Is investing in the stock market halal?

Yes. Investing in stocks of companies that pass Shariah screening is considered halal by mainstream Islamic scholars. The key is ensuring the company's business activities and financial ratios comply with Islamic finance principles. Use a halal stock screener to verify compliance before investing.

How much money do I need to start halal investing?

You can start small. Several Islamic unit trusts in Malaysia accept initial investments from RM500 to RM1,000, Shariah robo portfolios start from RM100 or less, and Shariah ETFs on Bursa Malaysia can be bought one board lot (100 units) at a time through a brokerage account. There's no large minimum required to begin halal investing.

What's the difference between halal ETFs and halal mutual funds?

Both hold baskets of Shariah-compliant stocks. ETFs trade on Bursa Malaysia through a brokerage account and typically carry lower management fees; Eq8 Capital lists three Shariah ETFs tracking Dow Jones and MSCI Islamic indices. Unit trusts are bought from the fund manager or platforms, need no brokerage account, and actively managed equity funds charge more, plus sales charges that can reach several percent through some channels. ETFs are generally cheaper; unit trusts are easier to access.

Do I need to purify my investment income?

Yes. Most scholars require 'purifying' returns from stocks that have a small amount of impermissible income within the SC's benchmarks. You calculate the impermissible percentage and donate that portion to charity. Malaysian Islamic funds handle purification at fund level under their Shariah advisers' guidance, so fund investors can rely on the fund's process.

Are pension and provident fund accounts halal?

The account types themselves are permissible; what matters is what the fund invests in. EPF Simpanan Shariah moves your retirement savings to a portfolio certified by the EPF Shariah Advisory Committee, and Shariah-approved PRS funds regulated by the SC invest only in Shariah-compliant assets, with PRS contributions eligible for tax relief. Check your fund's holdings and Shariah certification.

Is investing through Tabung Haji halal?

Yes. Tabung Haji is Malaysia's pilgrims fund board, established to help Muslims save for Hajj through Shariah-compliant investment. Deposits are invested under Shariah supervision and returns are distributed as hibah. It is a savings institution rather than a market investment, so treat it as the low-risk part of your plan, not a substitute for diversified investing.

Complete Guide for Beginners

How to Invest Halal in 2026

A step-by-step guide for investors in Malaysia. Learn which investments are Shariah-compliant, how the SC's Shariah screening works, and how to build a diversified halal portfolio.

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SC Shariah-compliant securities list

Reviewed by: HalalWallet Editorial Team•Last reviewed: 2026-03-06•Disclosure: No provider pays for placement or ranking on this page. Editorial policy and full disclosures.

Understand What Makes an Investment Halal

Halal investing means your money goes into businesses and activities that comply with Islamic law. This excludes companies involved in alcohol, gambling, conventional banking (interest), weapons, tobacco, and adult entertainment. It also requires that a company's financial ratios, like debt-to-assets, fall within acceptable limits.

Learn about screening standards

Choose Your Investing Approach

There are three main approaches: (1) Hands-off: Use an Islamic unit trust from an SC-licensed fund manager, or a Shariah robo portfolio, and let them handle screening. (2) Index investing: Buy Shariah ETFs listed on Bursa Malaysia that track Islamic indices. (3) Stock picking: Check stocks against the SC's List of Shariah-Compliant Securities and pick individual compliant stocks yourself.

Take our quiz to find your approach

Open an Account: Fund Manager, Robo, or Brokerage

For unit trusts you open an account directly with the fund manager or through platforms, with minimums as low as RM500 on core funds in our data. Robo-advisors are even lower: Wahed starts from RM100 and StashAway's Shariah portfolio has no minimum. For stocks and ETFs you need a Bursa Malaysia brokerage account with a CDS account; any broker works if you stick to compliant stocks and avoid margin financing.

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Screen Your Investments for Compliance

For individual stocks, start with the SC's List of Shariah-Compliant Securities, published by the Shariah Advisory Council and updated twice a year (May and November). It applies business activity benchmarks (non-compliant activities capped at 5 or 20 percent of revenue depending on type) and financial ratio benchmarks (cash and interest-bearing debt each below 33 percent of total assets). For funds, read the Shariah certification and the fund's information memorandum.

Learn how screening works

Build a Diversified Halal Portfolio

Don't put all your money in one stock. A simple structure for Malaysia: a Shariah ETF or Islamic equity unit trust for growth, an Islamic money market fund for near-term savings, and EPF Simpanan Shariah plus a Shariah PRS fund for retirement (PRS contributions can qualify for tax relief). Add sukuk fund exposure if you want lower-volatility assets.

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Monitor, Purify, and Rebalance

Compliance status can change when companies take on debt or enter new business lines; the SC republishes its list every May and November for exactly this reason. Check holdings against the latest list, follow your fund manager's purification guidance, and rebalance at least once a year to maintain your target allocation.

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Explore Halal Investment Types

Each type suits different goals, experience levels, and time commitments.

Shariah ETFs

Low-cost Bursa Malaysia exposure

Mutual Funds

Actively managed halal portfolios

Money Market Funds

Low-risk parking for savings

SC Screening

Check any Bursa stock's compliance

Brokerages

Self-directed halal trading

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Frequently Asked Questions

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Average score: 63/100

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Quick Answer

To invest halal in Malaysia, screen investments for Shariah compliance: avoid companies with excessive debt, interest income, or involvement in prohibited industries like alcohol and gambling. Use SC-licensed Islamic unit trusts, Shariah ETFs on Bursa Malaysia, Shariah robo portfolios, or the SC's List of Shariah-Compliant Securities to build a compliant portfolio.

Key Takeaways

Check individual Bursa Malaysia stocks against the SC's List of Shariah-Compliant Securities, updated every May and November
Eq8 Capital's Shariah ETFs (EQ8MY25, EQ8MID, EQ8US50) offer diversified halal Bursa exposure
Islamic unit trusts and Shariah robo portfolios automate halal screening and purification
EPF Simpanan Shariah and Shariah PRS funds cover Shariah-compliant retirement saving
Gold, real estate, and GoP Ijarah Sukuk are traditional halal assets

Sources and review process

This page is reviewed against HalalWallet editorial standards and source documentation.

Reviewed by: HalalWallet Editorial Team

Last reviewed: 2026-03-08

How to cite this page

Preferred format:

HalalWallet. “How to Invest Halal in Malaysia 2026: A Complete Beginner's Guide.” HalalWallet, https://www.halalwallet.asia/how-to-invest-halal. Accessed 2026-08-07.

For time-sensitive claims (rates, fees, state availability), please verify directly with the provider's official documentation and note the retrieval date.

Important: HalalWallet provides educational information and comparisons to help you explore halal financial options. We do not provide financial, legal, or religious advice. Product structures and Shariah compliance oversight vary by provider. Always verify halal compliance directly with providers and consult with qualified Islamic finance advisors or scholars for guidance on specific products and your individual circumstances.