A Canadian startup is throwing its hat in the ring of the $5.4 trillion halal financing market.
What happened: Toronto fintech Manzil launched its first-ever halal exchange-traded fund (ETF) on Nasdaq yesterday, with plans to roll out a suite of similar investment products in Canada over the next year.
Catch-up: Halal ETFs fill a gap for many Muslims who don’t invest in companies or products tied to alcohol, gambling, or weapons. They also notably avoid any financial services that involve interest, including mortgages.
- For example, with a typical halal mortgage, the lender will calculate how much interest would be paid over the course of a traditional mortgage and charge that amount as an upfront fee.
- Manzil alone has doubled its halal mortgage business in Canada in less than a year, with $100 million in financing now on the books.
Why it matters: Halal investments are an increasingly popular alternative to traditional stocks, for Muslims and non-Muslims alike. A recent study found that Islamic investments even outperform conventional indexes like the S&P 500 in the short term during times of crisis.
Zoom out: Total assets in halal or Shariah-compliant funds doubled to $60 billion between 2013 and 2023, with major players like CIBC, RBC, and Wealthsimple now offering some halal-screened investment products in Canada.—LA