Is SMT.L (Scottish Mortgage Investment Trust PLC) Halal or Haram?

Based on our AAOIFI-standard shariah screening, SMT.L is Not Halal (Haram) and is not considered permissible for Muslim investors. It failed 1 of 4 compliance screens. Scottish Mortgage Investment Trust PLC's core business activity was found to be non-compliant.

Scottish Mortgage Investment Trust PLC is a FTSE 100 giant managed by Baillie Gifford, known for its high-conviction global portfolio focusing on disruptive growth companies. Unlike a traditional bank, it operates as a closed-ended equity fund that invests heavily in technology, healthcare, and consumer sectors, holding significant stakes in companies like NVIDIA, Moderna, and Tesla. Its strategy centers on identifying businesses with exceptional growth potential and holding them for long periods, rather than trading frequently based on short-term market movements. For Muslim investors, SMT.L presents a compliance challenge and is currently classified as Not Hal al (Haram). Although the trust passes the financial health checks regarding debt and cash levels, it fails the crucial Business Activity screen. As a conventional investment fund, it does not mandate Shariah screening for its own portfolio, meaning it freely invests in non-compliant sectors or companies with high debt, making the trust itself impermissible to hold under strict AAOIFI guidelines . Financially, the trust demonstrates a balance sheet that would otherwise be attractive to Islamic investors, with interest -bearing debt sitting comfortably at 12.1% of its market capitalization. Furthermore, its direct interest income is negligible at just 0.35% of revenue, showing that its primary earnings come from capital appreciation and dividends rather than us ury. However, these strong financial ratios cannot override the fundamental issue that the core business model involves unconstrained investing. Investors looking for exposure to similar high-growth global equities should instead consider building a direct portfolio of the Shariah-compliant stocks that SMT holds, or seeking out dedicated Islamic mutual funds. Relying on a conventional fund structure like SMT means you inadvertently profit from non-compliant underlying assets, which remains a barrier for strict adherence to Islamic finance principles. Scottish Mortgage Investment Trust PLC operates in the Financial Services sector under the Asset Management industry and is headquartered in Edinburgh, GB. and employs approximately 0 people.

SMT.L was screened using AAOIFI-based shariah compliance criteria. Four tests are applied: (1) Business Activity — the company's core business must not derive primary income from haram (prohibited) activities such as alcohol, gambling, tobacco, or interest-based finance. (2) Debt-to-Market-Cap — total debt must not exceed 33% of market capitalization. (3) Interest Income — interest income must not exceed 5% of total revenue. (4) Cash & Securities — cash and interest-bearing securities must not exceed 33% of market cap. SMT.L passed 3 of these 4 screens.

SMT.L was last screened on 2026-02-24. Shariah compliance status can change as companies report new financial data, acquire new businesses, or shift revenue streams. We recommend checking back periodically for the most up-to-date screening results.