S&P 500 Sharia Industry Exclusions ETF' - purification and voicing concerns about interest dealings

Investment Questions and Chats General Investment
#1

Assalamu Alaykum,

I’m looking to invest in a Shara compliant ETF and live in Australia. There aren’t any Australian ones available, so I’m looking into investing in the US market. I’ve found a broker which allows me to buy the ’ The SP Funds S&P 500 Sharia Industry Exclusions ETF’ (https://www.sp-funds.com/spus/)

I’ve got 3 questions, but happy to hear any other advice on the above fund/my strategy.

  1. They are Sharia certified by ‘Raqaba LLC’. (https://raqaba.co/en/) . Are they known to provide adequate Sharia certification?

  2. Purification process; Raqaba’s sharia certificate suggests the amount to be purified per share will be published quarterly; does this mean we just give this amount away each quarter? Also, it suggests the Zakatable amount will be published yearly; however how can this work as one’s own zakat date may not align with the date they publish the zakatable amount on?

  3. Voicing concern about interest dealings. How does one practically voice concern about interest dealings in an Islamic ETF? There are a huge list of companies. Any advice on this?

Thank you in advance
Aadil

#2

Assalaamu alaykum,

  1. Yes, Raqaba is well known Shariah advisory firm.

  2. Yes, you can reply on Raqaba’s advice. You will purify each quarter depending on the amount advised. For Zakat, you should use your Zakat anniversary.

  3. According to AAOIFI and international Sharia Standards, it is not a requirement to actively voice your opinion. However, if you are able to suggest reduced debt taking as a strategy in the Annual General Meeting.

1 Like
#3

Asalamualaikum brother Aadil,

I too live in Australia. Can I know the name od the broker that is allowing you to invest in SPUS.

#4

You can use SelfWealth for this (although I didn’t go ahead with this).

#5

Assalamoaleikum,

I have a question about calculating Zakat on 25% of the market value of shares one owns with the intention of holding onto them for the long term. I understand this is a conservative figure estimated by looking at the zakatable assets of a majority of the FTSE100 companies. I own shares in the US stock market S&P500 using the SPUS Halal index fund (https://www.sp-funds.com/spus/). Can I also use 25% of the market value of my portfolio as the amount I need to pay Zakat on or would a different percentage apply for US stocks?

In this article (https://www.islamicfinanceguru.com/articles/investment/how-to-deal-with-zakat-on-your-investments) it is also mentioned 40% as the value to use for stocks as part of a pension plan. Which one do you recommend to use and why is there a difference?

#6

@Mufti_Faraz_Adam

Salam Mufti - are you saying that there is an opinion we can follow where we don’t have to voice our objections to haram/interest-based dealings? Regardless of our size in the company and/or potential influence? Does this apply to both stocks and ETFs or just stocks?

In that case the only thing we would have to do is purify our investments and invest in Shariah compliant stocks/ETFs right?

Jazakumullahu Khairan.