u/Senan129

I am studying finance a traditional finance degree and have qualified in Islamic finance. I have also worked in the investment industry (equity research and M&A) and currently work in Islamic finance while building rihaliq.com, my Islamic finance startup.

I am happy to try help answer your questions about finance, investing (without recommending any stocks, etc), explain Islamic finance concepts, or answer questions about the industry.

Salam all, 

I have worked in the investment industry during my time in college (equity research and M&A) as well as currently working in Islamic finance. Happy to take broad questions on Islamic finance or portfolios as well as address one issue I am seeing in a lot of Islamic portfolios. 

SPUS and pretty much all Shariah compliant S&P ETFs, besides having other issues around screening which are a separate debate, are dangerously concentrated in tech IMO. High tech investment is generally ok if you are comfortable with the risk, but I think a lot of people reasonably assume they're diversified because they're holding a lot of different shares. The regular S&P is heavily concentrated in Mag7, chip stocks, AI infrastructure, and AI adjacent tech stories. All are highly correlated and a lot are, for historical standards, highly extended. High expectations usually means that less than exceptional returns can cause rapid, large sell offs. Look at IBM's earnings the other week, the results weren't terrible but weren't good, the stock sold off 25%.

The Shariah screened S&P 500 removes financial firms, many utility firms with high leverage,  defence companies, and more. This removes a lot of natural hedges to the AI trade which can perform well independently of the AI narrative and can unknowingly leave investors (even more) highly exposed to a sell off. 

So my favourite solution at the moment is holding a core ETF and adding in strong single stocks from another industry to increase weight in non-tech exposed industries (called a factor tilt). Which opens the question of "how do people who don't have the time to find Halal single stocks" do this. The strategies page on RihalIQ has them ( https://rihaliq.com/investors ). Essentially, I've found sourcing investments from strong fund managers to be useful. They tend to have some implicit research/conviction behind them and, based on the ones available in the sample, tend to have pretty interpretable meanings when they buy and hold the stocks as they're long only managers who hold for long horizons. For instance, TCI Fund management's Halal screened portfolio owns Ferrovial, an infrastructure company (toll roads + airports mainly) that's up over 20% in the past year. These potential defensive hedges can be more easily surfaced this way and have solid performance. 

Obviously this isn't for everyone and your own due diligence will have to be done, but it's worth taking a look at. I'd like to hear your thoughts plus I'm happy to answer any other questions

Salam all, I hope you’re all well. Thanks for all the feedback so far. As some of you know I’m putting together information on Shariah investment strategies. The first batch is based on the holdings of successful fund managers. The basic thesis is that copying their holdings over long periods have in the past given outsized returns and that this can be replicated through their shariah screened versions. 

I will be covering my initial findings and where I think they can be useful for sourcing investment ideas as well as breaking down individual strategies and how they performed vs their non-screened counterparts (and potentially why). Firstly I’d like to break down the most interesting of the four strategies I screened which is Cathy Wood’s Ark Innovation fund. 

Core strategy metrics: 

https://preview.redd.it/56wz82pas9eh1.jpg?width=859&format=pjpg&auto=webp&s=567e09948b5d2ffff7ef495e15b648d47a474f9e

As shown in the screenshot. The Halal CAGR (rebalanced every time the fund discloses) since 2020 is substantially higher than the non-screened portfolio at 11.5% versus 9.3%. 

What’s more interesting here is the market sensitivity, measured by Beta, of the Halal portfolio is almost exactly the same as the non-Halal one (1.90 vs 1.91). In addition to this, the Sortino ratio (measuring returns versus downside volatility) is substantially higher at 0.82 versus 0.7. Meaning, on major metrics, the strategy of copying Ark Invest filings with the Halal screening performs better without additional risk. 

My best guess (though not 100% certain) is that these better risk adjusted returns may come from Islamic screens promoting companies that invest more aggressively (lower cash and interest bearing securities are required) and take on less leverage (<30% debt to market cap).

Utility for portfolios: 

Even if you don’t follow the strategy of copying Ark’s trade. These stocks included in the portfolio may have some weight behind them which could help you find good additions to your portfolio (provided proper due diligence is done). 

Cathy Wood tends to hold stocks for longer periods and has more fundamental conviction in the portfolio’s names (compared to an event driven trader or short term trader who may only have this for a short time). 

This could potentially give a pre-screened list of Halal investment names in the growth industry. Potentially, working as a strong addition to your portfolio investment sourcing pipeline. The strategies are all accessible now ( https://rihaliq.com/investors ) 

Let me know what you think, what strategies should be added, or should different datapoints be added that you’d find useful?

Salam all, I hope you’re all well. Thanks for all the feedback so far. As some of you know I’m putting together information on Shariah investment strategies ( rihaliq.com ). The first batch is based on the holdings of successful fund managers. The basic thesis is that copying their holdings over long periods have in the past given outsized returns and that this can be replicated through their shariah screened versions. 

I will be covering my initial findings and where I think they can be useful for sourcing investment ideas as well as breaking down individual strategies and how they performed vs their non-screened counterparts (and potentially why). Firstly I’d like to break down the most interesting of the four strategies I screened which is Cathy Wood’s Ark Innovation fund. 

Core strategy metrics: 

https://preview.redd.it/56wz82pas9eh1.jpg?width=859&format=pjpg&auto=webp&s=567e09948b5d2ffff7ef495e15b648d47a474f9e

As shown in the screenshot. The Halal CAGR (rebalanced every time the fund discloses) since 2020 is substantially higher than the non-screened portfolio at 11.5% versus 9.3%. 

What’s more interesting here is the market sensitivity, measured by Beta, of the Halal portfolio is almost exactly the same as the non-Halal one (1.90 vs 1.91). In addition to this, the Sortino ratio (measuring returns versus downside volatility) is substantially higher at 0.82 versus 0.7. Meaning, on major metrics, the strategy of copying Ark Invest filings with the Halal screening performs better without additional risk. 

My best guess (though not 100% certain) is that these better risk adjusted returns may come from Islamic screens promoting companies that invest more aggressively (lower cash and interest bearing securities are required) and take on less leverage (<30% debt to market cap).

Utility for portfolios: 

Even if you don’t follow the strategy of copying Ark’s trade. These stocks included in the portfolio may have some weight behind them which could help you find good additions to your portfolio (provided proper due diligence is done). 

Cathy Wood tends to hold stocks for longer periods and has more fundamental conviction in the portfolio’s names (compared to an event driven trader or short term trader who may only have this for a short time). 

This could potentially give a pre-screened list of Halal investment names in the growth industry. Potentially, working as a strong addition to your portfolio investment sourcing pipeline. The strategies are all accessible now ( https://rihaliq.com/investors ) 

Let me know what you think, what strategies should be added, or should extra datapoints be added that you’d find useful?

Salam all, thanks for the kind responses to my last post. I was honoured to see such interest in my background in working in Islamic finance as a university student and hearing your general thoughts and questions. 

Alongside many other aspirations people have for Islamic finance, I learnt that people want help finding Halal investment opportunities. A lot of people (including myself) have criticisms about the lack of options besides the Shariah Screened S&P 500 etc which are far too concentrated in big tech and AI. 

One solution that I've received positive feedback on both from people here and elsewhere is creating Islamic research portfolios that aren't that same S&P 500 formation.

So how can we do this? I read a paper ( https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5399672 ) about how copying institutional fund's 13-Fs can mirror the returns of the funds. With the top quartile of these funds mirrored using this strategy beating the S&P 500 by 24.3% on an annualised risk-adjusted basis (though this is obviously backwards looking). I'm very keen to see if this outperforms the non-Halal version of the funds. Especially as the Shariah Screened S&P 500 has outperformed the conventional one due to tech and growth exposure, can this be replicated elsewhere? I want to make this accessible ( https://rihaliq.com ) by presenting the Halal opportunities, quantitatively ranking them (through Sharpe ratio performance etc).

However, I only think a limited amount of fund managers are suitable for this approach and would probably not be of use for people to follow. This is due to both Islamic compliance and the time lag involved in reporting positions. Some strategies, such as event-driven strategies or strategies involving significant hedging, make disclosed positions less useful by the time they are reported. Other highly speculative strategies may also not align with Islamic investing principles.

Therefore, I think the most obvious category to start with is long-only managers with long holding periods. These managers have disclosures that are more likely to represent their actual investment philosophy.

A first cohort I think might be useful is:

1. Berkshire Hathaway (Warren Buffet/Greg Abel) 
2. Fundsmith (Terry Smith) 
3. TCI Fund Management (Chris Hohn) 
4. Himalaya Capital (Li Lu)

 

They all have 

- Strong past performance

- Holds things for a very long time making the risk of positions being churned a lot low.

- Doesn't have a lot to do with market neutral strategies, long/short pairs, etc so makes the signals we get from disclosures more clear. 

I have a lot of the quantitative stuff already made from another personal project so I can hopefully have this available in the coming weeks so stay tuned.  In the mean time I would love some community input about managers you'd like to see in the first cohort, how you'd like it presented, how do you think good Islamic investing strategies can be put together, and anything else that comes to mind. Also happy to answer any questions about this or general Islamic finance discussion topics. I will be posting findings about this as I come across them.

Salam all, thanks for the kind responses to my last post. I was honoured to see such interest in my background in working in Islamic finance as a university student and hearing your general thoughts and questions. 

Alongside many other aspirations people have for Islamic finance, I learnt that people want help finding Halal investment opportunities. A lot of people (including myself) have criticisms about the lack of options besides the Shariah Screened S&P 500 etc which are far too concentrated in big tech and AI. 

One solution that I've received positive feedback on both from people here and elsewhere is creating Islamic research portfolios that aren't that same S&P 500 formation.

So how can we do this? I read a paper ( https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5399672 ) about how copying institutional fund's 13-Fs can mirror the returns of the funds. With the top quartile of these funds mirrored using this strategy beating the S&P 500 by 24.3% on an annualised risk-adjusted basis (though this is obviously backwards looking). I'm very keen to see if this outperforms the non-Halal version of the funds. Especially as the Shariah Screened S&P 500 has outperformed the conventional one due to tech and growth exposure, can this be replicated elsewhere? I want to make this accessible ( https://rihaliq.com ) by presenting the Halal opportunities, quantitatively ranking them (through Sharpe ratio performance etc).

However, I only think a limited amount of fund managers are suitable for this approach and would probably not be of use for people to follow. This is due to both Islamic compliance and the time lag involved in reporting positions. Some strategies, such as event-driven strategies or strategies involving significant hedging, make disclosed positions less useful by the time they are reported. Other highly speculative strategies may also not align with Islamic investing principles.

Therefore, I think the most obvious category to start with is long-only managers with long holding periods. These managers have disclosures that are more likely to represent their actual investment philosophy.

A first cohort I think might be useful is:

1. Berkshire Hathaway (Warren Buffet/Greg Abel) 
2. Fundsmith (Terry Smith) 
3. TCI Fund Management (Chris Hohn) 
4. Himalaya Capital (Li Lu)

 

They all have 

- Strong past performance

- Holds things for a very long time making the risk of positions being churned a lot low.

- Doesn't have a lot to do with market neutral strategies, long/short pairs, etc so makes the signals we get from disclosures more clear. 

I have a lot of the quantitative stuff already made from another personal project so I can hopefully have this available in the coming weeks so stay tuned.  In the mean time I would love some community input about managers you'd like to see in the first cohort, how you'd like it presented, how do you think good Islamic investing strategies can be put together, and anything else that comes to mind. Also happy to answer any questions about this or general Islamic finance discussion topics. I will be posting findings about this as I come across them.

I have formally studied Islamic finance, gained qualifications in it, and currently work in the industry part time as a university student. As far as the industry has come in the past few years I've noticed that there's still a big gap between what's out there and what people actually want.

For instance, I've noticed a lot of push back towards Islamic stock screening. For those who don't already know, a stock is considered Halal by the most standards in the industry if the interest bearing debt is <30% of market cap, cash and interest bearing securities is <30% of market cap, and impermissible (gambling, alcohol etc etc) revenues are <5% of revenues. This seems to get a noticeable amount of push back both here and more broadly amongst Islamic finance consumers. Namely because it doesn't differentiate between a company that behaves ethically and one who may be involved in things like forced labour and other activities against Islamic moral standards.

I have made a first attempt at a solution. I released a free screening tool which uses the traditional screen for the total pass or fail criteria (it's made by scholars and I am not one so I won't redesign the compliance criteria) but on top of this it scores the companies on a scale of whether they behave ethically. It does this by finding reputable citations of un-ethical actions (weighed by severity and how long ago it was, e.g. an anti-trust violation 30 years ago isn't given as large of a penalty as being found to use forced labour last month). It also looks for client relationships with impermissible companies if they can be verified which is sometimes tricky because this often isn't disclosed.

This is the tool ( https://rihaliq.com ) it currently works for over 5,200 stocks and reads directly from regulatory filings. I would love some feedback on what people would like to see. I am trying to make it into a full Islamic investing platform so I would love to hear about features people actually want from the industry. This can range from changes to the screening methodology or ways you want the screening applied.

One thing I'm trying to solve is showing good Halal opportunities without giving unlicensed investment advice. I'm currently working on tracking top fund managers investments and showing the compliant ones to people, is this something people would like to see or would something else be more useful to you? Happy to implement anything of use.

I have formally studied Islamic finance, gained qualifications in it, and currently work in the industry part time as a university student. As far as the industry has come in the past few years I've noticed that there's still a big gap between what's out there and what people actually want.

For instance, I've noticed a lot of push back towards Islamic stock screening. For those who don't already know, a stock is considered Halal by the most standards in the industry if the interest bearing debt is <30% of market cap, cash and interest bearing securities is <30% of market cap, and impermissible (gambling, alcohol etc etc) revenues are <5% of revenues. This seems to get a noticeable amount of push back both here and more broadly amongst Islamic finance consumers. Namely because it doesn't differentiate between a company that behaves ethically and one who may be involved in things like forced labour and other activities against Islamic moral standards.

I have made a first attempt at a solution. I released a free screening tool which uses the traditional screen for the total pass or fail criteria (it's made by scholars and I am not one so I won't redesign the compliance criteria) but on top of this it scores the companies on a scale of whether they behave ethically. It does this by finding reputable citations of un-ethical actions (weighed by severity and how long ago it was, e.g. an anti-trust violation 30 years ago isn't given as large of a penalty as being found to use forced labour last month). It also looks for client relationships with impermissible companies if they can be verified which is sometimes tricky because this often isn't disclosed.

This is the tool ( https://rihaliq.com ) it currently works for over 5,200 stocks and reads directly from regulatory filings. I would love some feedback on what people would like to see. I am trying to make it into a full Islamic investing platform so I would love to hear about features people actually want from the industry. This can range from changes to the screening methodology or ways you want the screening applied.

One thing I'm trying to solve is showing good Halal opportunities without giving unlicensed investment advice. I'm currently working on tracking top fund managers investments and showing the compliant ones to people, is this something people would like to see or would something else be more useful to you? Happy to implement anything of use.

Salam all, thanks for the kind responses to my last post. I was honoured to see such interest in my background in working in Islamic finance as a university student and hearing your general thoughts and questions. 

Alongside many other aspirations people have for Islamic finance, I learnt that people want help finding Halal investment opportunities. A lot of people (including myself) have criticisms about the lack of options besides the Shariah Screened S&P 500 etc which are far too concentrated in big tech and AI. 

One solution that I've received positive feedback on both from people here and elsewhere is creating Islamic research portfolios that aren't that same S&P 500 formation.

So how can we do this? I read a paper ( https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5399672 ) about how copying institutional fund's 13-Fs can mirror the returns of the funds. With the top quartile of these funds mirrored using this strategy beating the S&P 500 by 24.3% on an annualised risk-adjusted basis (though this is obviously backwards looking). I'm very keen to see if this outperforms the non-Halal version of the funds. Especially as the Shariah Screened S&P 500 has outperformed the conventional one due to tech and growth exposure, can this be replicated elsewhere? I want to make this accessible ( https://rihaliq.com ) by presenting the Halal opportunities, quantitatively ranking them (through Sharpe ratio performance etc).

However, I only think a limited amount of fund managers are suitable for this approach and would probably not be of use for people to follow. This is due to both Islamic compliance and the time lag involved in reporting positions. Some strategies, such as event-driven strategies or strategies involving significant hedging, make disclosed positions less useful by the time they are reported. Other highly speculative strategies may also not align with Islamic investing principles.

Therefore, I think the most obvious category to start with is long-only managers with long holding periods. These managers have disclosures that are more likely to represent their actual investment philosophy.

A first cohort I think might be useful is:

1. Berkshire Hathaway (Warren Buffet/Greg Abel) 
2. Fundsmith (Terry Smith) 
3. TCI Fund Management (Chris Hohn) 
4. Himalaya Capital (Li Lu)

 

They all have 

- Strong past performance

- Holds things for a very long time making the risk of positions being churned a lot low.

- Doesn't have a lot to do with market neutral strategies, long/short pairs, etc so makes the signals we get from disclosures more clear. 

I have a lot of the quantitative stuff already made from another personal project so I can hopefully have this available in the coming weeks so stay tuned.  In the mean time I would love some community input about managers you'd like to see in the first cohort, how you'd like it presented, how do you think good Islamic investing strategies can be put together, and anything else that comes to mind. Also happy to answer any questions about this or general Islamic finance discussion topics. I will be posting findings about this as I come across them.

Salam all, thanks for the kind responses to my last post. I was honoured to see such interest in my background in working in Islamic finance as a university student and hearing your general thoughts and questions. 

Alongside many other aspirations people have for Islamic finance, I learnt that people want help finding Halal investment opportunities. A lot of people (including myself) have criticisms about the lack of options besides the Shariah Screened S&P 500 etc which are far too concentrated in big tech and AI. 

One solution that I've received positive feedback on both from people here and elsewhere is creating Islamic research portfolios that aren't that same S&P 500 formation.

So how can we do this? I read a paper ( https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5399672 ) about how copying institutional fund's 13-Fs can mirror the returns of the funds. With the top quartile of these funds mirrored using this strategy beating the S&P 500 by 24.3% on an annualised risk-adjusted basis (though this is obviously backwards looking). I'm very keen to see if this outperforms the non-Halal version of the funds. Especially as the Shariah Screened S&P 500 has outperformed the conventional one due to tech and growth exposure, can this be replicated elsewhere? I want to make this accessible ( https://rihaliq.com ) by presenting the Halal opportunities, quantitatively ranking them (through Sharpe ratio performance etc).

However, I only think a limited amount of fund managers are suitable for this approach and would probably not be of use for people to follow. This is due to both Islamic compliance and the time lag involved in reporting positions. Some strategies, such as event-driven strategies or strategies involving significant hedging, make disclosed positions less useful by the time they are reported. Other highly speculative strategies may also not align with Islamic investing principles.

Therefore, I think the most obvious category to start with is long-only managers with long holding periods. These managers have disclosures that are more likely to represent their actual investment philosophy.

A first cohort I think might be useful is:

1. Berkshire Hathaway (Warren Buffet/Greg Abel) 
2. Fundsmith (Terry Smith) 
3. TCI Fund Management (Chris Hohn) 
4. Himalaya Capital (Li Lu)

 

They all have 

- Strong past performance

- Holds things for a very long time making the risk of positions being churned a lot low.

- Doesn't have a lot to do with market neutral strategies, long/short pairs, etc so makes the signals we get from disclosures more clear. 

I have a lot of the quantitative stuff already made from another personal project so I can hopefully have this available in the coming weeks so stay tuned.  In the mean time I would love some community input about managers you'd like to see in the first cohort, how you'd like it presented, how do you think good Islamic investing strategies can be put together, and anything else that comes to mind. Also happy to answer any questions about this or general Islamic finance discussion topics. I will be posting findings about this as I come across them.

Salam all, thanks for the kind responses to my last post. I was honoured to see such interest in my background in working in Islamic finance as a university student and hearing your general thoughts and questions. 

Alongside many other aspirations people have for Islamic finance, I learnt that people want help finding Halal investment opportunities. A lot of people (including myself) have criticisms about the lack of options besides the Shariah Screened S&P 500 etc which are far too concentrated in big tech and AI. 

One solution that I've received positive feedback on both from people here and elsewhere is creating Islamic research portfolios that aren't that same S&P 500 formation.

So how can we do this? I read a paper ( https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5399672 ) about how copying institutional fund's 13-Fs can mirror the returns of the funds. With the top quartile of these funds mirrored using this strategy beating the S&P 500 by 24.3% on an annualised risk-adjusted basis (though this is obviously backwards looking). I'm very keen to see if this outperforms the non-Halal version of the funds. Especially as the Shariah Screened S&P 500 has outperformed the conventional one due to tech and growth exposure, can this be replicated elsewhere? I want to make this accessible ( https://rihaliq.com ) by presenting the Halal opportunities, quantitatively ranking them (through Sharpe ratio performance etc).

However, I only think a limited amount of fund managers are suitable for this approach and would probably not be of use for people to follow. This is due to both Islamic compliance and the time lag involved in reporting positions. Some strategies, such as event-driven strategies or strategies involving significant hedging, make disclosed positions less useful by the time they are reported. Other highly speculative strategies may also not align with Islamic investing principles.

Therefore, I think the most obvious category to start with is long-only managers with long holding periods. These managers have disclosures that are more likely to represent their actual investment philosophy.

A first cohort I think might be useful is:

1. Berkshire Hathaway (Warren Buffet/Greg Abel)
2. Fundsmith (Terry Smith)
3. TCI Fund Management (Chris Hohn)
4. Himalaya Capital (Li Lu)

They all have 

- Strong past performance

- Holds things for a very long time making the risk of positions being churned a lot low.

- Doesn't have a lot to do with market neutral strategies, long/short pairs, etc so makes the signals we get from disclosures more clear. 

I have a lot of the quantitative stuff already made from another personal project so I can hopefully have this available in the coming weeks so stay tuned.  In the mean time I would love some community input about managers you'd like to see in the first cohort, how you'd like it presented, how do you think good Islamic investing strategies can be put together, and anything else that comes to mind. Also happy to answer any questions about this or general Islamic finance discussion topics. I will be posting findings about this as I come across them.

Salam all, thanks for the kind responses to my last post. I was honoured to see such interest in my background in working in Islamic finance as a university student and hearing your general thoughts and questions. 

Alongside many other aspirations people have for Islamic finance, I learnt that people want help finding Halal investment opportunities. A lot of people (including myself) have criticisms about the lack of options besides the Shariah Screened S&P 500 etc which are far too concentrated in big tech and AI. 

One solution that I've received positive feedback on both from people here and elsewhere is creating Islamic research portfolios that aren't that same S&P 500 formation.

So how can we do this? I read a paper ( https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5399672 ) about how copying institutional fund's 13-Fs can mirror the returns of the funds. With the top quartile of these funds mirrored using this strategy beating the S&P 500 by 24.3% on an annualised risk-adjusted basis (though this is obviously backwards looking). I'm very keen to see if this outperforms the non-Halal version of the funds. Especially as the Shariah Screened S&P 500 has outperformed the conventional one due to tech and growth exposure, can this be replicated elsewhere? I want to make this accessible ( https://rihaliq.com ) by presenting the Halal opportunities, quantitatively ranking them (through Sharpe ratio performance etc).

However, I only think a limited amount of fund managers are suitable for this approach and would probably not be of use for people to follow. This is due to both Islamic compliance and the time lag involved in reporting positions. Some strategies, such as event-driven strategies or strategies involving significant hedging, make disclosed positions less useful by the time they are reported. Other highly speculative strategies may also not align with Islamic investing principles.

Therefore, I think the most obvious category to start with is long-only managers with long holding periods. These managers have disclosures that are more likely to represent their actual investment philosophy.

A first cohort I think might be useful is:

1. Berkshire Hathaway (Warren Buffet/Greg Abel)

2. Fundsmith (Terry Smith)

3. TCI Fund Management (Chris Hohn)

4. Himalaya Capital (Li Lu)

They all have 

- Strong past performance

- Holds things for a very long time making the risk of positions being churned a lot low.

- Doesn't have a lot to do with market neutral strategies, long/short pairs, etc so makes the signals we get from disclosures more clear. 

I have a lot of the quantitative stuff already made from another personal project so I can hopefully have this available in the coming weeks so stay tuned.  In the mean time I would love some community input about managers you'd like to see in the first cohort, how you'd like it presented, how do you think good Islamic investing strategies can be put together, and anything else that comes to mind. Also happy to answer any questions about this or general Islamic finance discussion topics. I will be posting findings about this as I come across them.

Salam all, thanks for the kind responses to my last post. I was honoured to see such interest in my background in working in Islamic finance as a university student and hearing your general thoughts and questions.

Alongside many other aspirations people have for Islamic finance, I learnt that people want help finding Halal investment opportunities. A lot of people (including myself) have criticisms about the lack of options besides the Shariah Screened S&P 500 etc which are far too concentrated in big tech and AI.

With the community being spread out geographically giving regulated advice is difficult and launching an ETF is very expensive. One solution that I've received positive feedback on both from people here and elsewhere is creating Islamic research portfolios. These are going to be available on https://rihaliq.com very soon for free but I need some input.

So how can we do this? I read a paper ( https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5399672 ) about how copying institutional fund's 13-Fs can mirror the returns of the funds. With the top quartile of these funds mirrored using this strategy beating the S&P 500 by 24.3% on an annualised risk-adjusted basis (though this is obviously backwards looking). I'm very keen to see if this outperforms the non-Halal version of the funds. Especially as the Shariah Screened S&P 500 has outperformed the conventional one due to tech and growth exposure, can this be replicated elsewhere? I want to make this accessible by presenting the Halal opportunities, quantitatively ranking them (through Sharpe ratio performance etc), and breaking them down by strategy.

However, I don't think a limited amount of fund managers are suitable for this approach and would probably not be of use for people to follow. This is due to both Islamic compliance and the time lag involved in reporting positions. Some strategies, such as event-driven strategies or strategies involving significant hedging, make disclosed positions less useful by the time they are reported. Other highly speculative strategies may also not align with Islamic investing principles.

Therefore, I think the most obvious category to start with is long-only managers with long holding periods. These managers have disclosures that are more likely to represent their actual investment philosophy.

A first cohort I think might be useful is:

1. Berkshire Hathaway (Warren Buffet/Greg Abel)

2. Fundsmith (Terry Smith)

3. TCI Fund Management (Chris Hohn)

4. Himalaya Capital (Li Lu)

They all have

- Strong past performance

- Holds things for a very long time making the risk of positions being churned a lot low.

- Doesn't have a lot to do with market neutral strategies, long/short pairs, etc so makes the signals we get from disclosures more clear.

I have a lot of the quantitative stuff already made from another personal project so I can hopefully have this available in the coming weeks so stay tuned. In the mean time I would love some community input about managers you'd like to see in the first cohort, how you'd like it presented, how do you think good Islamic investing strategies can be put together, and anything else that comes to mind. Also happy to answer any questions about this or general Islamic finance discussion topics. I will be posting findings about this as I come across them.

I have formally studied Islamic finance, gained qualifications in it, and currently work in the industry part time as a university student. As far as the industry has come in the past few years I've noticed that there's still a big gap between what's out there and what people actually want.

For instance, I've noticed a lot of push back towards Islamic stock screening. For those who don't already know, a stock is considered Halal by the most standards in the industry if the interest bearing debt is <30% of market cap, cash and interest bearing securities is <30% of market cap, and impermissible (gambling, alcohol etc etc) revenues are <5% of revenues. This seems to get a noticeable amount of push back both here and more broadly amongst Islamic finance consumers. Namely because it doesn't differentiate between a company that behaves ethically and one who may be involved in things like forced labour and other activities against Islamic moral standards.

I have made a first attempt at a solution. I released a free screening tool which uses the traditional screen for the total pass or fail criteria (it's made by scholars and I am not one so I won't redesign the compliance criteria) but on top of this it scores the companies on a scale of whether they behave ethically. It does this by finding reputable citations of un-ethical actions (weighed by severity and how long ago it was, e.g. an anti-trust violation 30 years ago isn't given as large of a penalty as being found to use forced labour last month). It also looks for client relationships with impermissible companies if they can be verified which is sometimes tricky because this often isn't disclosed.

This is the tool ( https://rihaliq.com ) it currently works for over 5,200 stocks and reads directly from regulatory filings. I would love some feedback on what people would like to see. I am trying to make it into a full Islamic investing platform so I would love to hear about features people actually want from the industry. This can range from changes to the screening methodology or ways you want the screening applied.

One thing I'm trying to solve is showing good Halal opportunities without giving unlicensed investment advice. I'm currently working on tracking top fund managers investments and showing the compliant ones to people, is this something people would like to see or would something else be more useful to you? Happy to implement anything of use.

I have formally studied Islamic finance, gained qualifications in it, and currently work in the industry part-time while I'm at university. As far as the industry has come over the past few years, I've still noticed a fairly big gap between what's available and what people actually want.

For example, I've seen quite a bit of pushback towards the way Islamic stock screening is done. For those who aren't familiar, under most widely used standards a stock is considered halal if interest-bearing debt is less than 30% of market capitalisation, cash and interest-bearing securities are less than 30% of market capitalisation, and impermissible revenue (gambling, alcohol, etc.) is less than 5% of total revenue.

One criticism I see quite often is that this doesn't really differentiate between a company that simply meets those financial criteria and one that actually behaves in a way that's consistent with Islamic values. A company might pass the standard screen while still being involved in things like forced labour, repeated human rights violations or other clearly unethical behaviour.

I've been experimenting with ways of addressing that without changing the underlying scholarly screening methodology. The traditional pass/fail criteria remain exactly the same, but I also look at credible reports of unethical behaviour, taking into account both the severity and how recent the issue is. For example, an antitrust violation from decades ago wouldn't be treated the same as credible evidence of forced labour today. I've also been looking into client relationships with impermissible businesses where those relationships can actually be verified, although that information isn't always publicly disclosed.

I've put together a free prototype that applies these ideas to over 5,200 stocks using information from regulatory filings. If anyone is interested in seeing it, it's here: https://rihaliq.com.

More importantly though, I'd really like to know what people actually want from Islamic investing. If you feel current Islamic finance products are missing something, what is it? Are there features you wish existed, or parts of the screening methodology you'd like to see presented differently?

One thing I've been thinking about recently is how to help people discover good halal investment opportunities without crossing the line into giving unlicensed investment advice. One idea was to let users see the halal holdings of well-known fund managers rather than recommending stocks directly, but I'm curious whether that's actually something people would find useful, or if there are bigger problems that need solving first.

I'd genuinely appreciate any thoughts or criticism. I'm much more interested in building something that's actually useful to the community for achieving a Halal FIRE.

I have formally studied Islamic finance, gained qualifications in it, and currently work in the industry part-time while I’m at university. As far as the industry has come over the past few years, I’ve still noticed a fairly big gap between what’s available and what people actually want.

For example, I’ve seen quite a bit of pushback towards the way Islamic stock screening is done. For those who aren’t familiar, under most widely used standards a stock is considered halal if interest-bearing debt is less than 30% of market capitalisation, cash and interest-bearing securities are less than 30% of market capitalisation, and impermissible revenue (gambling, alcohol, etc.) is less than 5% of total revenue.

One criticism I see quite often is that this doesn’t really differentiate between a company that simply meets those financial criteria and one that actually behaves in a way that’s consistent with Islamic values. A company might pass the standard screen while still being involved in things like forced labour, repeated human rights violations or other clearly unethical behaviour.

I’ve been experimenting with ways of addressing that without changing the underlying scholarly screening methodology. The traditional pass/fail criteria remain exactly the same, but I also look at credible reports of unethical behaviour, taking into account both the severity and how recent the issue is. For example, an antitrust violation from decades ago wouldn’t be treated the same as credible evidence of forced labour today. I’ve also been looking into client relationships with impermissible businesses where those relationships can actually be verified, although that information isn’t always publicly disclosed.

I’ve put together a free prototype that applies these ideas to over 5,200 stocks using information from regulatory filings. If anyone is interested in seeing it, it’s here: https://rihaliq.com

More importantly though, I’d really like to know what people actually want from Islamic investing. If you feel current Islamic finance products are missing something, what is it? Are there features you wish existed, or parts of the screening methodology you’d like to see presented differently?

One thing I’ve been thinking about recently is how to help people discover good halal investment opportunities without crossing the line into giving unlicensed investment advice. One idea was to let users see the halal holdings of well-known fund managers rather than recommending stocks directly, but I’m curious whether that’s actually something people would find useful, or if there are bigger problems that need solving first.

I’d genuinely appreciate any thoughts or criticism. I’m much more interested in building something that’s actually useful to the community than just adding another stock screener.

I have formally studied Islamic finance, gained qualifications in it, and currently work in the industry part time as a university student. As far as the industry has come in the past few years I've noticed that there's still a big gap between what's out there and what people actually want.

For instance, I've noticed a lot of push back towards Islamic stock screening. For those who don't already know, a stock is considered Halal by the most standards in the industry if the interest bearing debt is <30% of market cap, cash and interest bearing securities is <30% of market cap, and impermissible (gambling, alcohol etc etc) revenues are <5% of revenues. This seems to get a noticeable amount of push back both here and more broadly amongst Islamic finance consumers. Namely because it doesn't differentiate between a company that behaves ethically and one who may be involved in things like forced labour and other activities against Islamic moral standards.

I have made a first attempt at a solution. I released a free screening tool which uses the traditional screen for the total pass or fail criteria (it's made by scholars and I am not one so I won't redesign the compliance criteria) but on top of this it scores the companies on a scale of whether they behave ethically. It does this by finding reputable citations of un-ethical actions (weighed by severity and how long ago it was, e.g. an anti-trust violation 30 years ago isn't given as large of a penalty as being found to use forced labour last month). It also looks for client relationships with impermissible companies if they can be verified which is sometimes tricky because this often isn't disclosed.

This is the tool ( https://rihaliq.com ) it currently works for over 5,200 stocks and reads directly from regulatory filings. I would love some feedback on what people would like to see. I am trying to make it into a full Islamic investing platform so I would love to hear about features people actually want from the industry. This can range from changes to the screening methodology or ways you want the screening applied.

One thing I'm trying to solve is showing good Halal opportunities without giving unlicensed investment advice. I'm currently working on tracking top fund managers investments and showing the compliant ones to people, is this something people would like to see or would something else be more useful to you? Happy to implement anything of use.

I have formally studied Islamic finance, gained qualifications in it, and currently work in the industry part time as a university student. As far as the industry has come in the past few years I've noticed that there's still a big gap between what's out there and what people actually want.

For instance, I've noticed a lot of push back towards Islamic stock screening. For those who don't already know, a stock is considered Halal by the most standards in the industry if the interest bearing debt is <30% of market cap, cash and interest bearing securities is <30% of market cap, and impermissible (gambling, alcohol etc etc) revenues are <5% of revenues. This seems to get a noticeable amount of push back both here and more broadly amongst Islamic finance consumers. Namely because it doesn't differentiate between a company that behaves ethically and one who may be involved in things like forced labour and other activities against Islamic moral standards.

I have made a first attempt at a solution. I released a free screening tool which uses the traditional screen for the total pass or fail criteria (it's made by scholars and I am not one so I won't redesign the compliance criteria) but on top of this it scores the companies on a scale of whether they behave ethically. It does this by finding reputable citations of un-ethical actions (weighed by severity and how long ago it was, e.g. an anti-trust violation 30 years ago isn't given as large of a penalty as being found to use forced labour last month). It also looks for client relationships with impermissible companies if they can be verified which is sometimes tricky because this often isn't disclosed.

This is the tool ( https://rihaliq.com ) it currently works for over 5,200 stocks and reads directly from regulatory filings. I would love some feedback on what people would like to see. I am trying to make it into a full Islamic investing platform so I would love to hear about features people actually want from the industry. This can range from changes to the screening methodology or ways you want the screening applied.

One thing I'm trying to solve is showing good Halal opportunities without giving unlicensed investment advice. I'm currently working on tracking top fund managers investments and showing the compliant ones to people, is this something people would like to see or would something else be more useful to you? Happy to implement anything of use.

A bit niche but I think it’s useful. RihalIQ is a Halal stock screener. It lets you search over 5,200 stocks to see if they’re Halal to invest in and if the company behaves ethically. I’d love some feedback and some ideas on how to add value beyond just screening stocks if anything comes to mind.

https://rihaliq.com