Investor Dictionary

Simple explanations of common investment terms, written for everyday investors.

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Halal Investing

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Halal Investing

Investing in ways allowed by Islamic law - avoiding interest, gambling, alcohol, and anything harmful or unethical.

01/22

Riba

02/22

Riba

Any guaranteed or added interest on a loan, prohibited because it is unfair and exploitative.

02/22

Fractional Shares

03/22

Fractional Shares

Buying a small portion of a stock instead of a full share.

03/22

Maysir

04/22

Maysir

Gambling or earning money based on pure chance, which is forbidden.

04/22

Gharar

05/22

Gharar

Excessive uncertainty in a contract, such as unclear terms or unknown outcomes.

05/22

Shariah Compliance

06/22

Shariah Compliance

Ensuring that financial products and investments follow Islamic rules and ethics.

06/22

ETFs

07/22

ETFs

A basket of many stocks or assets traded like a single share on the stock market.

07/22

AAOIFI Standards

08/22

AAOIFI Standards

Global standards ensuring Islamic finance products comply with Shariah. Key screening ratios include: Interest‑bearing debt ≤ 30% of market cap; Interest‑earning investments ≤ 30% of market cap; Non‑permissible income ≤ 5% of total revenue.

08/22

Sukuk

09/22

Sukuk

Islamic 'bonds' representing ownership in an asset, with returns from real economic activity instead of interest.

09/22

Mutual Funds

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Mutual Funds

A pool of money from many investors that is managed professionally to invest in various assets.

10/22

Trading

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Trading

Buying and selling assets to make profit while avoiding interest, gambling, and unethical activities.

11/22

Green Finance

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Green Finance

Funding environmentally beneficial projects such as clean energy.

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Halal Stocks

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Halal Stocks

Shares of companies operating in Shariah‑permitted industries and passing Islamic screening rules.

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Bonds

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Bonds

A loan given to a government or company in exchange for interest (not allowed in Islamic finance).

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Green Sukuk

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Green Sukuk

Sukuk issued specifically to fund eco‑friendly projects.

15/22

Murabaha

16/22

Murabaha

A cost‑plus sale where the bank buys an item and sells it to you at a marked‑up price, paid over time without interest.

16/22

IPO

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IPO

When a company sells its shares to the public for the first time.

17/22

ESG

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ESG

Standards measuring how environmentally, socially, and ethically responsible a company is.

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Mudaraba

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Mudaraba

A partnership where one party provides money and the other provides expertise, sharing profits.

19/22

REITs

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REITs

Companies that own or manage income‑producing real estate and allow investors to buy shares in them.

20/22

Ijara

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Ijara

A lease contract where you pay to use an asset without owning it.

21/22

Istisna

22/22

Istisna

A contract to manufacture or construct something according to agreed specifications and deliver it later.

22/22

Mudaraba

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Mudaraba

A partnership where one party provides money and the other provides expertise, sharing profits.

19/22

REITs

20/22

REITs

Companies that own or manage income‑producing real estate and allow investors to buy shares in them.

20/22

Ijara

21/22

Ijara

A lease contract where you pay to use an asset without owning it.

21/22

Istisna

22/22

Istisna

A contract to manufacture or construct something according to agreed specifications and deliver it later.

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