What makes an investment halal? A screening primer

«Is this stock halal?» is really two questions, applied in order.

Filter one: the business itself

Revenue from prohibited activity disqualifies a company outright:

• alcohol, tobacco, gambling and adult content;

• conventional banking and insurance built on riba;

• weapons in most scholarly frameworks.

Filter two: the balance sheet

A permissible business can still fail the financial screens. Common AAOIFI-style thresholds:

• interest-bearing debt below ~30% of market capitalisation;

• interest income below ~5% of total revenue — and even that sliver must be purified by donating it.

The honest caveat

Screens differ between standards bodies, and a fund's label is only as good as its last audit. Read the methodology, not the marketing.