Shariah Stock Screening Methodologies: A Comparative Technical Overview (Educational Research)

Scope and Limitations (Compliance-Forward)

• →Purpose: educational research and technical comparison of screening methodologies and related data/audit considerations.
• →Not investment advice / not a solicitation: nothing in this document constitutes investment advice, portfolio management, a recommendation, or an inducement to transact in any financial instrument.
• →Not a Shariah ruling / not a fatwa: this document does not issue religious rulings on any issuer, security, or portfolio. Screening outcomes vary by methodology, definitions, and scholarly interpretation.
• →Methodology variability: standards differ (AAOIFI, DJIM, FTSE, MSCI, S&P), and implementations can vary across boards and vendors.
• →Data limitations / no warranty: data may be incomplete, estimated, or subject to restatement; no warranty is provided as to accuracy, completeness, or timeliness.
• →Professional input: investment and religious decisions involve facts and judgment outside the scope of this document; qualified professionals may be consulted as appropriate.

Key Takeaways

1. →Market sizing is definition-dependent — end‑2024 global Islamic finance assets are commonly reported in the USD 5.9–6.0T range, with published third‑party projections to higher totals by 2029.
2. →Methodology plurality is structural — AAOIFI, DJIM, FTSE, MSCI, and S&P use different denominators, averaging windows, and impurity definitions, which can produce different indicative outcomes from the same fact pattern.
3. →Geographic concentration is material — published estimates place roughly 72% of global Islamic finance assets in three markets (Iran, Saudi Arabia, Malaysia), with a smaller but growing European footprint.
4. →Auditability is a recurring operational theme — institutional workflows often require time-stamped methodology versions, data provenance, and documented interpretations for edge cases.

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