There has been a long-standing demand from Shariah sensitive investors in the United States of America for Shariah-compliant equities available on US stock markets. In this blog we will help you explore more details about Shariah compliance of equities listed in America. Let us discuss a few basic stuff first relating to shariah investing.
What is Halal?
Halal in Islam means permissible from a Shariah law perspective.
What is Shariah Compliant?
Shariah compliant refers to those activities which are permissible in accordance with the Shariah principles.
Is Investing in Stocks Halal?
Yes, trading in equity stock of companies listed on stock exchanges are absolutely permissible with conditions that such companies qualify the Shariah screening standards set up by the Shariah Scholars.
What is The Shariah Equity Screening Methodology?
Scholars and Shariah boards around the world have set up a set of rules to screen equities. Please check the Shariah Screening Criteria here: https://www.islamicly.com/home/screeningProcess
List of Top 10 Companies In USA By Market Capitalization & Their Shariah Compliance Status
| Ticker | Company | Market Cap. | Compliance |
|---|---|---|---|
| AAPL | Apple Inc | $3.35 Trillion | Halal |
| MSFT | Microsoft Corp | $3.19 Trillion | Halal |
| NVDA | NVIDIA Corp | $3.45 Trillion | Halal |
| GOOG | Alphabet Inc | $2.43 Trillion | Halal |
| AMZN | Amazon.com, Inc. | $2.43 Trillion | Halal |
| META | Meta Platforms Inc | $1.55 Trillion | Halal |
| TSLA | Tesla Inc | $1.33 Trillion | Halal |
| BRK.B | Berkshire Hathaway Inc | $1.01 Trillion | Not Halal |
| LLY | Eli Lilly and Co | $704.72 Billion | Halal |
| UNH | UnitedHealth Group Inc | $483.14 Billion | Not Halal |
How Many Halal (Shariah Compliant) Stocks are There in the United States?
Many Islamic investors in the USA do not know whether the stocks listed on US Stock Exchanges are Shariah Compliant. Yes, a lot of listed companies in America are doing HALAL business and they have been classified as Shariah-compliant. You will be surprised to know that about 49.02% of total listed stocks in USA comply with Shariah Principles, as you can see in the graph below:
Shariah Compliant Equities in USA
Shariah Compliance of various business sectors in USA
Listed Companies in the USA can be classified into 78 business sectors, broadly. Sector wise Shariah compliance of companies listed in the USA can be seen below:
Shariah Compliant Stocks in USA based on Sector Wise
| Sector | Compliant | Non – Compliant | Grand Total |
| Advertising | 2 | 0 | 2 |
| Aerospace & Defense | 2 | 1 | 3 |
| Airline | 1 | 0 | 1 |
| Apparel/Accessories | 5 | 0 | 5 |
| Auto & Truck Parts | 1 | 1 | 2 |
| Basic Materials | 353 | 221 | 574 |
| Beverages (Alcoholic) | 0 | 2 | 2 |
| Beverages (Non-alcoholic) | 0 | 0 | 0 |
| Biotechnology & Drugs | 12 | 9 | 21 |
| Business Services | 5 | 2 | 7 |
| Capital Goods | 282 | 178 | 460 |
| Chemical Manufacturing | 1 | 2 | 3 |
| Chemicals – Plastics & Rubber | 0 | 1 | 1 |
| Communications Equipment | 3 | 2 | 5 |
| Communications Services | 2 | 0 | 2 |
| Computer Hardware | 1 | 1 | 2 |
| Computer Networks | 0 | 1 | 1 |
| Computer Services | 0 | 1 | 1 |
| Conglomerates | 1 | 2 | 3 |
| Construction – Raw Materials | 0 | 1 | 1 |
| Construction Services | 0 | 2 | 2 |
| Consumer Cyclical | 184 | 146 | 330 |
| Consumer Financial Services | 0 | 2 | 2 |
| Consumer/Non-Cyclical | 140 | 182 | 322 |
| Containers & Packaging | 1 | 1 | 2 |
| Crops | 0 | 1 | 1 |
| Electric Utilities | 5 | 4 | 9 |
| Electronic Instr. & Controls | 0 | 1 | 1 |
| Energy | 133 | 185 | 318 |
| Financial | 398 | 1060 | 1458 |
| Food Processing | 0 | 1 | 1 |
| Forestry & Wood Products | 0 | 1 | 1 |
| Furniture & Fixtures | 1 | 0 | 1 |
| Gold & Silver | 3 | 0 | 3 |
| Healthcare | 1030 | 503 | 1533 |
| Healthcare Facilities | 8 | 3 | 11 |
| Insurance (Accident & Health) | 0 | 1 | 1 |
| Insurance (Life) | 0 | 1 | 1 |
| Insurance (Miscellaneous) | 0 | 1 | 1 |
| Insurance (Prop. & Casualty) | 0 | 1 | 1 |
| Investment Services | 5 | 11 | 16 |
| Iron & Steel | 2 | 1 | 3 |
| Medical Equipment & Supplies | 5 | 3 | 8 |
| Metal Mining | 6 | 1 | 7 |
| Misc. Fabricated Products | 1 | 0 | 1 |
| Misc. Financial Services | 34 | 6 | 40 |
| Misc. Transportation | 3 | 1 | 4 |
| Mobile Homes & RVs | 0 | 1 | 1 |
| Money Center Banks | 0 | 1 | 1 |
| Motion Pictures | 0 | 2 | 2 |
| Oil & Gas Operations | 5 | 4 | 9 |
| Oil Well Services & Equipment | 2 | 0 | 2 |
| Personal & Household Prods. | 3 | 1 | 4 |
| Personal Services | 1 | 0 | 1 |
| Photography | 1 | 1 | 2 |
| Real Estate Operations | 1 | 2 | 3 |
| Recreational Activities | 0 | 1 | 1 |
| Recreational Products | 1 | 2 | 3 |
| Regional Banks | 0 | 4 | 4 |
| Rental & Leasing | 1 | 0 | 1 |
| Restaurants | 2 | 2 | 4 |
| Retail (Apparel) | 1 | 0 | 1 |
| Retail (Catalog & Mail Order) | 1 | 0 | 1 |
| Retail (Grocery) | 1 | 0 | 1 |
| Retail (Home Improvement) | 1 | 0 | 1 |
| Retail (Technology) | 4 | 0 | 4 |
| Schools | 2 | 0 | 2 |
| Scientific & Technical Instr. | 1 | 0 | 1 |
| Security Systems & Services | 0 | 1 | 1 |
| Services | 498 | 929 | 1427 |
| Software & Programming | 12 | 16 | 28 |
| Technology | 853 | 506 | 1359 |
| Tires | 0 | 1 | 1 |
| Tobacco | 0 | 1 | 1 |
| Transportation | 76 | 138 | 214 |
| Trucking | 1 | 0 | 1 |
| Utilities | 33 | 141 | 174 |
| Waste Management Services | 2 | 0 | 2 |
| Grand Total | 4133 | 4298 | 8431 |
Shariah Compliant Investment Options in USA
Being a Shariah Sensitive investor, you have multiple options in America to make your investments in a Shariah Compliant manner. Some Shariah compliant investment options are listed below:
1. Shariah Compliant equity stocks
2. Shariah Compliant Mutual Funds
3. Shariah Compliant ETFs
4. Shariah Compliant Indices
5. Shariah Compliant Sukuk
Some famous mutual funds, ETFs and Indices that follow Shariah principles are mentioned below:
1. Falah Capital Iman Fund
2. Iman Fund
3. Wahed FTSE USA Shariah ETF (HLAL)
4. S&P 500 Shariah Stocks
5. Wahed S&P Shariah Fund
6. Halal Dividend Stocks
7. FTSE USA Shariah Index
Disclaimer: Islamicly has not verified the Shariah compliance authenticity of the above listed avenues. Please exercise your judgment before proceeding.
Stock Exchanges in USA
In USA, there are multiple stock exchanges. Some of the Popular Stocks exchanges are mentioned below:
| Exchange Name | Location |
|---|---|
| New York Stock Exchange (NYSE) | New York |
| National Association of Securities Dealers Automated Quotations (NASDAQ) | New York |
| Standard and Poor’s 500(S&P500) | New York |
| The Chicago Board of Trade (CBOT) | Chicago |
| The Chicago Mercantile Exchange (CME) | Chicago |
| The Philadelphia Stock Exchange (PHLX) | Philadelphia |
| The Miami Stock Exchange (MS4X) | Miami |
| The Boston Stock Exchange (BSE) | Boston |
| The Chicago Stock Exchange (CHX) | Chicago |
| The Chicago Board Options Exchange (CBOE) | Chicago |
| The International Securities Exchange (ISE) | New York |
| The National Stock Exchange (NSX) | New Jersey |
Two of the above US stock exchanges set an example for the world to follow in stock trading. Let us see those major and popular stock exchanges.
1. NYSE – The New York Stock Exchange
2. Nasdaq Stock Market
NYSE – The New York Stock Exchange
NYSE is an American stock Exchange that leads the world in stock markets. It’s famous for being the largest stock exchange in the world, by market capitalization of its listed stocks. This stock exchange is unique in its style of having the nick name “The Big Board”.
The exchange was established in 1792 and got its current name in 1863. The Bank of New York was the first company that got listed on this exchange.
All classes of shares, stocks, bonds, mutual funds, derivatives and exchange traded funds as well as other financial instruments are traded.
Markets
The stock exchange has 5 markets to list different class of equities and stocks. Those markets are:
1. NYSE
2. NYSE American
3. NYSE Acra Equities
4. NYSE Chicago
5. NYSE national
NASDAQ
Nasdaq Stock Exchange known as NASDAQ is an American stock exchange. NASDAQ is also very famous in the world and plays a key role in the capital market.
This is the second largest stock exchange by market capitalization of shares traded.
This is the first stock exchange that started as the world’s first electronic stock market. It operates three different market tiers:
1. Capital Market – It lists the equities of small market cap companies.
2. Global Market – It lists mid-cap equities from global markets.
3. Global Select Market – this lists only large-cap based stocks which represent Global Select Market Composite.
How Can Islamicly Help You Find Shariah Compliant Stocks in USA?
Islamicly App is a single point of search for Halal stocks where you can search stocks to know their real time Shariah compliance.
Through this App, you can find Shariah compliant stocks, check the entire universe of stocks in USA for their Shariah compliance, create a portfolio of stocks of your choice and monitor their halal status as well as request for Shariah screening of stocks which might not be covered yet.
You can also participate in discussions happening on Islamicly app through the various forums on the app and you will find all sorts of handy information regarding this app in the profile section. Isn’t it amazing?
