5% non permissible income

Assalam u Alaikum,

When searching for many of the investment funds offering ETFs and claiming to be Shariah compliant, most of them mention that every company in their fund does not derive more than 5% of their income from alcohol, tobacco, pork-related products, weapons, conventional banking or insurance companies, and adult entertainment. May I ask, how this 5% rule is falling under Shariah compliance and if there are any halal offerings in the market that avoid it completely?

Jazakumullahu Khairan

Shahzad Farooq


May Allah bless you.

Please see the following link to an article written by Mufti Faraz Adam on this topic:

Also, I am not aware of major funds that avoid some form of haram income completely.

Kind regards