DJIM vs AAOIFI — Halal Screening Methodology
portfolIQ provides factual financial inputs. Ratio computation and halal verdicts are performed client-side. This page documents the DJIM and AAOIFI SS21 screening formulas and the raw fields PIQ exposes.
DJIM vs AAOIFI — Halal Screening Methodology
Disclaimer: portfolIQ does not provide halal or haram verdicts. It does not issue fatwas or Sharia compliance certificates. It provides raw, factual financial data. Interpretation against any Sharia standard (DJIM, AAOIFI SS21, Sharia Capital, SC Malaysia, etc.) is solely the responsibility of the data consumer and their qualified Shariah scholars.
Not financial advice. Not a fatwa. Methodology disclosed. Consult a qualified Islamic finance scholar for religious rulings.
PIQ's role: inputs only
portfolIQ (PIQ) is a data provider, not a religious authority.
PIQ provides:
- Raw financial inputs (numerators and denominators)
- Asset classifications (replication method, instrument type, dividend history)
- Factual market data with source attribution
PIQ does not provide:
- Halal or haram verdicts
- Fatwa equivalents or Sharia opinions
- Compliance certificates or screening scores
- Purification ratio calculations
This boundary is intentional. Different Sharia standards use different denominators, thresholds, and revenue exclusion lists. A verdict baked into PIQ's API would be misleading the moment a client applies a different standard. See Why this architecture.
Standard comparison: DJIM vs AAOIFI SS21
| Criterion | DJIM (S&P Dow Jones Islamic Market) | AAOIFI SS21 |
|---|---|---|
| Debt screen denominator | 24-month average market capitalisation | Total assets (book value) |
| Debt threshold | < 33% | < 33% |
| Cash & interest-bearing securities | < 33% of avg 24m market cap | < 33% of total assets |
| Accounts receivable | < 49% of avg 24m market cap | < 70% of total assets |
| Revenue purity | Non-permissible revenue < 5% of total revenue | Non-permissible revenue < 5% of total revenue |
| Revenue purification | Required — proportional to non-permissible income | Required — proportional |
| Primary adopters | S&P DJIM Index series, HalalStack | AAOIFI-member institutions, GCC markets |
The key structural difference: DJIM uses market cap as denominator (market-value based), while AAOIFI SS21 uses total assets (book-value based). A highly valued growth stock may pass DJIM but fail AAOIFI, or vice versa, using the same underlying financial data.
DJIM screen formulas
The DJIM methodology defines three financial screens. PIQ exposes the raw inputs for each.
Screen 1 — Total debt
Formula: totalInterestBearingDebt / marketCapAvg24m < 33%
| Input | EDGAR XBRL Concept | PIQ field (/v1/stocks/{ticker}/fundamentals) |
|---|---|---|
totalInterestBearingDebt | us-gaap:LongTermDebt + us-gaap:ShortTermBorrowings | totalInterestBearingDebt |
marketCapAvg24m | shares_outstanding × price_avg — 24-month rolling average | marketCapAvg24m |
marketCapAvg24m is computed from sat_stock_market_cap_history (monthly snapshots, migration 067). If fewer than 3 monthly snapshots are available, meta.data_quality returns "partial".
Screen 2 — Cash and interest-bearing securities
Formula: (cashAndCashEquivalents + interestBearingSecurities) / marketCapAvg24m < 33%
| Input | EDGAR XBRL Concept | PIQ field |
|---|---|---|
cashAndCashEquivalents | us-gaap:CashAndCashEquivalentsAtCarryingValue | cashAndCashEquivalents |
interestBearingSecurities | us-gaap:ShortTermInvestments (proxy) | interestBearingSecurities |
marketCapAvg24m | See Screen 1 | marketCapAvg24m |
Screen 3 — Accounts receivable
Formula: accountsReceivableNet / marketCapAvg24m < 49%
| Input | EDGAR XBRL Concept | PIQ field |
|---|---|---|
accountsReceivableNet | us-gaap:AccountsReceivableNetCurrent | accountsReceivableNet |
marketCapAvg24m | See Screen 1 | marketCapAvg24m |
Revenue purity — DJIM
Formula: nonPermissibleRevenue / totalRevenue < 5%
| Input | PIQ field | v1.5.0 status |
|---|---|---|
nonPermissibleRevenue | nonPermissibleRevenue | null — EDGAR XBRL has no standardised concept for this field. Granular segment analysis from 10-K is Phase 2 (Sprint 33+). |
totalRevenue | totalRevenue | Available |
AAOIFI SS21 screen formulas
AAOIFI uses total assets as the common denominator across all three financial screens.
Screen 1 — Total liabilities (AAOIFI)
Formula: totalInterestBearingDebt / totalAssets < 33%
PIQ field mapping:
| Input | PIQ field | Note |
|---|---|---|
totalInterestBearingDebt | totalInterestBearingDebt | Same numerator as DJIM |
totalAssets | Not in v1.5.0 fundamentals response | EDGAR: us-gaap:Assets — roadmap Sprint 31+ |
PIQ currently exposes the same totalInterestBearingDebt numerator. The AAOIFI denominator (totalAssets) is not yet in the fundamentals endpoint. Clients needing AAOIFI ratios in v1.5.0 should fetch totalAssets from the raw EDGAR XBRL filing directly.
Revenue purity — AAOIFI
Same 5% threshold as DJIM. nonPermissibleRevenue is null in v1.5.0 for both standards (same limitation applies).
ETF lookthrough and synthetic swap
For ETF halal screening, replication method is the primary structural fact:
replication_method | Shariah implication | PIQ handling |
|---|---|---|
physical_full | All holdings traceable — lookthrough applicable | GET /v1/etf/{ticker}/holdings returns full constituent list |
physical_optimized | Sampling — most holdings traceable | GET /v1/etf/{ticker}/holdings returns sampled holdings with as_of_date |
synthetic_swap | Non-shariah-compliant per AAOIFI SS61 (swap contract = interest-based derivative) | meta.synthetic_swap_warning present in holdings response. AI endpoint flags automatically without LLM call. |
synthetic_funded | Collateral structure — scholar-specific ruling | Exposed as fact; ruling is consumer-side |
PIQ exposes replication_method as a factual field from the ETF's published prospectus (EDGAR N-PORT + KIDs PRIIPs). Whether physical_optimized is acceptable or whether securities_lending is permissible is a scholarly question — not a data question. PIQ does not answer it.
Sharia Capital and custom standards
Beyond DJIM and AAOIFI, several alternative standards exist:
| Standard | Primary adopter | Key difference |
|---|---|---|
| Wahed / Saturna | US-based Islamic robo-advisors | 33% debt / avg market cap (similar to DJIM) |
| SC Malaysia (SAC) | Bursa Malaysia halal index | Sector-based primary screen + financial ratios secondary |
| IDX ISSI (OJK Indonesia) | Jakarta Islamic Index | OJK-regulated biannual review |
PIQ exposes the same raw inputs for all of these standards. The threshold applied and the screening logic remain on the consumer side. PIQ's architecture explicitly supports multiple simultaneous standards (see Why this architecture).
Why this architecture
-
Standards genuinely diverge. DJIM and AAOIFI use different denominators for the same ratio. A single baked-in verdict would be inaccurate for any client using the other standard.
-
Liability belongs to scholars. Religious rulings carry personal and communal responsibility. That accountability belongs to qualified Shariah scholars and the Muslim investor — not to a data API.
-
Flexibility for multi-standard products. A single PIQ API response can power a DJIM screen for one user, an AAOIFI screen for another, and a custom institutional standard for a third — with zero additional API calls.
-
Legal compliance (AMF §5.3). Providing screening verdicts would approach regulated investment advice territory. Exposing factual, methodologically documented inputs does not. This boundary is mandated by PIQ's legal framework.
Related pages
- Halal screening inputs — what PIQ provides and what it does not compute
- Stock metadata consensus — EDGAR sourcing, coverage, and refresh cadence
- Multi-tier data sourcing — licensing framework and attribution policy
- Asia stocks coverage — SC Malaysia and OJK Indonesia halal regulatory lists
- API reference — full endpoint schema
Not financial advice. Not a fatwa. Methodology disclosed. portfolIQ is not a registered investment advisor. Consult a qualified Islamic finance scholar for religious rulings applicable to your jurisdiction and madhab.