Diversified Long-Term Growth
Build a diversified portfolio of Shariah-screened index products and equity funds for steady, long-term wealth building. The most straightforward approach for Muslim investors in India
How It Works
Choose a fund house or open a demat account
Shariah mutual funds can be bought directly from the fund house or through any mutual fund platform with PAN and standard KYC; SIPs start from Rs 100. The Shariah ETF needs a demat account with any SEBI-registered broker.
Select your Shariah-screened products
The Nippon India ETF Nifty 50 Shariah BeES tracks the Nifty50 Shariah index in one fund. Tata Ethical, Taurus Ethical, and Quantum Ethical are the actively managed Shariah-screened equity funds.
Set your allocation
Decide how much to put in screened equity funds, the index ETF, and gold. Your allocation depends on your risk tolerance and time horizon.
Invest regularly and rebalance annually
Set up automatic SIP contributions and rebalance once or twice a year. The key is consistency: time in the market beats timing the market.
Why Choose This Strategy?
Things to consider ▾
• Market downturns will affect your portfolio in the short term
• Shariah indices exclude financials and some sectors, creating natural tilts
Diversified halal index investing is the most straightforward way for Muslim investors to grow wealth in the stock market. Instead of picking individual stocks, you buy funds that hold dozens of Shariah-compliant companies.
In India, the halal index product tracks the Nifty50 Shariah index. Companies are screened for both business activity (no alcohol, gambling, conventional finance, etc.) and financial ratios (debt levels, interest income percentages) to ensure compliance.
The biggest advantage of this approach is simplicity and cost. Tata Ethical Fund charges a 0.61% direct-plan TER and the Shariah BeES ETF a 0.82% base expense ratio, both low by Indian fund standards. You get broad diversification automatically, reducing the risk that any single stock hurts your portfolio.
The main trade-off is that Shariah indices exclude financial sector stocks and other non-compliant industries, creating natural sector tilts. This means your performance will differ from the overall market, sometimes better, sometimes worse.
Example Portfolio Allocation
Example Halal Portfolio
Balanced Long-Term
This is an illustrative example only and does not constitute financial or investment advice. Actual allocations should be determined with a qualified financial advisor based on your individual circumstances. Past performance does not guarantee future results.
Frequently Asked Questions
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Reviewed quarterly and updated for major content changes.
Sources and review process
This page is reviewed against HalalWallet editorial standards and source documentation.
Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-03-09