Asslamualycum,
I am in my mid-20s, trying to understand the best way to set up auto investing into halal index funds that will safely grow over time for either retirement or future use. I am not an expert in this area, but after listening to hours of video content about halal ETFs, real estate, and mutual funds to invest in and also reading quite a few Reddit posts in the last few months, here is where I sort of landed. Please... please feel free to correct me if you either strongly disagree or think that my investment setup is not ideal for valid, true reasons.
As a Muslim and firm believer in halal, long-term investing, there aren't a ton of platforms or guides that will explicitly guide you through exactly what you need to do to set up your investments from start to finish. THIS Reddit post is also not going to achieve that for you unfortunately and I strongly want to caveat by saying THIS IS NOT A FINANCIAL ADVICE and I am just trying to both clarify and potentially start a guide for how a young professional Muslim individual should aim to set up their portfolio for long term investing for retirement for specifically.
As far as I have done my research, I have 2 different routes that I would suggest to a friend who is also Muslim and specifically wants to invest most easily, with less hassle, less maintenance, and a straightforward way to set up my investment portfolio.
Honestly, for most folks who are either new or have very limited skills or time to study up or invest into learning how to invest their money in the long run, I would suggest, this is the easiest way you could set up your portfolio, with almost no hassle, no monthly maintenance approach. I used to have this until I recently decided to switch over to Fidelity.
The main reason is the annual management fee of 0.49% or 0.79%, which can eat away at my investment in the long run. Otherwise, Wahed Invest is amazing. All I had to do was create a new account, link my bank account, and set up a specific amount of money I wanted to automatically withdraw from my bank account to my investment account. Wahed Invest walks you through a list of steps 1 by 1, so anyone with very minimal knowledge of investing can set it with no issues.
One small recommendation with Wahed, they will ask you to choose a specific risk tolerance for your investments. For young professionals like myself, I recommend you choose the most aggressive or aggressive option as long as you have set a goal to invest in the long run (i.e., 25 to 30 years).
Investment Funds Wahed Invest Use (as far as I know):
- Wahed FTSE USA Shariah ETF (HLAL)
- Wahed DOW JONES Islamic World ETF (UMMA)
- SPDR Gold Minishares (GLDM)
- Amana Participation Institutional (AMIPX)
- SP FUNDS DOW JONES GLOBAL SUKUK ETF (SPSK)
- Cash
Halal ETF Fidelity Portfolio Baskets (WHAT I USE):
I have recently switched to this strategy b/c of a couple of reasons:
- SP FUNDS S&P 500 SHARIA INDUSTRY EXCLUSIONS ETF (SPUS) => 70%
- WAHED DOW JONES ISLAMIC WORLD ETF (UMMA) => 10%
- SP FUNDS DOW JONES GLOBAL SUKUK ETF (SPSK) =>
- SPDR GOLD MINISHARES TRUST (GLDM) => 5%
- SP FUNDS S&P GLOBAL REIT SHARIA ETF (SPRE) => 5%
- SP FUNDS S&P WORLD EX-US ETF (SPWO) => 5%
Again, most of the funds as you can see with Fidelity are pretty much the same as with Wahed Invest, but the only difference is less annual management fee. If Fidelity Portfolio Baskets remain at $4.99/mo, that is still far cheaper than the 0.49% management fee. Thus, I decided to go with Fidelity for now.
I wanted to share more of my thoughts, but this post is getting quite long now, so I will stop here.
I would love to get some feedback from experts who have already invested in halal funds with other institutions maybe and see what they think. Kind education feedback would be useful for many Muslims living in the US to build wealth in a halal way. Thanks!
I am in my mid-20s, trying to understand the best way to set up auto investing into halal index funds that will safely grow over time for either retirement or future use. I am not an expert in this area, but after listening to hours of video content about halal ETFs, real estate, and mutual funds to invest in and also reading quite a few Reddit posts in the last few months, here is where I sort of landed. Please... please feel free to correct me if you either strongly disagree or think that my investment setup is not ideal for valid, true reasons.
As a Muslim and firm believer in halal, long-term investing, there aren't a ton of platforms or guides that will explicitly guide you through exactly what you need to do to set up your investments from start to finish. THIS Reddit post is also not going to achieve that for you unfortunately and I strongly want to caveat by saying THIS IS NOT A FINANCIAL ADVICE and I am just trying to both clarify and potentially start a guide for how a young professional Muslim individual should aim to set up their portfolio for long term investing for retirement for specifically.
As far as I have done my research, I have 2 different routes that I would suggest to a friend who is also Muslim and specifically wants to invest most easily, with less hassle, less maintenance, and a straightforward way to set up my investment portfolio.
- Go with Wahed Invest (EASIEST WAY)
- Halal ETF Fidelity Portfolio Baskets (WHAT I USE)
Honestly, for most folks who are either new or have very limited skills or time to study up or invest into learning how to invest their money in the long run, I would suggest, this is the easiest way you could set up your portfolio, with almost no hassle, no monthly maintenance approach. I used to have this until I recently decided to switch over to Fidelity.
The main reason is the annual management fee of 0.49% or 0.79%, which can eat away at my investment in the long run. Otherwise, Wahed Invest is amazing. All I had to do was create a new account, link my bank account, and set up a specific amount of money I wanted to automatically withdraw from my bank account to my investment account. Wahed Invest walks you through a list of steps 1 by 1, so anyone with very minimal knowledge of investing can set it with no issues.
One small recommendation with Wahed, they will ask you to choose a specific risk tolerance for your investments. For young professionals like myself, I recommend you choose the most aggressive or aggressive option as long as you have set a goal to invest in the long run (i.e., 25 to 30 years).
Investment Funds Wahed Invest Use (as far as I know):
- Wahed FTSE USA Shariah ETF (HLAL)
- Wahed DOW JONES Islamic World ETF (UMMA)
- SPDR Gold Minishares (GLDM)
- Amana Participation Institutional (AMIPX)
- SP FUNDS DOW JONES GLOBAL SUKUK ETF (SPSK)
- Cash
Halal ETF Fidelity Portfolio Baskets (WHAT I USE):
I have recently switched to this strategy b/c of a couple of reasons:
- I did not want to pay the annual management fee of 0.49% b/c fees can eat away on my return
- I wanted to control what ETF funds I wanted to invest into
- SP FUNDS S&P 500 SHARIA INDUSTRY EXCLUSIONS ETF (SPUS) => 70%
- WAHED DOW JONES ISLAMIC WORLD ETF (UMMA) => 10%
- SP FUNDS DOW JONES GLOBAL SUKUK ETF (SPSK) =>
- SPDR GOLD MINISHARES TRUST (GLDM) => 5%
- SP FUNDS S&P GLOBAL REIT SHARIA ETF (SPRE) => 5%
- SP FUNDS S&P WORLD EX-US ETF (SPWO) => 5%
Again, most of the funds as you can see with Fidelity are pretty much the same as with Wahed Invest, but the only difference is less annual management fee. If Fidelity Portfolio Baskets remain at $4.99/mo, that is still far cheaper than the 0.49% management fee. Thus, I decided to go with Fidelity for now.
I wanted to share more of my thoughts, but this post is getting quite long now, so I will stop here.
I would love to get some feedback from experts who have already invested in halal funds with other institutions maybe and see what they think. Kind education feedback would be useful for many Muslims living in the US to build wealth in a halal way. Thanks!