What Is Halal Investing And How You Can Be Part Of It

You might have heard of the term “Halal Investing” floating around recently. That’s because Malaysia has been taking steps in making our country the destination for Halal-based businesses.

The Halal industry is expected to grow to $113.2 billion by 2030 and will contribute at least 8.1% towards GDP in 2025. This industry is growing from strength to strength. The Halal Industry Master Plan 2030 has led to a rising demand for Islamic-based financing and Shariah-compliant investments.

So, if you’re thinking about jumping into Halal Investing, we’re here to help you by telling you what it all means and how you can be part of it.

Understanding Halal Investing and what it is

In its simplest form, Halal Investing is essentially investments that are Shariah-compliant and more recently, a form of socially responsible investing.

As it is a form of investment based on Shariah principles, they must follow the key tenets of Islam that protect and preserve the areas of religion, life, intellect, family, and property.

With those key tenets in mind, you can think of Halal Investments to comprise of the following points:

• It is asset-based investments
• It should not include riba/usury (unjust, exploitative gains)
• It should not include activities that are considered Haram or unlawful in the tenets of Islam (marketing/manufacture of alcohol, pork and pork products, etc.)
• Gambling or any form of Gharar is prohibited.

The different types of Halal Investing

Now that you understand the principles of Halal Investing, what exactly are the types of Halal investments that you can participate in?

Compared to how it was before, there are now a ton of options available that you can invest in while still adhering to the guidelines within Halal Investing. Here are some of them:

Funds and Unit Trusts

Funds such as mutual funds and unit trusts can fall within halal investments if they match halal principles. Amanah Saham Nasional Berhad (ASNB) or Tabung Haji are some of the more well-known Islamic funds available in Malaysia.

Sukuks

In Islamic finance, Sukuk is similar to bonds but differs in the fact that it is not debt-based. For conventional bonds, investors generally get profit from interests based on the loan (which is haram). For Sukuk, the investors profit from the investment income, which ensures it remains halal.

Shariah-compliant stocks

Stocks are acceptable as a form of Halal Investment, provided they are Shariah-compliant. Just make sure that the company does not operate in prohibited industries or is considered an excessively risky investment, then it’s perfectly acceptable to add them as part of your portfolio.

Gold or precious metals

Gold (or any form of precious metals) can be a type of Halal Investment and is a fairly common form of investment that many Malaysians participate in.

There are several ways that you can start investing in gold, either through an exchange-traded fund (ETF), digital gold (e-gold, gold investment account), or by just getting physical gold (coin, bar, jewellery) itself.

Introducing Funding Societies: A platform for Halal Investing

As you can see, there are a lot of options when it comes to halal investments but choosing one that best suits your needs can be overwhelming.

This is where Funding Societies come in with its Guaranteed Islamic Investment Notes (GN-i).

Funding Societies understands the demand for Islamic investment products in Malaysia and they aim to bridge this gap with their latest offering.

With GN-i, you can start your journey towards Halal Investing with confidence as the product is structured based on Commodity Murabahah (via Tawarruq arrangement).

Why invest in GN-i? Because of the unique benefits that you get to enjoy when you invest in the new Funding Societies product:

• 100% Shariah-compliant investment notes
• Guaranteed principal and returns up to 8%* p.a.
• Investment tenor of up to 24 months
• Low entry of investment starting from RM100
• Stable and low-risk returns

*Before service fees and taxes

What’s more, Funding Societies makes it easy for you to get started with an easy online registration process and a seamless investing experience through its mobile application.

The movement towards Halal Investments will continue to grow as Malaysia expands its halal industry. With Funding Societies’ GN-i, you can be part of the movement and diversify your portfolio with investments that are aligned with Shariah principles.