Zakat on InvestmentsCheck if the fund publishes a zakat rate. Some Islamic ETFs publish an annual zakat per unit figure. SPUS does not currently publish this. Use a conservative estimate. In the absence of fund-level data, apply 2.5% to the full market value. This is an overestimate but errs on the side of caution. Apply to the nisab-eligible portion. Zakat is only due if your total zakatable wealth exceeds the nisab (value of 85 grams of gold or 595 grams of silver — check current rates). Hawl (one lunar year). Zakat is only due if the asset has been held for a complete lunar year.
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Calculating Zakat on Investment Portfolios
A practical guide to calculating and paying zakat on Shariah-compliant ETFs, shares, and sukuk holdings.
Is Zakat Due on Investments?
Yes — investments are subject to zakat if the investor intends to trade (i.e., the investment is not purely for long-term hold). The nisab threshold and 2.5% rate apply.
The Standard Approach for Listed Equities
For shares and ETFs, the most widely accepted scholarly opinion is the look-through approach:
*Zakat = 2.5% × (Net Assets per Share × Shares Held)*
Where Net Assets per Share is calculated as the fund's zakatable assets (cash, receivables, and zakatable inventory) per share, divided by total shares outstanding.
Practical Steps for ETF Investors
Important Note
This is general information, not a fatwa. Consult a qualified Islamic scholar or Shariah advisor for rulings specific to your situation. Zakat calculations can be complex and depend on individual circumstances.