High-Conviction Halal Investing for Muslim Investors
Actively managed, concentrated portfolios screened to a stricter standard than AAOIFI. Open to U.S. and international investors. Minimum investment is $100,000. Retirement accounts welcome.
CFA CharterholderTwo Ways to Invest with Us
Two ways to invest. Same portfolio. Same research. Same active management. The fee structure depends on your eligibility under SEC rules.
FLAT FEE PLAN
For All Investors
Open to any investor meeting the $100,000 minimum.
A 2% annual management fee on the first $250,000, reduced to 1.5% on assets above $250,000. No performance fee. No lockup. No exit penalty. You do not need to be an accredited investor, a qualified client, or anything else. If you are a Muslim investor with $100,000 to deploy and a brokerage account at Schwab or Interactive Brokers, this track is open to you. Retirement accounts (IRA, Roth IRA, rollover 401(k)) included.
Performance-Based PLAN
For Qualified Clients
Reserved for clients meeting the SEC's qualified client definition under Rule 205-3.
Zero management fee. We earn 20% only on profits above a 5% annual hurdle, with a high watermark so we never charge twice on the same gains. If we do not beat the hurdle, you pay nothing. SEC rules restrict performance-based fees to qualified clients (generally, $2.2M+ net worth excluding primary residence, or $1.1M+ in assets under our management). This structure is available only to investors who meet that definition.
Meet Your Portfolio Manager
Rakaan Kayali, CFA
Founder, Halal Alpha
Founder, Practical Islamic Finance
Muslim investors should not have to choose between their faith and their returns. That conviction is why Halal Alpha exists. The industry’s standard answer to halal investing has been to offer index-tracking funds with broad screens and call it done, asking the Muslim investor to accept market returns at best, pay a fee for the privilege, and do so under a screening standard that allows up to 5% impermissible revenue.Halal Alpha is built on a stricter screen and a different methodology. As a CFA charterholder and Registered Investment Adviser, Rakaan applies institutional research methodology to concentrated portfolios, grounded in fundamental analysis and benchmarked honestly against the S&P 500 rather than against softer halal indices.The work is public. Rakaan’s daily research at Practical Islamic Finance is read by more than 25,000 Muslim professionals across the United States and the Gulf, and every position discussed there carries a multi-year track record any prospect can audit before committing capital. Halal Alpha is where that same methodology is implemented for clients. Rakaan lives in Dallas with his family.
10+ Years
Islamic Finance Experience
CFA Charterholder
Investment Expertise
25,000+
Daily PIF Research Readers
Built on a Public Research Track Record
Halal Alpha was founded by the team behind Practical Islamic Finance to bring institutional-grade portfolio management to halal-conscious investors. PIF is the daily halal investment research read by more than 25,000 Muslim professionals across the United States and the Gulf, with 700+ paying subscribers and a multi-year public archive of every position covered. The research methodology you read in PIF is the same methodology we apply for Halal Alpha clients. The work is public. The analysis is available for review.
How We Compare to Wahed, Amana, and Other Halal Funds
Most halal investment options follow a similar template: broad screens applied to broadly diversified funds, benchmarked against halal indices, structured to track the market rather than beat it. Halal Alpha is built differently on every dimension that matters.
Screen threshold
Most halal funds
Up to 5% non-compliant revenue (AAOIFI standard)
Halal Alpha
2.5% non-compliant revenue
Portfolio construction
Most halal funds
Broadly diversified across hundreds of holdings
Halal Alpha
Concentrated, typically 5 to 15 positions depending on size of account
Management style
Most halal funds
Passive replication or rules-based screening
Halal Alpha
Active fundamental research, conviction-weighted
Benchmark
Most halal funds
Halal index (Dow Jones Islamic, S&P Shariah)
Halal Alpha
S&P 500
Structure
Most halal funds
Pooled fund (mutual fund or ETF)
Halal Alpha
Separately managed account in your name
Fee model
Most halal funds
Flat expense ratio regardless of performance
Halal Alpha
0% management with 20% above a 5% hurdle (qualified clients), or 2% on the first $250,000 and 1.5% above $250,000
| Most halal funds | Halal Alpha | |
|---|---|---|
| Screen threshold | Up to 5% non-compliant revenue (AAOIFI standard) | 2.5% non-compliant revenue |
| Portfolio construction | Broadly diversified across hundreds of holdings | Concentrated, typically 5 to 15 positions depending on size of account |
| Management style | Passive replication or rules-based screening | Active fundamental research, conviction-weighted |
| Benchmark | Halal index (Dow Jones Islamic, S&P Shariah) | S&P 500 |
| Structure | Pooled fund (mutual fund or ETF) | Separately managed account in your name |
| Fee model | Flat expense ratio regardless of performance | 0% management with 20% above a 5% hurdle (qualified clients), or 2% on the first $250,000 and 1.5% above $250,000 |
The trade-off is intentional. Concentration means higher variance. Active management means we have to be right, not just present. We accept both because the alternative is to tell Muslim investors that their only option is to track an index, pay a fee, and accept whatever the market delivers.
What This Strategy Asks of You
Concentrated active management is not a free lunch. A portfolio of 5 to 15 positions will not behave like the S&P 500. There will be quarters where we lag the index and stretches where we lag it badly. Drawdowns of 20% or more are normal for concentrated equity strategies, not a sign that something has gone wrong.
We tell you this up front because we want clients who can hold through the variance. Investors who panic at a 15% drawdown and exit at the bottom destroy their own returns regardless of how the strategy performs. The math of compounding only works if you stay invested, and staying invested through drawdowns is harder than it sounds.
If your mental model of investing is steady gains with low volatility, this is not the strategy for you, and we will tell you so on the consultation call. If you can hold conviction positions through periods where the market moves against you, the long-term math is on your side.
Stricter Than the Standard
Most halal indices and funds screen at a 5% threshold for non-compliant revenue, the level permitted under AAOIFI guidelines. We screen at 2.5%. In practice, that means a company we hold cannot derive more than 2.5% of its revenue from activities Shariah scholars classify as impermissible. We apply the same conservatism on financial ratios, including interest income and interest expense. We also look beyond the numbers, screening for qualitative factors such as ties to oppressive regimes.
We screen every position constantly. If a holding's compliance profile changes during the holding period, we exit. There are no exceptions, no grandfathering, and no "halal enough" allowances. We would rather sell a profitable position than carry a non-compliant one.
This approach keeps us disciplined, and we treat that as a feature. A smaller, cleaner universe of potential investments forces concentration, and concentration is where active management earns its return.
Fee Structure
Traditional hedge funds charge "2 and 20" — a 2% annual management fee plus 20% of all profits. We bring the same institutional strategies with full Shariah compliance, but charge zero management fees and take 20% only on profits above 5%.
Traditional Hedge Fund
2% Management + 20% of Profits
If there is no net gain, you still pay the management fee.
Halal Alpha
0% Management + 20% Above 5% Hurdle
If returns are below the hurdle or there is no net gain, you pay nothing.
Example is illustrative of typical hedge fund fee structures and is not representative of Halal Alpha's actual fees. See the Flat Fee Plan and Fee Structure sections above for our current fee schedule.
Testimonials
“I am glad to share my experience with Br. Rakaan and his team. I’ve been following Br. Rakaan on YouTube since he first started his channel. From the very beginning, I found his content incredibly educational, especially in explaining halal-based investing in a clear and detailed way. In about a year ago, I finally decided to start investing myself — and I couldn't have found a better place to begin than the PIF community. Alhamdulillah, it’s been a great experience. The stock picks shared by Br. Rakaan have been excellent, and his analysis is always grounded in strong fundamentals and logic. This was a major first step for me — after spending so long learning about investments, I finally took action, and I’m so glad I did. Later, I asked the group for recommendations on halal wealth management for a larger investment journey that is Sharia-compliant. To my surprise, Br. Rakaan himself reached out and offered me a spot in his halal investment company “Halal Alpha”. That was about three months ago, and Alhamdulillah, the experience has been very positive and I have seen double digit growth.. I feel Alhamduliah much comfortable to say that I made a good decision to start my investment journey with Br. Rakaan and Halal Alpha that provides Sharia-compliant solution without compromising growth.”
Ahmed E.
“It’s great to see the portfolio performing well and on track to reach our targets InshaAllah. I’m pleased with the performance and excited for the coming quarters inshaAllah. JAK”
Abdul Elamarti
How It Works
Custody
Your money stays with you. You open an account in your own name at Charles Schwab or Interactive Brokers. Both custodians serve U.S. and international clients, and both support taxable accounts, IRAs, Roth IRAs, SEP IRAs, and rollover 401(k)s. We never take possession of your funds and cannot withdraw or transfer money from your account at any time. We are granted trading authority only, which means we can execute buys and sells on your behalf and nothing else.
Liquidity
Your capital remains liquid throughout the engagement. There is no lockup, no redemption window, no minimum tenure. You can log in to your custodian account any day and see every position. You can revoke our trading authority at any time, end the relationship, and move on. There are no cancellation fees.
Fees
Fees are calculated and charged quarterly, in arrears. On the management fee track, the rate is 2% annually on the first $250,000 and 1.5% annually on assets above $250,000. The fee is prorated and deducted directly from your account. For the qualified client track, the performance fee applies only when your portfolio has gained more than 5% in the period and only above the prior high watermark. Every fee is broken out on your quarterly statement.
Customization
The strategy is concentrated by design, but the portfolio is yours. If a specific holding does not work for you — an industry you would rather avoid, a position size that makes you uncomfortable, or a tax constraint that requires us to harvest losses on a particular schedule — we accommodate it. The core thesis stays the same. The implementation flexes with you.