Frequently Asked Questions
What is Wahed Invest?
Wahed Invest (“Wahed”) is a registered investment advisor that aims to provide an efficient and ethical investment platform. Our digital investment platform, sometimes also called Wahed or Wahed Invest, allows investors from all income brackets to invest their savings ethically and efficiently. Wahed’s corporate and regulatory information can be found in the legal section of our website.
Why wouldn't I buy the securities suggested by Wahed Directly?
While you may be able to buy the securities suggested by Wahed directly through your broker, you may not be able to get them all at the same time or in a cost-effective and efficient manner. In addition, some brokers may require a high minimum investment to open an account. Wahed also monitors and periodically rebalances your portfolio for no additional cost.
More importantly, you may not be able to open an account in the same seamless manner as you do with Wahed. With Wahed’s proprietary technology, you can open an account online in minutes and get access to global markets.
What is the minimum investment required to become a client of Wahed Invest?
A minimum investment of $100 is required for you to activate your account and start investing with Wahed.
What are the basic requirements to be eligible for opening an account with Wahed Invest?
Clients need to be able to provide a valid address and be at least 18 years of age. You also need a bank account to be able transfer funds in and out of your Wahed account.
If you're signing up from Malaysia, the US or UK, please visit their relevant websites by changing the region from our website's footer.
In addition, we currently onboard residents from the countries below (though this list is subject to periodic or even sudden changes due to external circumstances) :
- American Samoa
- Antigua and Barbuda
- Bonaire, Sint Eustatius and Saba
- Bosnia and Herzegovina
- Bouvet Island
- British Indian Ocean Territory
- Brunei Darussalam
- Burkina Faso
- Cape Verde
- Cayman Islands
- Christmas Island
- Cocos (Keeling) Islands
- Cook Islands
- Costa Rica
- Dominican Republic
- El Salvador
- Equatorial Guinea
- Falkland Islands (Malvinas)
- French Guiana
- French Polynesia
- French Southern Territories
- Heard Island and McDonald Islands
- Hong Kong
- South Korea
- Lao People’s Democratic Republic
- Marshall Islands
- New Caledonia
- New Zealand
- Norfolk Island
- Northern Mariana Islands
- Papua New Guinea
- Puerto Rico
- Russian Federation
- Saint Barthélemy
- Saint Helena, Ascension and Tristan da Cunha
- Saint Kitts and Nevis
- Saint Lucia
- Saint Martin (French part)
- Saint Pierre and Miquelon
- Saint Vincent and the Grenadines
- Sao Tome and Principe
- Saudi Arabia
- Sint Maarten (Dutch part)
- Solomon Islands
- South Africa
- South Georgia and the South Sandwich Islands
- Sri Lanka
- Trinidad and Tobago
- Turks and Caicos Islands
- United Arab Emirates
- United States Minor Outlying Islands
- British Virgin Islands
- U.S. Virgin Islands
- Wallis and Futuna
- Western Sahara
Does Wahed offer accounts for minors?
No, you need to be 18 at least years of age to open an account with Wahed.
Is my personal information safe with Wahed Invest?
For any query or clarification regarding our services, you can reach us at firstname.lastname@example.org. We would be more than happy to assist you.
How it works
What does Wahed do?
We help you invest your money in globally diversified portfolios. Wahed provides portfolio management services to its clients through the use of our advanced digital platform, which employs financial algorithms derived from Modern Portfolio Theory to create optimal portfolios that are tailored to the needs of our investors. By opting to use our services, you will be entering into an agreement that grants us the authority to invest and manage your funds.
How do I open an account with Wahed?
Opening an account is simple.
- To open an account with Wahed, complete a risk assessment questionnaire
- We will recommend an optimal portfolio based on the answers you have provided us
- If you are happy with this portfolio allocation, you will then proceed to complete the required registration forms
- Transfer funds into your Wahed account and we’ll invest them according to your chosen portfolio
How will my portfolio be optimized?
Our platform evaluates an investor's risk profile by asking them a few basic questions about their investment goals, liquidity needs, time horizon, as well as other other assessment topics. Based on this information, we recommend a portfolio with an optimized combination of securities that may provide the highest potential return subject to the investor’s risk appetite. We use Modern Portfolio Theory to optimize and manage your portfolio at a fraction of the cost of most conventional wealth managers.
Why do you invest in ETFs?
Our main objective is to provide a low-cost investment advisory service for any size of portfolio. We allocate a portion of funds into ETFs as they help reduce unnecessary overhead costs while providing efficient diversification benefits. Investing in individual assets involves multiple transactions, which can lead to higher costs.
What is the frequency of rebalancing?
We will rebalance your portfolio whenever:
- There is a change in your risk profile, which can have a significant impact on your investment goals.
- Whenever funds are added or withdrawn, we rebalance your portfolio to reflect this change.
- When there is a major change in market volatility
What are the charges or fees for your services?
We charge a single wrap fee for our service, which is inclusive of management, custodian, and transaction fees.
This fee is a percentage of your account size and will either be 0.49% per year for accounts above $250,000 and 0.99% per year for accounts below this amount. You can refer to our pricing page for more information.
This fee does not include any charges on wire transfers or other fees that may be charged by the custodian or your bank.
The ETF sponsors or mutual funds also usually charge expense ratios, which are not included in the wrap fee. These are extra fees you will pay indirectly (i.e., they are part of the cost of buying these ETF or mutual funds in the portofolio). We always review these fees when we implement our initial rebalancing and we might at times strategically hold certain securities where the trading fees are high relative to the actual value of the position. For more information about our fee structure, please refer to our Client Agreement.
How will I be updated on my portfolio’s performance?
You will be able to monitor your performance daily through the platform. You can also download your monthly statements from your app which will have a summary of your portfolio holdings and performance.
What if I want to surrender my account?
What is Shari'a-compliant investing?
Shari'a-compliant investing is the practice of trading in investments that are reviewed for permissibility according to Islamic financial ethics, laws and industry practices. Generally, this will mean screening out investments in certain conventional business sectors, as well as reviewing such remaining candidates to ensure they meet established asset to debt ratios. For more information on how our team ensures investments are review for Shari'ah-compliant click here.
What is the methodology for choosing Shariah-compliant investments?
Wahed screens potential portfolio investment based upon a strict set of constraints in accordance with best-practice Shariah-compliance standards, reviewed by our Shariah supervisory board (SSB). In summary, any portfolio cannot hold investment of any company or fund that:
- Provides conventional financial services and any other related interest-bearing services.
- Manufactures/sells products or services not approved by our SSB (i.e. liquor, tobacco, gambling, adult entertainment, weaponry, etc).
- Does not have a certain percentage of real or physical assets.
- Does not meet certain debt ratios.
Who certifies and ensures that investments are ethical?
In order to display our commitment to best practices in the field of Shariah compliance, we have designated Shariyah Review Bureau, a leading Shari'ah financial advisory firm, as our Shariah advisor. Our Shariah advisor provide the external, independent experts who sit on our SSB and advise Wahed on matters of Shariah-compliance and Islamic financial ethics.
You can see the certificate here.
Investments and Portfolios
Will I receive dividends?
Some of the funds and investments in your portfolios do pay out dividends, however, the frequency of such disbursement will depend on each fund's policies.
The dividends received on your investments will be automatically reinvested into your Wahed account.
Can my investment lose value?
The securities you own are subject to market risk. Fluctuations in market conditions are common, and when markets are down you may bear some loss. To make sure your portfolios are permitted under Islamic financial ethics, we cannot guarantee returns.
What returns can I expect?
Your expected return depends on your risk profile, asset allocation and the related market performance of those portfolio assets. Users with a conservative profile are expected to earn less and be exposed to less risk than users with an aggressive profile, who will be exposed to more risk in exchange for possibility of higher returns.
You can view our portfolios' historical performance on our Investing page.
Please note that historical returns are not an indication or guarantee of future results. Any portfolio investments may gain as well as lose value.
Where can I see the portfolio that my money is invested into?
To view your portfolio holdings, users can login to the Wahed app and under their Portfolio page, the Positions tab will show the current state of their investments.
All Wahed clients are invested into a globally diversified portfolio of securities. These securities are screened for Shariah-compliance.
Will my Wahed portfolio beat the market?
Wahed's portfolio is designed to minimize risk and maximize return. There is no certainty in performance and your annual return will depend on multiple factors including your risk profile and market conditions. More aggressive profiles are expected to earn higher returns on the Wahed platform, but may also experience greater losses depending upon market conditions and the performance of related investments.
Are there fees for deposits or withdrawals?
Wahed’s Wrap Fee is inclusive of all management fees, custodian fees, and transaction fees. Your bank may charge you for any wiring or withdrawal fees.
Can I close my account at any time?
Yes, you can request to close your Wahed account at any time. There are no account closure charges.
Is there a fee for a $0 balance?
No, you will never be charged for an account with a $0 balance.
Will market changes take me down a fee tier?
You will never be put in a more expensive fee tier due to market changes. You can, however, get placed into a less expensive fee tier due to upward market changes.
Where are the fees taken from?
Fees are taken from your Wahed account. No action is required on your part.
When does Wahed Invest charge fees?
Fees are charged monthly. You will never be charged for having an open account with a $0 balance. Kindly refer to the Pricing tab to know more.
Deposits and Withdrawals
How can I add funds to my account?
Please login to your Wahed account > Click on Funding > Add Funds > Fill the amount you wish to deposit.
You will then be able to see all of the receiving bank's details that you'll need.
After receiving the required information, you’ll need to transfer the funds through your bank by sending a wire transfer from your bank account.
How can I withdraw funds?
To withdraw funds, you must login to your Wahed account and simply follow the instructions.
This a step-by-step guide:
Click on Funding > Withdraw Funds > Fill the amount you wish to withdraw (minimum is $100) > Enter your bank details > Confirm the transaction.
Which method is available for withdrawals?
You can only withdraw funds through wire transfers. To request another method kindly email us at email@example.com.
Do I get charged for deposits?
Your bank may charge you for wire transfers, this fee does not go to Wahed.
Is there any charge for withdrawals?
Our custodian may charge you for withdrawals, these fees do not go to Wahed.
How long does it take to fund my account?
It usually takes 2 to 4 business days.
The funds will first reflect as cash in your account, before being invested the next business day.
Is there a hold period for withdrawals?
No, there is no lockup period. You can request to withdraw all your funds at any time.
However, the withdrawal process may be between 7 to 8 working days depending on the date of your withdrawal and bank. This is mainly due to a period for clearing and settlement of trades once your withdrawal request has been processed.
How long does it take to withdraw my funds?
The timing of a withdrawal depends on several factors, including what time of day a withdrawal request is made, and the institution receiving your funds.
Withdrawals can take up to 8 business days before the requested funds are in your bank account. This is mainly due to the time it takes for trades to be cleared and settled.
Can I transfer funds from an account under a different name?
No, you may only transfer funds from an account that bears your name. Transferring funds from an account under a different name will cause the funds to be rejected.
Can I withdraw funds to a third party?
No, you may only withdraw funds to an account that bears your name.
What happens if I invest less than the minimum amount?
If you invest less than the minimum amount of $100, the account status will be “Active (Insufficient Funds).” There will be no trades or securities allocated until you fund at least $100 into your Wahed account.
What happens if my account value falls below $100?
If the Portfolio Value falls below $100 due to market changes, then the account status will remain Active. However if the Portfolio Value falls below $100 due to withdrawals from the account, the account status will be changed to Insufficient Funds and you will need to fund your account.
In which currency can I deposit funds?
We only accept funds in US Dollars.
There is an issue with my account. What should I do?
In case of any queries or concerns regarding your account, you may reach us on Live Chat, or via email at firstname.lastname@example.org. We will get back to you at our earliest.
Can I fund my account through a positions transfer?
No, we only accept funds in US Dollars as cash deposits.
Can I fund my account with physical stock certificates?
No, we only accept funds in US Dollars as cash deposits.
Wahed App and Accounts
Understanding your percentage returns
- Understanding your percentage of return
Although there are multiple ways to calculate returns for any investment, in order to account for time and deposits, most investors ultimately simply want to see how much money they currently have versus how much they started with.
The approach that we use to calculate such return percentages is the Time Weighted Return (TWR) approach. You should think of TWR as the return your portfolio generated assuming all your deposits were made on the first day your account was opened. This calculation method eliminates the effects of your deposits and withdrawals, and instead looks at the portfolio performance itself, with each day weighted equally regardless of whether the account has $100 or $1,000,000.
This is not the same as dividing the total gains or losses by the initial portfolio value, which is the simple percentage return. Check out the bottom of this article to see why the simple percentage approach may be misleading, particularly when taking deposits and withdrawals into consideration
Now that you understand what this number is, it’s important to note how your deposits and withdrawals affect the relationship between your total earnings and your TWR.
- How your earnings may be positive but your TWR could be negative
Because you might have deposits and withdrawals on different dates, showing you a simple percentage return might not be sufficient. The example below will explain:
Let’s say Sarah made a $2,000 deposit, and her portfolio dropped by 50% so she’s left with $1,000. Then, Sarah makes a $30,000 deposit so her portfolio balance goes to $31,000. Soon after, the market rallies and her portfolio grows by 10% to become $34,100 ($31,000 + $3,100).
Overall, Sarah has $2,100 in gains for her portfolio (she lost -$1,000 then made +$3,100).
However, if you consider the actual percentage returns for each period, the portfolio was down 50%, then gained 10%. Using simple compounding according to the TWR method, her portfolio has a TWR of (((1-50%) x (1+10%))-1) = -45%. Note that because of the timing of her deposits, she has positive gains but negative TWR.
- Negative earnings but positive TWR
The same dichotomy can be seen if the scenario was reversed.
First, Sarah’s $2,000 deposit grew by 50% to $3,000, then she deposited $30,000. Her new balance is now $33,000 ($2,000 + $1,000 + $30,000)
Her portfolio then lost -10% ($3,300) so she now has $29,700.
Overall, she lost -$2,300 (made $1,000 then lost $3,300).
However, her portfolio actually performed well from a daily return perspective, growing by 50%, and then dropping by 10%.
This is why we use the TWR method; it captures the real performance of your portfolio, weighting each period equally regardless of market value, eliminating the effects of deposits and withdrawals.
- Why we don’t use the simple percentage return, and how it can be misleading
The simple percentage return is calculated by dividing your earnings by your net deposits.
So for example, if your net deposits are $5,000 and you earned $1,000 your percentage earnings will be:
$1,000 / $5,000 = 20%
Now let’s say you decide to go on a trip, so you withdraw $3,000, and your balance becomes $2,000.
The simple percentage return would now be:
$1,000 / $2,000 = 50%
You can see why this number can be quite misleading, because technically this hypothetical portfolio did not ‘grow’ by 50%.
When creating a password during sign up, please ensure that the following conditions
- Length is at least 8 characters
- Must contain both an uppercase and lowercase letter ('A' and 'a' or 'B' and 'b')
- Must contain a number (any number from 0 to 9)
- Must contain a special character such as !,@,#,$,%,^,&,*
Is there a minimum balance?
Yes, the minimum balance is $100. We permit such a low balance in order to make our service accessible to everyone.
Can I have a personal consultation?
All customers have access to our customer support team that will happily answer any questions regarding your account. However, we cannot alter anything with you over the telephone or in-person regarding your investments or your recommended allocation – this can only be done through the Wahed App. Futhermore, we cannot provide any financial advice or planning through our customer support team.
How are gains or losses calculated?
We calculate partial sales using the First In First Out method (FIFO method). This is the default accounting method in the US. It presumes that you’re selling the oldest shares first.
You buy 100 shares of a stock for $50 each, and a year later buy 100 more at $60 each. By the next year, when the stock is trading at $80 each, you sell 50 shares. In this example, as per the FIFO method, it would mean selling your $50 shares first, resulting in a capital gain of $30 per share, or $1,500 in total.
Your gains or losses will be reflected daily in your account.
I just changed jobs. Should I update my employment information?
Yes. As your financial situation changes, it is important to keep us informed so we can determine whether to update our investment recommendations for you. Keeping your information up-to-date (e.g. address, name change, employment information) ensures we are providing the most relevant and personalized financial recommendations for your current financial situation.
I just moved. Should I update my address?
Yes, it is important to keep your information up-to-date. Keeping your information up-to-date (e.g. address, name change, employment information) ensures we are providing the most relevant and personalized financial recommendations for your current financial situation.
Does Wahed Invest offer any tax planning?
We do not currently offer any tax planning advice or services.
Can I hold my account at another brokerage firm and still have Wahed Invest trade it?
Wahed Invest services are only available to accounts opened through Wahed. In order to provide our services, Wahed Invest must have the ability to electronically place trades for all of its accounts.
Where can I see my transactions?
You can see every transaction that has taken place on your account by logging into the Wahed app. We track the flow of every dollar for every Wahed account.
Can I open multiple accounts?
Yes, you can open multiple accounts all from one dashboard.
Once your first account is active and funded, you'll see a button on the dashboard that allows you to add new accounts under that same email.
How do I change my portfolio?
If you wish to change your portfolio, here's how you can do it:
- Login to the app and go the main menu
- Go to your Account Details screen
- Under 'My investment account' tap on your account type
- Tap on 'Change my portfolio' at the bottom of the screen
This will allow you to retake the questionnaire or simply browse through our portfolios and/or change your allocation
If your account is active and funded, your positions will be adjusted within the next 1 to 3 business days.
If you haven't funded your account yet, the new portfolio will be updated immediately.
You can only change your portfolio once every three months.