 

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6. US Dollar

The US Federal Reserve is forecasted to increase interest rates three times in 2022. This led to a surge in the US dollar during the end of 2021 and is likely to be a big theme for further upside in 2022.

How you choose to speculate on the direction of the US dollar is the defining factor of whether forex trading is halal or haram. If you have no strategy, no system and trade on an interesting charging account then it is considered gambling and haram. 

However, if you trade with a proper strategy and system, like a professional, and use an Islamic swap free trading account then it is considered to be halal, as there are no overnight interest charges. 

us dollar price chart

The US dollar was one of the world’s strongest currencies in 2021. Inflation was surging higher which led to the Federal Reserve withdrawing their stimulus measures that were enacted during the pandemic. 

The removal of the stimulus measures also brought forward expectations of interest rate hikes – a situation in which the currency usually appreciates. While some of this expectation may already be priced into the move of the US dollar there is potential upside from a long-term global macro perspective. 

As forex trading is considered a grey area, it’s important to focus on long-term investments to avoid being overly speculative. There are some sound fundamental reasons why the US dollar will continue its uptrend. With proper risk management and strategies the skill level to succeed is higher which also makes it halal. 

One thing worth noting is that currencies can be quite volatile as they are influenced by many different factors. Therefore, it’s important to keep the risk small and track of your fundamental analysis. 

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7. Bitcoin

The cryptocurrency market soared to a global market capitalisation of more than $2 trillion in 2021. The launch of the first Bitcoin ETF has brought credibility to some cryptocurrencies. Analysts are forecasting another big year for the cryptocurrency market. 

However, whether cryptocurrency is considered halal or not has been up to much debate. But, in 2018 scholars from the Sharia Review Bureau in Bahrain stated that crypto investments in Bitcoin and Ethereum are permissible under Shariah law and are considered halal. Many Muslim councils around the world have deemed investing in cryptocurrencies to be Shariah-compliant and some mosques in the UK accept cryptocurrency for donations. 

To ensure cryptocurrency investments are halal it is well worth focusing on the coins that actually have real-world value and disregard the speculative coins that have no real-world value. This means sticking to the major coins such as Bitcoin and Ethereum and forgetting about altcoins until they become more meaningful in the world. 

bitcoin price chart

Bitcoin had a volatile year in 2021 but still managed to record two record highs – the first during April 2021 and the current record high from November 2021 around $68,000. Since then, the price of Bitcoin has fallen to around $46,000 – below the psychological price level of $50,000. 

These price levels could represent some interesting options for long-term investors who believe in the underlying blockchain technology and store of value that Bitcoin has. More and more institutions are allowing consumers and investors to buy cryptocurrency which will likely help the demand for coins to increase.

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Platforms to Invest in Halal Investments

Choosing the right trading platform is essential to remain Shariah-compliant. When buying halal investments you also want to make sure you are using the correct halal trading products to do so. 

For example, you want a broker that provides the ability to buy real stocks and shares and the ability to trade instruments through an Islamic swap free account so there are no overnight interest payments. 

Let’s have a look at two platforms and brokers to invest in halal investments UK. 

1. eToro

eToro is a broker for halal investments as they provide access to an Islamic swap free trading account AND you can buy real stocks and cryptos for long-term investments. More than 23 million people around the world use eToro with the number of users increasing exponentially every day. 

The eToro Islamic account also you to trade with no Riba, or interest payments when the market closes. Traditionally, when trading positions are kept open till the next day, brokers will charge interest. The eToro Islamic account offers the following features, making it a halal way to trade:

  1. No interest is charged on contracts lasting more than 24 hours allowing for zero rollover interest.
  2. No additional rollover commissions for contracts lasting longer than 24 hours.
  3. Zero commissions or fees for account management (revenue is only taken from the spread which is the difference between the buy price and the sell price).
  4. Interest-free leverage is provided.

Another major benefit of using eToro is the fact they are heavily regulated around the world by well-known regulators such as the Financial Conduct Authority (FCA), CySEC, ASIC, FINRA and others. This provides a strong peace of mind and security that client funds are stored safely and that there are proper risk management controls in place. 

etoro platform

With eToro you can trade on more than 2,400+ global markets including stocks and shares from the US, UK, Europe, Asia and the Middle East. Furthermore, you can invest in these companies by purchasing real shares, thereby making the process halal. 

You can also buy stock CFDs, however, this would be considered haram unless you purchased them through an Islamic swap-free account which eToro does provide. You can also invest in stocks from both of these accounts 100% commission-free. 

eToro also provides you with the ability to invest in other asset classes such as commodities, indices, currencies and cryptocurrencies. In fact, through the eToro Money Crypto Wallet, you can buy, store, send and transfer a wide range of cryptocurrencies. 

etoro platform research

The eToro social trading platform also allows you to copy other profitable traders and investors at the click of a button. The CopyTrader feature allows you to view the historical performance of other traders and if you like their results you can get the same trades copied into your own account helping to create a diversified portfolio like investment funds. 

Opening an account can be done in just a few minutes and you only need $10 to get started.  

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2. AvaTrade

avatrade-logoAvaTrade is another CFD broker for halal investments UK as they provide access to an Islamic swap-free account that operates under Shariah Law. When trading foreign exchange for more than 24 hours there is a payment required called swaps. These are interest payments that are prohibited under Sharia Law. 

An Islamic account is not subjected to any special fees or interest ensuring it complies with Sharia Law. With AvaTrade, you can trade on more than 1,250+ global markets covering forex, stocks, bonds, indices, ETFs and commodities. Cryptos and some FX instruments such as ZAR, TRYI, RUB and MXN cannot be traded from the AvaTrade Islamic account. 

AvaTrade takes its Islamic offering one step further and also provides halal oil trading and halal gold and silver trading solutions. To comply with Sharia Law oil gold and silver trading must also have physical support in the asset. AvaTrade offers a solution to have a gold and silver trading account that complies with Sharia Law.

Furthermore, you can trade oil in a halal way as the price of oil is tied to the futures market around the world with AvaTrade offering zero positive or negative swaps when doing so. You can also access halal index trading via AvaTrade which means there are no overnight interest payments when trading – you just pay the spread.

avatrade platform

AvaTrade also offers a high level of safety and security as they are authorised and regulated across five continents by regulators such as the CBI, IIROC, ADGM, ASIC, JFSA and others. 

There is also a large range of education and research tools available which cover core trading topics in an article and video format. 

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What are Halal Investments?

Halal investments are investments that are made in accordance with the principles of Shariah Law. These Islamic principles are based on the idea of using your finances for ethical investing to benefit the Muslim community and society.  

The Shariah-compliant investment rules are designed to balance five areas: religion, life, family, intellect and property. While you can invest in asset classes such as stocks, indices, commodities, cryptos, sukuk and property the intention and the way you invest are important. 

Islamic Law in finance states that investment opportunities should be made without the expectation of interest in return and that you should avoid unethical investments. There are specific guidelines and limits set out related to Halal investment options UK in the next section.

Islamic Investment Principles

Here are some guidelines and principles for Shariah-compliant investments. 

1. Riba-Free Investments

To ensure Sharia-compliant investments you must avoid opportunities or investments that involve the earning of interest or Riba. 

2. Avoid Unethical Investments

Shariah Law states that you should avoid investing in areas that harm society. This means avoiding industries such as alcohol, tobacco, gambling and banks (except Islamic banks) and insurance companies involved in interest payments. 

3. The 5% Rule

Shariah principles state that you should avoid investing in companies that generate more than 5% of its income from unethical sources (as listed above). 

Benefits of Halal Investments

To be able to invest successfully over the long term it is important to have a focus and a consistent plan or methodology to follow. Well-known investors, such as Warren Buffett, have had a specific method to pick investments that they have stuck to over many years. 

Identifying halal investments gives Muslim investors that focus. Finding companies that follow the Islamic investment principles listed above can help investors focus their minds and effort on choosing the right investment. 

Halal investments also offer the ability to invest in a socially responsible and ethical manner. By avoiding haram stocks you can focus on investing in stocks that provide a high level of peace of mind.

As Islamic finance principles discourge short term specualtion, halal investments help investors to find long-term, fundamentally sound opportunities. This may provide lower risk in your portfolio as you avoid short term speculation.

Finally, halal investments allow investors to grow their wealth while remaining Sharia-compliant. This means you can focus on halal investments from all over the world to help build your wealth. This not only includes the financial markets such as stocks, currencies and commodities but also includes halal property investment UK.

Conclusion – Halal Investments

Halal investing is becoming increasingly popular as a way to ethically perform responsible investing. But, the intention and the way you choose to invest needs to be Shariah-compliant also. 

eToro offers the ability to open an Islamic trading account to avoid interest payments. You can also buy real stocks and shares in halal stocks. 

You can view all of the features and financial services yourself by opening a free eToro account today.

Frequently Asked Questions on Halal Investments

Are there halal ways to invest?

Is investing in Apple halal?

Is it halal to invest in Tesla?

What are halal investments UK?

What brokers have Islamic accounts?

Natascha Sing author check sign Pro Investor


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