Halal ETFs
Exchange-Traded Funds (ETFs) that invest exclusively in shariah-compliant stocks. Halal ETFs offer Muslim investors a simple, diversified, and low-cost way to invest in the stock market while adhering to Islamic finance principles. Below are 12 halal ETFs available on the London Stock Exchange and US exchanges.
UK-Listed Halal Equity ETFs (London Stock Exchange)
Available through most UK brokers including Hargreaves Lansdown, Interactive Investor, Trading 212, and Freetrade.
iShares MSCI World Islamic UCITS ETF
BlackRock (iShares)
The largest halal ETF on the London Stock Exchange. Offers global developed-market equity exposure screened using MSCI's Islamic index methodology across the US, Europe, Japan and other developed markets.
iShares MSCI EM Islamic UCITS ETF
BlackRock (iShares)
Provides exposure to emerging market equities that meet shariah compliance standards. Covers stocks across China, India, Brazil, South Korea and other emerging economies.
iShares MSCI USA Islamic UCITS ETF
BlackRock (iShares)
LSE-listed ETF providing UK investors with shariah-compliant exposure to US large and mid-cap equities. Uses MSCI's Islamic screening methodology — a convenient way to access halal US stocks without a US brokerage account.
iShares MSCI Europe Islamic UCITS ETF
BlackRock (iShares)
Provides shariah-compliant exposure to European equities. Covers large and mid-cap stocks across 15 European developed markets including the UK, France, Germany, and Switzerland.
HSBC MSCI World Islamic UCITS ETF
HSBC Asset Management
HSBC's global developed-market halal ETF tracking the MSCI World Islamic Index. An alternative to the iShares ISWD with a slightly lower TER. Listed on the LSE and available through UK brokers.
Halal Gold ETCs (London Stock Exchange)
Physical gold ETCs backed by bullion. Gold is widely considered shariah-compliant as a tangible asset with intrinsic value.
iShares Physical Gold ETC
BlackRock (iShares)
Physical gold ETC backed by gold bullion held in London vaults. Gold is widely considered halal as a tangible asset with intrinsic value. One of the lowest-cost ways to gain gold exposure on the LSE.
WisdomTree Physical Gold
WisdomTree
Physical gold ETC from WisdomTree, backed by allocated gold bullion. A popular alternative to iShares IGLN with strong liquidity and a competitive expense ratio.
US-Listed Halal ETFs & Funds
Listed on NYSE and NASDAQ. May be accessible to UK investors through international brokers like Interactive Brokers or eToro.
SP Funds S&P 500 Sharia Industry Exclusions ETF
SP Funds
Tracks the S&P 500 Shariah Industry Exclusions Index, offering exposure to large-cap US equities that pass AAOIFI shariah screens. The largest halal ETF listed on a US exchange.
Wahed FTSE USA Shariah ETF
Wahed Invest
Provides diversified exposure to US equities screened for shariah compliance using FTSE Russell's Islamic index methodology. Managed by Wahed Invest, one of the leading Islamic fintech platforms.
Wahed Dow Jones Islamic World ETF
Wahed Invest
Tracks the Dow Jones Islamic Market International Titans 100 Index, providing exposure to the largest shariah-compliant companies outside the US. Offers international diversification for Muslim investors.
SP Funds S&P Global REIT Sharia ETF
SP Funds
The only shariah-compliant REIT ETF available. Tracks the S&P Global REIT Shariah Index, providing exposure to global real estate investment trusts that pass shariah screens. Ideal for investors seeking halal property exposure.
Amana Growth Fund
Saturna Capital
One of the oldest and largest halal investment funds in the US. Actively managed mutual fund investing in US growth equities screened for Islamic compliance. Managed by Saturna Capital with a track record dating back to 1994.
What is a Halal ETF?
A halal ETF is an exchange-traded fund that screens its holdings for shariah compliance. This means the fund excludes companies involved in haram (prohibited) activities such as alcohol, gambling, tobacco, pork, weapons, and conventional interest-based finance.
In addition to business activity screening, halal ETFs apply financial ratio filters based on standards set by bodies like AAOIFI or MSCI Islamic Index methodology:
- Debt-to-market-cap must be below 33%
- Interest income must be below 5% of total revenue
- Cash and interest-bearing securities must be below 33% of market cap
Halal ETFs trade on stock exchanges just like regular stocks, making them easy to buy and sell through any brokerage account.
How to Choose a Halal ETF
Screening Methodology
Check whether the ETF uses AAOIFI, MSCI Islamic, FTSE Shariah, or Dow Jones Islamic methodology. Each has slightly different criteria.
Geographic Exposure
Choose based on your desired market exposure — US, global developed, emerging markets, or international ex-US.
Expense Ratio
Lower is better. Halal ETFs range from 0.30% to 0.65% TER. Over time, even small differences compound significantly.
Dividend Purification
Some ETFs publish purification ratios. Factor in the small charitable donation needed to purify non-compliant income.
Frequently Asked Questions
What are halal ETFs?
Halal ETFs are exchange-traded funds that only invest in shariah-compliant stocks. They screen out companies involved in alcohol, gambling, tobacco, conventional finance, pork, and weapons, and also apply financial ratio screens to exclude companies with excessive debt or interest income.
Which halal ETFs are available in the UK?
UK investors can access iShares MSCI World Islamic UCITS ETF (ISWD.L) and iShares MSCI Emerging Markets Islamic UCITS ETF (ISDE.L) on the London Stock Exchange. US-listed halal ETFs like SPUS and HLAL may also be available through international brokers.
Do halal ETFs require dividend purification?
Some halal ETFs may hold stocks that earn a small amount of non-compliant income within shariah tolerance thresholds. Investors are generally advised to purify this portion by donating a small percentage of dividends to charity.
Are halal ETFs a good investment?
Halal ETFs offer diversified, low-cost exposure to shariah-compliant equities. Historically, shariah-screened indices have performed comparably to their conventional counterparts, as the exclusion of highly leveraged financial companies has sometimes been beneficial.
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