Halal, or sharia, investing means owning a piece of companies or financial instruments that comply with Islamic principles. A lot of conventional investment products do not comply with Islamic principles, for example, profiting off debt is not allowed meaning that products such as conventional bonds cannot be used within a halal portfolio. Also halal investing excludes certain industries such as alcohol, tobacco, gambling, prohibited foodstuffs, adult entertainment and weapons among others.

To provide exposure to global companies (equities) our investment team use products that comply with the MSCI Islamic series to exclude non-Shariah-compliant securities through business activity and financial ratio screening.

MSCI’s Shariah advisors’ committee of Sharia scholars approves the following methodology:

Business activity screens:

Shariah investment principles do not allow investment in companies, which are directly active in, or derive more than 5% of their revenue (cumulatively) from the following activities (“prohibited activities”):

• Alcohol
• Tobacco
• Pork
• Conventional Financial Services
• Defence / Weapons
• Gambling / Casinos
• Music
• Hotels
• Cinema
• Adult Entertainment

Financial screening:

Shariah investment principles do not allow investment in companies deriving significant income from interest or companies that have excessive leverage. MSCI uses the following three financial ratios to screen for these companies:

• Total debt over total assets
• Sum of a company’s cash and interest-bearing securities over total assets
• Sum of a company’s accounts receivables and cash over total assets

Securities will be considered non-compliant with respect to financial screening if any of the financial ratios exceeds 33.33%

The COCOA halal portfolios provide global diversification by providing exposure to companies involved in the following sectors:

• Telecommunications
• Materials
• Industrials
• Consumer
• Consumer Staples
• Utilities
• Energy
• Healthcare
• IT
• Financials
• Real Estate
• Government
• Diversified
• Murabaha and Cash

There is no allowance for traditional fixed income products such as bonds under shariah principles. Therefore the COCOA halal portfolios include Sukuk instruments to provide an equivalent risk-reducing income-producing asset class.

Our halal Investment Plans provide you with diversified global exposure to telecommunications, materials, industrial, consumer goods, consumer staples, utilities, energy, healthcare, IT, financials, real estate, governments sectors and use Murabaha and Cash.

Our halal portfolios are certified as compliant to Islamic investing principles and are designed to provide you with long-term growth while protecting you through diversification.

With COCOA you can set up multiple Investment Plans one for each goal you have and each with a different risk profile if you wish, we use a scale of 1 – 5 to make it easy to identify risk. So each time you set up a new plan we will ask you to select the risk level that is right for the plan. We describe what each risk level means to help you select the right choice. The higher risk portfolios tend to have more exposure to global companies and less sukuks (Islamic bonds), but also have a higher potential of reward.

The maximum we charge for full management of your Investment Plans is 0.99% per year of your total assets between USD 100 and USD 49,999. The lowest fee bracket we charge is 0.29% per year if we manage over USD 500,000 for you. For a complete breakdown please see our fees section and you can always review your fees on your personal COCOA dashboard.

With COCOA Circles you can reduce your fees even further by introducing people to the benefits of COCOA where all the members in your Circle benefit from even lower fees.

Yes, we use certified Islamic compliant Exchange Traded Funds (ETFs) to provide some of the exposure to global companies. We use these as they provide certified, cost-effective diversified exposure.

No. Traditional bond products are not allowed under Islamic law as they pay interest. Instead, we use certified sukuks products, the Islamic compliant version of bonds, issued by companies and governments.

The COCOA halal portfolios use a passive investment strategy to provide exposure to numerous industry sectors including telecommunications, industrials, consumer goods, healthcare, IT and utilities amongst others. We also use actively managed mutual funds where there is a greater need for interaction and management of the underlying investments. COCOA’s investment team actively manage the mix of investments in your plans to ensure you remain invested in the right assets and sheltered from any headwinds. 

We created the halal portfolios in conjunction with one of the worlds largest asset managers and we utilise methodology approved by MSCI’s Shariah advisors’ committee of scholars.

Additionally part of our investment screening and on-going management process involves a rigorous due diligence review to ensure we only invest in instruments that have been certified as Shariah compliant by an independent review board.

No, this is our job as your investment manager. You only need to select the level of risk you are happy with and tell us how much you would like to invest. We will then build your personal investment plan to meet your saving goals.

Our experienced investment team has approved a universe of certified halal funds from which to build your investment plan and continuously monitor and adjust it to ensure you remain on track.

Yes, of course. Anyone who passes as a suitable investor can invest in a halal portfolio with COCOA.

Our halal investment portfolios are designed to provide risk-adjusted long-term growth in line with your investment style just like conventional investment portfolios with the added benefit that they also comply with Islamic principles.