Can you please explain how to calculate Zakaat on a Wahed Invest account set at Very aggressive?
You can use 25% of the amount you hold in such a portfolio and then give 2.5% on that. This is the NZF approach.
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As the Wahed portfolios are primarily for growth, and not income, would the entire holding amount not be liable for zakat rather than the 25% proxy?
As per my discussions with Wahed Invest (I am also their Shariah advisor), the aggressive portfolio equities are not being actively traded. The equities are held for income and rebalanced quarterly. In that case, you can use the 25% to cover the equities.
However, the aggressive portfolio is composed of equities and cash. In that scenario, you will need to pay Zakat (2.5%) on 25% of 97.50%.
2.50% is held as cash, so that will be fully Zakatable at 2.5%.
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For example to understand if I have 30k$
Zakat will be
2.5% cash = 750$
97.5% = 29250
Zakat 25% x 29250 = 7312.5
Zakat amount = 2.5% x 7312.5 + 2.5%x 750
Zakat amount = 1828.125+ 18.75 = 1846.87
Is this right calculation and can I use 6.2% x the invested amount for a matter of easy calculation
1846.87/30000= 6.2%
And is applicable for very aggressive investing in stock only in waheed invest
Can you check mufti about what I have wrote if it is correct or not
Does this mean even if I set up an account for intention of capital growth I only need to pay zakah on 25% of the total pot?
Salam mufti. @Mufti_Faraz_Adam
If I have an aggressive (or moderate) portfolio from Wahed that I have bought for 3 to 5 years intention to make profit, is this still applicable, I.e 25% of the non-cash element of the portfolio or is it 2.5% of the whole balance?