S&P 500 vs S&P500 shariah

[sb_]

New to investing . I was wondering if someone can explain me in simple terms if one invests 100usd n S&P 500 and 100 usd shariah each month starting September for a year, what will be the difference in the investments ? Will the s&p500 make you more money than the shariah one and if so how much? Please oversimplify it

Edit : I’m not asking about the difference I know it’s halal I’m asking if the money I will make using the halal will be pretty much the same or more or less than if I’d use the normal

 

[princesst1]

@sb_ The S&P 500 are the top 500 companies across the US stock exchanges.

The S &P 500 Shari'ah is comprised only of stocks that shari'ah compliant.

Many stocks are within both but only S&P 500 Shari'ah is halaal.

 

[saram]

@sb_ It's difficult to say because they're different companies. The best way to compare it is with an equivalent index already made such as hsbc Islamic equity index .

You can see the companies and they're very similar, you can see the growth as well. But also some views exclude companies whilst others include it.

 

[swill]

@sb_ Yes one will earn you haram money the other will earn you halal money

 

[sb_]

@swill I’m not asking about the difference I know it’s halal I’m asking if the money I will make using the halal will be pretty much the same or more or less than if I’d use the normal

 

[calypso34]

@sb_ Not an expert but the islamic one makes little less it seems to my research. The non-islamic S&P contains stuff like tobacco and many investments in financial sectors. You should look up the ISIN and look which specific stocks they hold.

I'm from EU and compared a normal USA ETF and a Islamic USA ETF and by the looks of it, the Islamic one showed a little bit less profit than the normal one. Obviously things can change in the future and I'm still a beginner.

 

[joeuwa]

@sb_ IMHO, more with the halal. Two reasons:

• Islamic financing requires that companies with excess revenues derived from interest to be filtered out. This reduces exposure to the risk of bad debt or defaults.
• The S&P 500 shari'ah index reallocates more towards select growth stocks such as AAPL and TSLA whereas the standard S&P 500 index would have far less exposure.

So yes, in good times, the shari'ah S&P 500 index should return great performance but they can be very volatile in poor conditions. This is why I encourage exposure to halal international and emerging markets indices as a volatility hedge.