Salam,
Some sectors seem permissible and don’t have halal tradings i.e IT and Health Care
Is it permissible to buy indices based on these sectors because there are not many halal ETFs?
thanks and salam,
Sameh
P.S I’m not a resident in the UK to take advantage of some halal platforms i.e Wahed Invest and simplyethical
A post was merged into an existing topic: Is share/stock trading halal? Can you invest in the stock market?
Wasalam
May Allah bless you.
In theory some sectors are halal to invest your fund in. However when it comes to ETFs, we must have more details about its structure.
Some companies might not be providing shariah compliant services within a lawful sector, for example it might companies developing unethical technologies.
Secondly, some ETFs are structured in a way where they do not buy shares but rather they engage in SWAPs. For example, they will agree to receive a percentage return on a share market from a counter party. In exchange, the ETF pays the swap dealer the return on another underlying e.g. a collection of bonds.
This sort of transaction are not shariah compliant, hence there is a need to examine thoroughly the structure of the investment.
And Allah knows best!