I was asked to build a shariah stock strategy for the Australian market. The strategy excludes companies which generate most of their income from the sale of alcohol, pork products, pornography, gambling, military equipment or weapons, as well as companies which pay interest on debt.
The performance of the strategy is highlighted below. The portfolio starts with $50,000 in 2004 and ends up with $325,045 today. The strategy has low turn over with just 88 trades in the past 15 years and 7 months. However, as word of caution, it should be viewed as a screener rather than a strategy you could leave on auto pilot.
An investor still needs to do their own research to ensure each company individually complies. Nevertheless, it would dramatically cut down their research time.
If you want to dig into the details of this strategy, I’d be happy to share the strategy with you.
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