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Are you looking to diversify your investment portfolio? Or are you a beginner investor and want to start with a few low-risk investments? Look no further! Halal equity funds and mutual funds are great investment options.

Oh, you don’t know what equity & mutual funds are? Okay, let’s talk about that before moving to the list of top halal equity and mutual funds. 

What are Equity and Mutual Funds?

Mutual funds are professionally managed securities that pool funds from investors and invest in stocks, bonds, and short-term debt. They provide the right diversification of risk so that investors can enjoy steady returns through low-risk investing.

Equity funds are mutual funds that invest primarily in equity stocks of several companies. Because interest-bearing securities such as bonds and preferred stocks are not permissible in Islam, only Equity funds are Shariah-compliant.

Mutual funds, including equity funds, are managed actively by world-class professionals. Therefore, those who buy mutual funds must pay fees such as annual management charges (AMC), performance fees, self-invested personal pension (SIPP) fees, and transaction fees.

Why Invest in Equity and Mutual Funds?

Equity and mutual funds are a great investment for you if you want to invest in a diverse portfolio but don’t want to actively manage it yourself. You might also want to start investing with low capital. In both situations, equity and mutual funds can be a great start because the goal of an equity fund or mutual fund is to reduce risk as much as possible; it is a safe investment with good returns.

Here are some benefits of investing in halal equity funds

Diversification: Mutual funds are managed by industry experts who create the perfect mix of securities that offer the best balance of risk and return.

Convenience: Buying mutual or equity funds is better than buying several securities to build your portfolio. Investors find it much more convenient to simply pick and add equity funds and mutual funds to their portfolios.

Expense: Although some mutual funds charge very high management fees, they are still much cheaper than broker’s commissions. With mutual and equity funds, you might not have to appoint a financial advisor. Also, buying many mutual funds does not even involve transaction fees.

List of Top Halal Equity Funds

Here is a list of halal equity funds that you can purchase in the US and UK:

*Current prices of the securities referred to prices on July 26, 2022. 

1. HSBC Islamic Global Equity Index

The HSBC Islamic Global Equity Index tracks the performance of the world index by tracking the largest 100 stock indexes. It invests mainly in the tech, software, and pharmaceutical sectors. The current price of the HSBC Islamic Global Equity Index is 29.47 GBP.

2. Schroders Islamic Global Equity Fund 

Schroders Islamic Global halal Equity Fund, launched in February 2016, invests in stocks of companies such as Nestle, Pfizer, Alphabet, Astra Zeneca, Johnson & Johnson, Microsoft, and others. The current price of Schroders Islamic Global Equity Fund is 16.22 GBP

3.BNP Paribas Islamic Hilal Income (Sukuk Fixed Income)

The major investment of BNP Paribas Islamic Hilal Income is in Sukuk Funds such as EQUATE Sukuk SPC Ltd., Emaar Sukuk Limited, DP World Crescent LTD, DAE Sukuk (DIFC) Ltd., DIB Sukuk Co Ltd, MAF Sukuk, and several others.

The current price of BNP Paribas Islamic Hilal Income is 1,545.62 USD.

4. iShares MSCI USA Islamic UCITS ETF USD

iShares MSCI USA Islamic UCITS is an ETF that gives investors exposure to large and mid-cap US equities. It directly tracks the MSCI USA Islamic Net Total Return Index. The current price of iShares MSCI USA Islamic UCITS ETF is 4,526.69 USD.

5. Oasis Crescent Equity Fund 

The Oasis Crescent halal Equity Fund invests in several stocks listed on the South African Stock Exchange, Sukuk income, and property funds. The current price of the Oasis Crescent Equity Fund is 12.89 ZAR.

6. Amana Mutual Funds Trust Growth Fund Investor (AMAGX)

Amana Mutual Funds Trust Growth Fund Investor invests in large-cap stocks such as Apple, Adobe, ASML Holding, Trimble, Taiwan Semiconductor Manufacturing Co, Qualcomm, and several others. The current price of Amana Mutual Funds Trust Growth Fund Investor is 59.35 USD.

7. Azzad Ethical Fund ADJEX 

Azzad Ethical halal equity Fund is an ethical and Shariah-compliant mutual fund run by Azzad Asset Management that invests in mid-sized growth stocks. The current price of ADJEX is 14.01 USD.

8. Amana Developing World Fund AMDWX 

Amana Developing World Fund is an international mutual fund run by Amana Investments. The investment fund seeks long-term growth through investing in emerging markets in a Shariah-compliant manner. The current price OF Amana Developing World Fund is 11.18 USD.

9. Azzad Wise Capital Fund WISEX 

Azzad Wise Capital Fund is a fixed-income fund run by Azzad Asset Management. The current price of Azzad Wise Capital Fund is 10.50 USD.

10. Wahed FTSE USA Shariah ETF HLAL

This ETF tracks the performance of the FTSE USA Shariah Index. Major investments of Wahed FTSE USA Shariah ETF are in stocks of large-cap companies that are Shariah-compliant. The current price of Wahed FTSE USA Shariah ETF is 38.75 USD.

11. SP Funds Dow Jones Global Sukuk ETF SPSK 

SP Funds Dow Jones Global Sukuk ETF is a fixed-income Sukuk fund that tracks the Dow Jones Sukuk Total Return GTR Index. The current price of SP Funds Dow Jones Global Sukuk ETF is 18.12 USD.

12. Invesco Physical Gold ETC (SGLD)

Invesco Physical Gold ETC is a gold ETF that tracks gold prices. Actual gold bullions are held in the vaults of J.P. Morgan Chase Bank’s London. The current price of Invesco Physical Gold ETC is 166.33 EUR.

13. SP Funds S&P Global REIT Sharia ETF (SPRE) 

SP Funds S&P Global REIT Sharia ETF is a passively managed ETF that invests in Sharia-compliant stocks. Listed on many developed and emerging markets, this ETF tracks the S&P Global REIT. The current price of SP Funds S&P Global REIT Sharia ETF (SPRE) is 22.27 USD.

14. HSBC Islamic Global Equity Index AD

HSBC Islamic Global Equity Index AD tracks the performance of the world index. Major investments of HSBC Islamic Global Equity Index AD are in the Technology, Healthcare, Communication Services, and Consumer Cyclical sectors. The current price of the HSBC Islamic Global Equity Index is 19.35 USD.

15. iShares MSCI USA Islamic UCITS ETF (ISUS)

15. iShares MSCI USA Islamic UCITS ETF ISUS is registered in stock exchanges of 15 countries. Major investments of iShares MSCI USA Islamic UCITS ETF ISUS are in the energy, healthcare, and Consumer staples sectors. The current price of iShares MSCI USA Islamic UCITS ETF ISUS is 56.20 USD. 

16. iShares MSCI World Islamic ETF USD (ISDW)

iShares MSCI World Islamic ETF USD gives investors exposure to developed companies through a diversified approach. The ETF holds the majority of stocks of companies working in the healthcare, IT, Energy, and Industrial sectors. The current price of iShares MSCI World Islamic ETF is 38.93 USD

17. iShares MSCI World Islamic ETF USD Dist GBP (ISWD)

iShares MSCI World Islamic ETF USD Dist GBP gives investors exposure to international markets with complete Shariah compliance. Major investments of this Islamic ETF are in the large-cap stocks of healthcare and energy companies. The current price of iShares MSCI World Islamic ETF USD Dist GBP is 38.93 USD.

18. iShares MSCI USA Islamic ETF USD Dist (ISDU)

iShares MSCI USA Islamic ETF USD Dist- ISDU is another Shariah-compliant fund, another Islamic ETF managed by Black Rock. The top holdings are in tech, healthcare, and consumer products-related companies with total assets under management of 191 million USD. The current price of iShares MSCI USA Islamic ETF USD Dist is 56.25 USD

19. iShares MSCI EM Islamic ETF USD Dist (ISDE)

iShares MSCI EM Islamic ETF (ISDE) is also managed by Black Rock. The fund’s top holdings are in technology, energy, basic materials, and financial services. The current price of iShares MSCI EM Islamic ETF USD is 17.85 USD.

20. BNP Paribas Islamic Hilal Income P (BYTBKW3)

BNP Paribas Islamic Hilal Income primarily invests in Sukuk funds, providing investors exposure to international markets. The price of BNP Paribas Islamic Hilal Income is 1549.36 USD.

21. HSBC Islamic Global Equity Index BD GBP (BJLVT96)

HSBC Islamic Global Equity Index BD GBP tracks the performance of the world index and is managed by AJ Bell. The current price of HSBC Islamic Global Equity Index BD is 1,427.1 GBX.

Conclusion

Investing in halal equity funds and ETFs is one of the best ways to invest in the stock market in a Shariah-compliant manner. Equity funds and ETFs are also great low-risk investments for those who are beginners and don’t know much about investing.

Although most mutual funds and equity funds are low-risk investments, the risk profile of these securities can vary from one another. Before you invest in a mutual fund or equity fund, it is important to check factors such as risk, fees, Shariah compliance, and historic rate of return.

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