Understanding the Difference: Halal Superannuation vs Regular Super

For many people, choosing a superannuation fund isn't just about performance. It’s also about aligning with their personal and religious values. That’s why some providers now offer not only conventional super options but also Shariah-compliant alternatives. This brings us to an important question: what’s the difference between halal superannuation vs regular super? 

Halal Superannuation vs Regular Super

Choosing a superannuation fund is an important decision, as it can have a significant impact on your retirement savings. That’s why it’s essential to carefully assess any product you’re considering. Take the time to understand how the fund operates, where it invests, the fees involved, and its past performance. 

Regular Superannuation 

Regular superannuation is the most common type of retirement savings in Australia. These funds are typically structured as either profit-to-member or retail funds, aiming to deliver strong long-term returns based on the level of risk you're comfortable with. 

They generally follow a diversified investment approach to balance risk and return over time. This often includes exposure to asset classes such as shares, property, fixed interest, and cash. With these features, regular super offers greater flexibility and a wider range of investment options for its members. 

Halal Superannuation 

Halal superannuation is a retirement fund that complies with Islamic principles. It is designed for Australians who want to grow their retirement savings without compromising their values or religious beliefs. 

Unlike regular super funds, halal super avoids investments that are considered haram (prohibited) under Shariah law. This includes businesses involved in alcohol, gambling, interest-based finance, pork, weapons, wars, and other unethical industries. Instead, halal super funds invest in Shariah-compliant assets that are carefully screened and monitored by a certified Shariah advisory board. 

Halal super also avoids earning or paying interest (Riba), which is strictly prohibited in Islam. It focuses on Shariah-compliant equity investments and other halal opportunities that aim to deliver long-term growth. 

Key Differences Between Halal Superannuation vs Regular Super 

While both halal and regular superannuation aims to help Australians grow their retirement savings, the way they operate can be quite different—especially when it comes to investment principles and Shariah considerations. Here are some of the key differences: 

Purpose

• Regular Super: Primarily focused on financial growth and performance.
• Halal Super: Balances financial growth with ethical and religious obligations.

Interest (Riba)

• Regular Super: Earn or pay interest through certain investments.
• Halal Super: Strictly avoids all forms of interest.

Investment Approach

• Regular Super: Invests across various industries and financial products.
• Halal Super: Only invests in Shariah-compliant assets.

Investment Screening

• Regular Super: May include options for ethical or sustainable investing.
• Halal Super: Investments are screened according to Islamic ethics and Shariah law.

Sectors Excluded

• Regular Super: There are few exclusions unless you opt for an ethical fund.
• Halal Super: Excludes alcohol, gambling, pork, conventional banking, weapons, wars and similar industries.

Choosing Superannuation That Aligns with You

Comparing halal superannuation vs regular super can help you make an informed choice about which option suits your values and financial goals. And if you're looking for a halal super fund, Hejaz offers a Shariah-compliant solution for you. 

Hejaz Islamic Superannuation is designed to help Muslims grow their retirement savings without compromising their faith. Our products are carefully reviewed by qualified Shariah scholars and follow the standards set by AAOIFI (Accounting and Auditing Organisation for Islamic Financial Institutions), ensuring full alignment with Islamic finance principles. 

We avoid all investments that generate returns through interest-based financial institutions, such as banks or bonds. We also ensure your super is not invested in industries considered haram, including alcohol, gambling, pork-related products, adult entertainment, weapons, or any business that engages in unethical practices. 

Understanding the key differences between halal superannuation vs regular super empowers you to make the right choice. At the end of the day, it’s important to choose a super fund that reflects what matters most to you. 

Disclaimer:
This publication is prepared by Hejaz Asset Management Pty Ltd ABN 69 613 618 821, AFSL 550009, as the Fund Manager and the Promoter for the Hejaz Islamic Super and Pension products. The information contained in this publication is for general information purposes only. It is prepared without taking into account your objectives, financial situation, or needs. It is not an offer or recommendation to make any investment or adopt any investment strategy. Consider the PDS and TMD on our website before deciding whether the product suits you.