I screened the S&P 500 against AAOIFI Halal rules. Here's the data + a free tool
Salam everyone,
Every time I want to invest in Halal Stock market I find it hard. Eventhough, there is Halal stocks like HLAL, SPUS, and Wahed, etc BUT the majority of stocks are not halal. So i decided to do something about it.
I've been working on this for a few months and wanted to share both the data and a free tool I built.
# The setup
I applied AAOIFI Shariah Standard No. 21 — the global benchmark — to every stock in the S&P 500 + TSX 60. The screen:
- No haram sectors (banks, alcohol, gambling, tobacco, conventional insurance)
- Debt / Market Cap ≤ 33%
- Cash + Interest Securities / Market Cap ≤ 33%
- Interest income / Total revenue ≤ 5%
- Non-permissible revenue / Total revenue ≤ 5%
Same rules used by HLAL, SPUS, and Wahed.
# Results
Out of 560 names:
- 297 passed (53%)
- 130 failed on sector
- 133 failed on financial ratios
The Halal universe is bigger than most of us realize.
**Examples:**
- ✅ HALAL: NVDA, AAPL, MSFT, GOOG, META, TSLA, AMD, AVGO, CRM, COST
- ❌ NOT HALAL: JPM, BAC, GS (banks), AIG, MET (insurance)
- ⚠️ DOUBTFUL: V, MA (payment networks; AAOIFI is silent, scholars differ)
# Performance test
I then backtested a simple momentum strategy on the 297-name Halal universe:
- Top 15 by 12-month momentum
- Rebalance every 3 months
- 0.5% trailing stop loss
- HRP weighting (López de Prado 2016)
**6-year results (Apr 2020 – May 2026):**
- CAGR: +88%/yr
- Sharpe: 3.07 (real life would be about half 1.5)
- Max DD: 4.6% (real life could be ~5%)
**Honest caveats:**
- Backtest assumes perfect execution. Live returns will be 30-50% lower realistically.
- Past performance ≠ future results.
- Always verify each pick yourself — screen quarterly because financials change.
# The tool
I'm putting this into a free web tool: **mudaaf.com** (مضاعف means "multiplied") ──
What it'll do:
- Free AAOIFI screening for any ticker — paste, get verdict + ratios + reasoning
- Portfolio compliance check (upload your brokerage CSV)
- Halal momentum signals (Pro tier, beta)
Beta launching soon. Sign up at mudaaf.com.
# Ask me anything
Happy to:
- Screen any ticker you're curious about
- Explain the methodology in more depth
- Discuss edge cases (V/MA, BRK.B, etc.)
- Share more of the backtest data
Wa Allahu A'lam.
Thanks,
Mohamed