Is Wealthsimple Halal? A Comprehensive Guide for Ethical Investors

I know you want investments that align with your faith. You may wonder, is wealthsimple halal? Surprisingly, over 65% of Muslim investors seek Shariah-compliant products. I promise to show you how Wealthsimple meets Islamic principles while outlining its challenges.

Keynote: Is Wealthsimple Halal?

Yes, Wealthsimple is halal if you choose its dedicated Halal portfolio. It follows Shariah compliance by excluding interest-bearing and non-permissible companies. Strict oversight, quarterly dividend purification, and certified screening ensure adherence to Islamic financial principles. Use the Halal option for ethical investing and avoid non-compliant Wealthsimple services like savings accounts.

Halal Investing: Core Principles from Islamic Finance

Quranic Foundation

Halal investing follows clear Islamic law. The Quran states in 2:275, “Those who consume interest cannot stand except as one stands…”. This verse reminds us that riba, or interest, is strictly forbidden. Islamic law also bans excessive uncertainty (gharar), gambling (maysir), and support for haram industries such as alcohol, tobacco, adult entertainment, and weapons manufacturing.

Islamic financial institutions and advisory firms insist that investment products be rooted in tangible economic activity. This approach protects you from undue risk and ensures the underlying index reflects genuine market quality and diversification.

Key Requirements

Halal investing demands clear criteria. You must avoid interest-bearing assets like bonds and conventional banking instruments. Companies that earn more than 5% of their income from prohibited activities are excluded.

Dividend purification is essential. Any impure income is set aside for charity. This method, which relies on a low volatility index and strict screening, safeguards your investment portfolio and aligns with Islamic investing principles.

By following these guidelines, you can pursue an equity portfolio that meets both your financial goals and Islamic law. I encourage you to review your investment strategy regularly. This ensures compliance with shariah while achieving sustainable growth.

Wealthsimple Unveiled: A Modern Investment Platform

What Is Wealthsimple?

Wealthsimple is a Canadian robo-advisor based in Toronto. It manages a diverse range of investment products. Its user-friendly platform offers managed investing, self-directed trading, and other financial services. Wealthsimple is known for its low management expense ratio and automated rebalancing. You can access various asset classes like ETFs, stocks, gold, and cash holdings.

This platform is designed for investors who value both technological ease and ethical investing. Its approach resonates with Muslim Canadians and investors around the world who follow Islamic investing principles. Wealthsimple’s innovative methods simplify the stock market for many, without sacrificing adherence to shariah.

Halal Investing Portfolio

Wealthsimple offers a distinct Halal portfolio. Launched in 2017 and updated in 2021, this portfolio centers on the Wealthsimple Shariah World Equity Index ETF (WSHR). The ETF tracks the Dow Jones Islamic Market Developed Markets Quality and Low Volatility Index. It is built on a robust screening methodology that excludes companies involved in conventional banking, insurance companies, and other non-halal sectors.

The portfolio consists of 90% equities and 10% gold. This mix avoids interest-bearing bonds and minimizes volatility. It provides diversification by including top holdings from various regions such as Canada, the United Kingdom, and the United States. This structure meets Islamic law and appeals to investors who seek halal investment opportunities.

Wealthsimple’s Halal Compliance: A Deep Dive

Certification & Oversight

Wealthsimple’s Halal portfolio is certified by a team of Islamic researchers. These experts use a rigorous Fund Fatwa to verify that the portfolio meets shariah compliance. Third-party audits occur semi-annually, and the process is overseen by ratings intelligence partners.

This strong oversight gives you confidence that the underlying index adheres to Islamic principles. Regular reviews ensure that companies with over 5% income from haram activities are removed promptly.

Portfolio Composition

The portfolio is structured with a focus on equity. Ninety percent of investments are in the Wealthsimple Shariah World Equity Index ETF (WSHR). This ETF tracks over 150 Shariah-compliant global stocks.

Companies such as Nestlé, Coca-Cola, Johnson & Johnson, Novartis AG, and many others form its top holdings. The ETF uses a screening based on market capitalization and risk level rather than mere size. This ensures a blend of quality and low volatility index measures.

The remaining 10% is invested in gold. Gold acts as a stable, tangible asset free from interest and excessive leverage. This mix upholds both diversification and adherence to Islamic investing principles. By avoiding conventional fixed-income instruments, Wealthsimple offers an investment portfolio that respects Islamic law.

Below are key details on the top holdings and sector weightings in the ETF:

Top 10 Holdings of Wealthsimple Shariah World Equity Index ETF (WSHR)

Security Name	Weight
Singapore Telecommunications	1.1%
Swisscom AG-Reg	1.1%
Coca-Cola Co/The	1.0%
Johnson & Johnson	1.0%
Secom Co LTD	1.0%
Otsuka Holdings Co LTD	0.9%
Novartis AG	0.9%
PepsiCo Inc	0.9%
Mondelez International Inc-A	0.9%
SGS SA-REG	0.9%

Sector Weightings of Wealthsimple Shariah World Equity Index ETF (WSHR)

Sector	Weight
Consumer Staples	15.5%
Health Care	13.9%
Industrials	13.4%
Information Technology	12.4%
Consumer Discretionary	11.6%
Materials	10.6%
Energy	7.7%
Real Estate	5.6%
Communications	5.1%
Financials	3.3%
Utilities	0.9%

Dividend Purification

Dividend purification is a vital process. Wealthsimple reviews dividend income quarterly. If a company in the ETF earns any non-halal dividend, the impure portion is calculated. This amount is then donated to charity.

This process ensures that your income remains pure and compliant with Islamic financial institutions and shariah law. By maintaining a clear methodology, Wealthsimple reassures you that every dividend meets Islamic investing principles.

Strengths and Weaknesses: Is Wealthsimple Truly Halal?

Pros

Wealthsimple’s Halal portfolio has many strengths. It offers low management fees, usually between 0.4% and 0.5%. Free perks, such as no fees on the first $5,000, make it appealing.

Automated rebalancing and regular audits by a team of Islamic researchers add to its credibility. This equity fund is designed for medium-to-high risk investors who seek diversification across global markets. The investment strategy focuses on quality and low volatility index metrics, making it a strong option for long-term growth.

Cons

There are also challenges. Wealthsimple’s Halal portfolio is geographically limited to Canada and the United States. It does not include sukuk or Islamic bonds, which may suit lower risk levels.

Some investors must trust the automated screening process. Additionally, not all Wealthsimple services follow Islamic principles. For instance, their savings accounts pay interest, and margin accounts charge interest (riba). This can create confusion if you mix halal and conventional banking products.

Hadith Insight

As the Prophet said, “Leave what makes you doubt for what does not…” (Sahih al-Bukhari 1476). This hadith reminds us to choose options that clearly meet ethical and religious standards. It guides you to select investments with transparent methodologies and Shariah compliance.

Expert Opinions and Practical Considerations

Scholar Endorsements

Many scholars endorse the Wealthsimple Shariah World Equity Index ETF. They agree that the screening criteria and Fund Fatwa provide confidence. However, you must conduct personal due diligence.

I encourage you to consult a portfolio manager or an advisory firm that specializes in Islamic finance. This extra step helps align your financial goals with Islamic principles.

Challenges for Investors

You may face practical challenges. The self-directed investing platform does not filter for halal investments. This means you must review your holdings carefully. Manual screening is sometimes necessary if you want to adhere strictly to shariah law.

Also, certain companies like Nu Holdings, a digital bank, may appear in the ETF. Though their income from conventional banking is under the permitted 5%, it still raises questions among some Muslim investors.

Balancing ethical investing with market capitalization and risk level is not always simple. The debate continues over whether all holdings in the ETF truly meet Islamic investing principles. Nonetheless, Wealthsimple’s focus on low volatility index and diversified sectors gives you a balanced approach.

Step-by-Step Guide: How to Invest Halal with Wealthsimple (2025)

1. Sign Up: Create your account in about five minutes.
2. Select Portfolio: Choose the Halal Investing option.
3. Risk Assessment: Adjust the ratio of stocks to gold based on your risk level.
4. Fund & Monitor: Deposit funds with no minimum requirement and track quarterly compliance reports.
5. Review Reports: Check dividend purification and third-party audit updates.
6. Stay Informed: Regularly consult your portfolio manager and Islamic financial institutions for guidance.

This step-by-step guide makes it easy for you to invest while staying true to Islamic law. It helps maintain your financial goals and keeps your investment portfolio aligned with shariah.

Alternatives to Wealthsimple: Comparing Halal Platforms

While Wealthsimple provides a robust halal investment portfolio, you may want to compare other platforms to meet your precise financial needs. Alternatives include:

Wahed Invest:
Wahed Invest is a dedicated halal investing platform. It is fully Shariah-certified with a global diversification approach. However, its management fee is around 0.99%, which may affect long-term returns.

Azzad Ethical Funds:
Azzad offers mutual funds that include sukuk and follow socially responsible investing practices. They balance Islamic principles with environmental, social, and governance criteria. This option may suit those seeking a mix of halal investment portfolio and ethical considerations.

Manzil:
Manzil is a Canadian firm that caters to Muslim Canadians. It provides shariah-compliant funds and home financing. Their focus is on delivering investment products that meet Islamic law, making them a strong alternative.

Below is a comparison table that outlines key features:

Platform	Management Fee	Key Features
Wealthsimple	0.4–0.5%	Automated portfolios, Shariah-compliant ETF
Wahed Invest	0.99%	Dedicated halal platform, global diversification
Azzad Ethical Funds	Varies	Access to sukuk, ESG-focused investments
Manzil	Varies	Shariah-compliant funds, Canadian-focused

When comparing these platforms, consider the management expense ratio, expense ratio, and the rigor of shariah compliance. Look at factors such as market size, underlying index performance, and the team of Islamic researchers behind the products. This ensures that you select an option that truly meets both your ethical standards and financial goals.

Conclusion: Aligning Faith and Finance with Confidence

Wealthsimple’s Halal portfolio offers you an ethical way to grow your wealth. Its adherence to Islamic law, shariah compliance, and clear dividend purification set it apart. As you review your investment strategy, remember the importance of aligning financial goals with Islamic principles.

I encourage you to seek advice from knowledgeable scholars and portfolio managers. Reflect on the words of the Prophet: “The halal is clear, and the haram is clear…” (Sahih Bukhari 2083). This wisdom should guide you as you pursue a balanced, shariah-compliant investment journey.

Wealthsimple Halal or Haram (FAQs)