Investing Question: Wahed Invest and Simply Ethical

Asalaam Alaikum

Would section 4 of your zakat guidance note apply to ISAs with the above companies.

Would gold held in these funds also come under the same calculation?

I have just seen a response to another question regarding Wahed Invest and the response mentions a different calculation. I understand that any cash would incur the full 2.5% and I assume gold would fall under the same category ?

My portfolio is Moderately aggressive. I have emailed them and unfortunately they have said they are unable to offer guidance.

I appreciate any assistance

Wa alaykum salaam,

Gold held in these funds will be subject to 2.5% of Zakat similar to cash assets.

And the remainder? Would it be 25% at 2 5% or 40% at 2.5% as mentioned in the IFG zakat guidance notes section 4?

FUNDS
4.1 If you hold an investment in an equities fund (this is a fund that invests primarily in
stocks and shares), it is highly impractical to do a complete assessment of every
single company that the fund holds and work out your zakat. As such, the following
approach is recommended.
4.2 Take 40% of the value of your investment in the fund, and pay 2.5% zakat on it
(which is the same as saying pay 1% on your overall investment).
(a) Example: you hold £10,000 in a fund (or across several funds). You pay 1%
(£100).
4.3 If the fund is a property or sukuk fund, then no zakat is due as the underlying
investment is not zakatable7
.

There is a range of views on the “approximation” percentage to use.

Our view is a bit more conservative than NZF/Mufti Faraz’s view on this in that we went with 40% to be safe.

But 25% is an eminently sensible approach - and is actually backed up by research that NZF and Mufti Faraz have done of major fund holdings - so a lot more credible in our view than just 40% approximation.

(It also saves you zakat!)

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