Halal investing
Investing without compromising on how
Screened schemes exist in India and have done for years, though there are very few of them. Here is how the screening works, how small the choice is, and where our role ends.
Before anything else
We are not a Shariah board
We are not a Shariah board and we do not certify any investment as compliant. Screening is carried out by the scheme's own Shariah supervisory board and the index provider it follows. We can explain how that screening works and show you who performed it.
Whether a particular investment is right for you as a matter of religious obligation is a question for a scholar you trust. We will not answer it for you, and you should be wary of anyone selling investments who does.
Screening, in the literal sense
It is called screening because that is what it is. Companies go in at the top, what does not pass is held back, and what comes through is what the scheme may hold.
- 01
What the business does
Companies whose main business is alcohol, gambling, tobacco, pork, weapons, adult entertainment or conventional interest-based banking and insurance are excluded outright.
- 02
How it is financed
What is left is measured against financial limits — how much interest-bearing debt the company carries, how much interest income it earns, and how much of its revenue comes from impermissible sources.
- 03
What comes through
The companies that pass both screens form the universe a screened scheme may hold. It is reviewed regularly, and a company that stops passing is removed.
The part people find surprising
Most people expect the first screen — that a scheme will not hold a brewery or a casino. The second screen is the one that catches them out. A company can sell something entirely permissible and still fail, because of how it is financed.
A business that funds itself largely through interest-bearing debt, or that earns a meaningful share of its income as interest, will not pass. That is why the list of screened companies is shorter than people expect, and why it changes.
There is no single standard
There is no single global Shariah standard for screening listed companies. Different boards and index providers apply different thresholds and different denominators, so a company can pass one screen and fail another. Always check which standard a scheme follows.
Some boards measure debt against a company’s market value; others measure it against total assets. The thresholds differ too. This is not a detail — it is the reason two people can both be careful and still reach different answers about the same company.
How small the choice actually is
India has fewer than half a dozen Shariah-screened mutual fund schemes, and almost all of them are equity. That is the whole shelf. It means screened options cannot sensibly cover every goal — particularly short horizons, or money you will need soon — and it is why we distribute the full range of schemes rather than only screened ones.
Almost all equity
Conventional debt pays interest, so the screened shelf is overwhelmingly equity. There is no screened equivalent of a liquid fund to park money you need in a year.
Few managers
A handful of schemes means a handful of managers and strategies. You cannot spread across approaches the way a broad shelf allows.
Concentrated differently
Screening excludes conventional banks and financial companies, which are a large part of the Indian market. A screened portfolio will behave differently — sometimes better, sometimes worse.
None of that is a reason not to invest this way. It is a reason to go in knowing what the shelf looks like, and to be honest about which goals it can and cannot cover. Where a screened option does not fit a goal, we will say so rather than force it.
Count last checked 2026-09-26. New schemes do launch occasionally — check current scheme information before you rely on it.
Purification
Even a company that passes both screens may earn a small amount of income that is not permissible — typically interest on cash it holds at a bank. Screening tolerates this only while it stays small.
The usual practice is to work out that proportion and give it away, keeping only the rest. Many schemes that follow a Shariah mandate publish a purification figure for this purpose. Whether it applies to you, and how you calculate it, is a question for your scholar.
What we will not tell you
- That an investment is permissible for you — that is a scholar's answer, not ours
- That we have certified or approved anything as compliant
- That screening removes market risk — it does not, and it never has
- That any scheme is guaranteed, recommended or best
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.