The Ultimate Guide to Shariah-Compliant Investing for Canadian Muslims

The Muslim community in Canada is growing steadily, with the population now exceeding one million and representing 5% of the nation's total (Source). As Islam continues to be the fastest-growing religion in Canada, the demand for Shariah-compliant investment options is rising in tandem. At Assad Wealth Management, we understand the unique financial needs of our Muslim clients and have been working tirelessly for over 19 years to provide ethical investment solutions that align with Islamic principles. In this comprehensive guide, we'll explore the world of halal investing in Canada and how you can grow your wealth while staying true to your faith.

What is Halal Investing?

Halal investing, also known as Islamic finance, is an approach to investment that adheres to the principles of Islamic law (Shariah). This form of ethical investing ensures that your financial decisions are in harmony with your religious beliefs. The key aspects of halal investing include:

1. Prohibition of interest (riba): Islamic law forbids the charging or paying of interest, which is considered exploitative.

2. Avoidance of haram industries: Investments in certain industries such as alcohol, gambling, pork products, and conventional financial services are not permitted.

3. Risk-sharing: Halal investments should involve the sharing of both profits and losses between parties.

4. Ethical and socially responsible practices: Companies must adhere to ethical business practices and contribute positively to society.

Levels of Compliance for Halal Investments

At Assad Wealth Management, we employ a rigorous two-level screening process to ensure that investments meet the stringent requirements of Islamic finance:

Level One - Core Business Screening:

This initial screening excludes companies involved in non-compliant business activities such as:

• Advertising of non-Islamic products or services

• Certain media and entertainment sectors

• Alcohol production or distribution

• Conventional financial services

• Gambling

• Pork-related activities

• Pornography

• Tobacco

• Weapons manufacturing

Level Two - Accounting-Based Screening:

Companies that pass the first level are then evaluated based on their financial ratios:

• Leverage Compliance: Debt to market value of equity must be less than 33%

• Cash Compliance: Accounts receivables and interest-bearing securities must meet specific thresholds

• Revenue from Non-Compliant Activities: Must be less than 5% of total revenue

• Dividend Purification Ratio: Calculated to determine the portion of dividends that may need purification

The Role of AAOIFI in Halal Investing

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) plays a crucial role in standardizing Islamic finance practices globally. This independent body has developed a comprehensive framework that helps Muslims determine whether a company is halal or haram for investment purposes. Their guidelines are widely respected and followed by Islamic financial institutions and investors worldwide.

Assad Wealth Management: Bridging Deen and Dunya

As a premier private wealth management and financial planning firm in Canada specializing in Islamic finance, Assad Wealth Management is committed to helping our clients find the perfect balance between their religious obligations (Deen) and worldly affairs (Dunya). Our experienced team understands the nuances of Shariah-compliant investing and works diligently to ensure your financial success aligns with your faith.

Mackenzie Shariah Global Equity Fund: A Breakthrough in Halal Investing

After 19 years of dedicated effort, we are proud to announce our partnership with Mackenzie Investments to launch the Mackenzie Shariah Global Equity Fund. This groundbreaking mutual fund is the first of its kind in Canada, making halal investing accessible to a broader audience. Key features of this fund include:

• Shariah-compliant investing certified by global Islamic scholars

• Active management focusing on high-quality, undervalued companies with strong growth potential

• A disciplined, risk-aware investment approach

• Regular audits by Ratings Intelligence Partners to ensure ongoing Shariah compliance

This fund represents a significant milestone in our mission to provide inclusive, values-driven investment options for the Canadian Muslim community and beyond.

Conclusion

Halal investing in Canada is not just a possibility; it's a thriving reality. With the right guidance and tools, you can grow your wealth while adhering to your Islamic principles. At Assad Wealth Management, we're committed to helping you navigate the world of Shariah-compliant investments, ensuring that your financial decisions align with your faith and values.

Whether you're considering individual stocks, mutual funds like the Mackenzie Shariah Global Equity Fund, or other halal investment options, our team is here to provide experienced advice and personalized solutions. Contact Assad Wealth Management today to start your journey towards ethical and prosperous financial growth.

Remember, with halal investing, you can achieve financial success without compromising your beliefs – a true balance of Deen and Dunya.

This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Assad Wealth Management is solely responsible for its content. For more information on this topic or any other financial matter, please contact an IG Wealth Management Consultant. Trademarks, including IG Wealth Management and IG Private Wealth Management, are owned by IGM Financial Inc. and licensed to subsidiary corporations.