How We Screen
Shariah Stocks
A globally trusted, scholar-backed methodology — refined over 25 years
and trusted by 300,000+ investors across 90+ markets.
What is
Shariah Screening?
Shariah equity screening is a dynamic process to determine if investment in the equity of a listed company is permissible from a Shariah perspective.
Shariah Equity screening is guided by a Shariah Equity Screening Criteria.
- 1Level 1: Business Sector
- 2Level 2: Financial Ratios
- 3Level 3: Purification
What is a Shariah-compliant Equity investment?
Investments made in equity stocks, screened in accordance with Shariah principles under the guidelines of Shariah supervisory board are called Shariah-compliant equity investments.
Such Shariah equity screening is used by Islamic investors to identify a list of Shariah permissible stocks to invest in, while managing their Shariah compliant portfolio of stocks.
A Shariah-compliant stock needs to pass sector based and accounting ratio screens.
Our Uniqueness
- 1 We follow established Shariah screening criteria set up by our well known Shariah Advisory Board.
- 2 Our Shariah Equity Screening platform gives Islamic investors access to a pre-screened, real-time universe of Shariah-compliant stocks.
- 3 We update the screening on a daily basis to reflect the most recent market cap information as well as the latest available financial numbers.
- 4 We have a team of dedicated researchers who manually review the business sectors of each company and carefully identify the non-permissible revenues, so as to assign the most accurate Shariah compliance status to each stock.
- 5 The key to Shariah equity screening lies in accurately understanding the business and revenue models of each stock and assigning compliance under the guidance of Shariah scholars. Islamicly has developed this process over 25+ years of experience in this industry.
Our 3-level screening framework.
Every stock passes through three rigorous, scholar-validated checks before earning a Shariah rating.
Business Sector Screening
The business of a company will be conducted in accordance with Shariah principles as interpreted by the Shariah Advisor.
Companies that are involved in the below activities are screened out:
If revenue from any excluded activity exceeds 5%, the stock fails Level 1 and is marked Not Compliant. Below 5%, it advances to Level 2 with proportional dividend purification at Level 3.
From Input To Final Rating
5 rigorous, transparent, scholar-validated steps.
User searches a stock on the Islamicly app or web platform.
Proprietary database pulls latest filings, financials, and market data daily.
Dedicated analysts perform qualitative and fundamental screening with sector classification.
A board of renowned Shariah scholars reviews and validates the screening methodology.
A clear Shariah compliance rating delivered in real-time inside the Islamicly app.
Where Our Numbers Come From
Annual reports, 10-K, 10-Q, regulatory disclosures
Quarterly earnings, balance sheets, income statements
Official investor presentations and corporate communications
Trusted third-party financial data providers
Globally Recognized Scholars
Our methodology is supervised by an independent committee of internationally renowned Islamic finance scholars.
Former Director of the Centre for Research in Islamic Economics, King Abdulaziz University. Member of AAOIFI Shariah Standards Council.
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Director of the Centre of Excellence in Islamic Economics & Finance at Kuwait University. AAOIFI member.
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Internationally renowned expert in Islamic jurisprudence with prolific contributions to contemporary fiqh of transactions.
Read MoreOther Notes
Use of audited results or unaudited results
In determining Shariah compliance, we use the latest financial statement regardless of whether the latest statement is a quarterly, semi-annual, or annual statement. Annual statements are typically audited while quarterly and semi-annual statements are often left unaudited.
Interim or quarterly results
We use the latest statement regardless of whether the latest statement is a quarterly, semi-annual, or annual one. If the latest statement is available in all of these three formats, the annual statement will be preferred, since it is more likely to be audited and often more complete.
Companies that are fully Shariah-compliant not subject to accounting-based screens
Companies that are fully Shariah-compliant are not subject to accounting-based screens, subject to Shariah Board approval. Such companies are classified as Shariah-compliant irrespective of their leverage ratios. While the subsequent list is non-exhaustive and companies are reviewed on a case-by-case basis, companies are typically characterized by the following:
Presence of a Shariah Supervisory Board. All transactions (business and financial) are in accordance with Shariah principles. Incorporated and managed in a fully Shariah-compliant manner.
Stocks reviewed daily are published to the Islamicly APP & WEB platform which enables ease of Compliance information retrieval by DIY investors.