At Islamicly, we are committed to offering you the most trusted and rigorously governed ethical investment opportunities that align with Shariah principles. Islamicly Moons are curated portfolios of shariah compliant stocks designed to provide investors with access to investing styles of the referenced benchmark fund.
In this post, we will take you through the process of how Islamicly Moons are created, tracked for performance, and rebalanced to ensure a comprehensive end to end Shariah compliant investing experience. Additionally, we will cover how one can purify their non-permissible income.
How Islamicly Moons are Created?
Our Moons are meticulously crafted through a systematic approach that ensures compliance with Islamic financial principles. Here’s how we do it:
- Selection of Mutual Funds and ETFs
We begin by taking mutual funds and ETFs from global markets, ensuring that we capture a diversified and high-potential universe. These funds and ETFs should be comprised of listed equities. We eliminate such Funds/ETFs that have other asset classes in them. - Shariah Compliance Screening
The holdings of these selected funds undergo a rigorous Shariah screening process to eliminate non-compliant stocks. This screening is based on the rigorous screening methodology as set by the Islamicly’s globally reputed Board of Shariah scholars. See here for details: https://www.islamicly.com/home/screeningProcess - Market Cap-Weighted Allocation
Once the compliant stocks are screened, they are reassigned weights based on market capitalization to ensure a balanced and optimal portfolio structure. These weights are proportional to that individual stocks weight in the existing benchmarked fund/ETF. - Determining Stock Quantities
Based on the assigned weights, we determine the exact number of shares required for a minimum investable value. - Birth of Islamicly Moon!
The final portfolio, including stock weights and quantities, is published on the Islamicly website and app, resulting in an Islamicly Moon making it accessible to subscribed users. - One Click Access – Choose from the entire Moons universe the Model portfolio that best suits you. Click on the ”Invest Now” button at the bottom of the Moons details page. Select the number of units of this Moon that you want to invest, by login into your broker account and execute the basket order. Just simple clicks and you are invested.
All your Moon investments will be visible on the “My Holdings” section of the Islamicly Moons. These portfolios will be rebalanced and purification will be tracked and the amount to be purified will be displayed.
Tracking Moon Performance
To provide transparency Islamicly Moons are benchmarked and backtested against the performance of the benchmarked mutual fund or ETF from which they are derived. Here’s how:
- Performance Benchmarking
Each Moon’s performance is compared to the benchmarked fund’s performance, to evaluate returns over time. - 1-Year Backtested Data
We provide one year of backtested performance data on the Islamicly platform, allowing users to see how the Moon has historically performed. - Holding Distribution Transparency
Users can view the detailed distribution of stock holdings within each Moon to understand their portfolio allocation better. - Investor Dashboard Metrics
Users who are invested in Moons can track their performance on the Islamicly platform with the following key metrics:- Return on Investment (ROI)
- Current investment and current value
- Total investments and total value
- Dividends received
- Purifications done
- Rebalance events participated
Example: Moon Performance Overview
To illustrate how investors can track their Moon, let’s take an example:
Benchmark Fund: 360 ONE Quant Fund-Regular-Growth Option (Benchmark)
As on 1ˢᵗ Feb 2025, this fund comprises 35 Stocks and the number of compliant stocks are 18. The model portfolio includes only 11 stocks which are investible i.e. some compliant stocks are also eliminated for pricing value reasons.
Backtest Performance: Over the last year, this Moon delivered 17%, closely tracking the benchmark fund’s 10% growth.
Rebalancing the Moons
To ensure that the Moons remain aligned with the holdings of their benchmark fund and continue to uphold Shariah compliance, we implement regular rebalancing. This process involves:
- Reviewing the Benchmark Fund – Any changes in the holdings or structure of the original fund are captured.
- Adjusting the Portfolio – If stocks within the Moon need to be added, removed, or reweighted, we make the necessary adjustments to closely reflect the updated benchmark fund’s holding and the latest Shariah compliance of those stocks.
- Updating Investors – The updated Moon portfolio is published on the Islamicly platform for investors to follow and adjust their investments accordingly. You will be notified when a rebalance is due.
Purification of Non-Permissible Income
In Islamic investing, any non-compliant income must be purified by donating the impure portion to charity. Islamicly provides guidance on capital gain purification and dividend purification to help investors cleanse their earnings.
1. Capital Gain Purification
If a stock within a Moon becomes non-compliant during the investor’s holding period, the investor is required to purify the proportion of capital gains attributable to the non-compliant holding period. Islamicly provides:
- The exact amount of capital gains that needs to be purified by computing it precisely based on your actual holdings in the Moon.
- Guidelines on how and where to donate the amount.
2. Dividend Purification
Even if a stock is generally compliant, some revenue from its business activities might come from non-permissible sources. Investors need to purify the portion of dividends that stems from such impure activities. Islamicly calculates:
- The exact amount of non-compliant income in dividends that needs to be purified by computing it precisely based on your actual holdings in the Moon. No manual computations required!
Subscription to Islamicly Moons
Subscription to the Islamicly platform grants investors access to:
- A wide range of Shariah-compliant pre-built Model portfolios
- Transparent performance tracking and updates
- No commission fees/charges, just one subscription fee per market gives you access to wide range of Moons (Model portfolios)
Through Islamicly Moons, muslim investors can align their investment journey by practising ethical and religious values while benefiting from structured and well-researched Moons.
Shariah Compliance Certificate
Understand Islamicly Moons in 60 Seconds
Disclaimer: This video is for informational, educational, and promotional purposes only and does not constitute any financial advice. Consult your financial advisor before making any investment decisions. The securities quoted are for illustration only and are not recommendatory.
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Model Portfolio built by SEBI RA ( Registration No. INH200008024)
Start your ethical investment journey today! Subscribe to Islamicly and gain access to Moons (Model Portfolio). For more details visit Islamicly.
Important Note:
- Islamicly Moons is not an investment in the benchmark fund. It’s a basket of shariah compliant stocks derived out of the holdings of the Benchmarked Mutual Fund or ETF.
- All investment activities and fund management are executed by your consent on your own behalf by your registered broker according to their own terms & conditions.
- All investments in Islamicly Moons are held in your own custody via your broker and your stock depository. Islamicly is not a broker/share depository and hence does not take or hold your funds or stocks.
