Best Shariah Compliant Mutual Funds In The UAE (2026)

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The best Shariah-compliant mutual funds in the UAE:

Emirates Islamic Franklin Global Sukuk Fund. USD-based sukuk, minimum USD 500, ideal for stable income.
ADCB UAE Equity Fund. AED-denominated equity fund focused on Shariah-compliant UAE stocks, minimum AED 5,000.
Dubai Islamic Bank Templeton Shariah Global Equity. Global halal equity exposure in USD, minimum USD 1,000.
Mashreq Al-Islami Income Fund. USDsukuk-focused fund offering fixed-income style returns, minimum USD 5,000.
Emirates Islamic Global Balanced Fund. Multi-asset halal investment combining equities and sukuk, minimum USD 1,000.

When evaluating Shariah compliant mutual funds in the UAE, investors must consider several key factors. These include limits on debt ratios, exclusion of impermissible industries, oversight by a qualified Shariah board, and strict screening procedures. In 2026, local banks and financial institutions offer structured portfolios across sukuk, equities, and diversified asset classes, with options tailored by geography and currency. Each product follows clear guidelines around asset selection, purification, and reporting.

Investment options are presented in standard formats, based on return expectations, investment duration, and asset composition. This guide brings together the most reliable offerings in the space of Islamic mutual funds in the UAE, helping investors tackle a market shaped by both compliance and performance.

Risk warning: All investments carry risk, including potential capital loss. Economic fluctuations and market changes affect returns, and 40-50% of investors underperform benchmarks. Diversification helps but does not eliminate risks. Invest wisely and consult professional financial advisors.

Overview of Islamic mutual funds in the UAE

Among the various halal investment options, Islamic mutual funds in the UAE stand out for their strict adherence to Shariah principles and their accessibility to a wide range of investors — both local and international. What sets them apart is not just compliance, but transparency and inclusivity. Unlike conventional funds, these portfolios are purified from minor income derived from non-permissible (haram) sources, ensuring that even incidental interest or unethical revenue is removed.

A key strength lies in regulatory oversight. The UAE’s Securities and Commodities Authority (SCA) mandates that fund managers clearly disclose how Shariah compliance is monitored, including detailed explanations of what types of income are permitted. This level of accountability is still rare in many global markets.

What truly makes these funds unique is their collaborative foundation. From the very beginning, they are designed in close consultation with Shariah scholars, who not only verify compliance but also guide investment strategy — including sector preferences and timing. Some funds go even further by offering automated zakat tracking, directly included in investor reports, making religious financial obligations easier to manage.

1. Franklin Global Sukuk Fund

One of the UAE’s most accessible sukuk funds, offered through Emirates Islamic in partnership with Franklin Templeton. It invests in a diversified pool of global investment-grade sukuk, issued by sovereign and corporate entities. Ideal for investors seeking capital preservation and steady halal income in USD.

Type: Fixed Income (Sukuk)
Shariah supervision: Franklin Templeton Shariah Board
Launch date: October 2012
Returns: 1 year: 4.5%, 3 years: 3.8%, 5 years: 3.9%
Minimum investment: $500
Fees: Expense ratio ~1.3%, no entry or exit load

2. Emirates NBD Global Sukuk Fund

A sukuk-focused mutual fund designed for medium- to long-term halal fixed income. It invests in a globally diversified sukuk portfolio with active duration and credit risk management. Offered via Emirates Islamic, this fund emphasizes capital protection and income consistency.

Type: Sukuk (Islamic bonds)
Shariah supervision: Emirates Islamic Shariah Committee
Launch date: March 2013
Returns: 1 year: 4.1%, 3 years: 3.6%, 5 years: 4.0%
Minimum investment: $500
Fees: Expense ratio ~1.5%, no exit fee

3. Emirates Islamic Global Balanced Fund

A multi-asset halal fund that combines equity and sukuk to create a diversified and risk-balanced portfolio. Suitable for moderate-risk investors seeking both growth and income. The fund adjusts allocation dynamically based on market outlook.

Type: Balanced (equity + sukuk)
Shariah supervision: Emirates Islamic Shariah Board
Launch date: July 2015
Returns: 1 year: 6.8%, 3 years: 7.5%, 5 years: 8.2%
Minimum investment: $1,000
Fees: Expense ratio ~1.7%, performance fee may apply

4. UAE Equity Fund

Managed by ADCB Islamic, this fund invests exclusively in Shariah-compliant companies listed on UAE stock markets. It focuses on growth sectors such as real estate, healthcare, and logistics. Ideal for investors who prefer local market exposure.

Type: Equity (domestic)
Shariah supervision: Internal ADCB Shariah Committee
Launch date: January 2011
Returns: 1 year: 10.4%, 3 years: 11.1%, 5 years: 12.8%
Minimum investment: AED 5,000
Fees: Expense ratio ~2.0%, no load

5. Islamic Income Fund (ADCB Islamic)

Designed for conservative investors seeking stable income with minimal volatility, this fund focuses on sukuk and short-term Islamic fixed-income instruments. It’s suitable for parking larger sums in a halal way while earning regular profits.

Type: Income (Sukuk)
Shariah supervision: ADCB Fatwa and Shariah Supervisory Board
Launch date: May 2010
Returns: 1 year: 3.9%, 3 years: 3.4%, 5 years: 3.6%
Minimum investment: AED 10,000
Fees: Expense ratio ~1.2%, no entry/exit charges

6. Islamic Balanced Fund (ADCB Islamic)

A well-diversified fund combining Shariah-compliant equities and sukuk, offering medium-risk exposure. Designed for investors seeking a mix of capital appreciation and income generation while remaining fully halal. Regularly rebalanced to maintain asset allocation in line with Shariah guidelines.

Type: Balanced (equity + sukuk)
Shariah supervision: ADCB Fatwa and Shariah Supervisory Board
Launch date: September 2014
Returns: 1 year: 6.2%, 3 years: 6.7%, 5 years: 7.4%
Minimum investment: AED 5,000
Fees: Expense ratio ~1.6%, no load

7. Money Market Feeder Fund (ADCB Islamic)

This feeder fund provides access to low-risk, short-term Islamic money market instruments. Ideal for conservative investors and those looking to preserve liquidity in a Shariah-compliant manner. Suitable for short-term parking of funds with minimal volatility.

Type: Money Market
Shariah supervision: ADCB Fatwa and Shariah Supervisory Board
Launch date: June 2016
Returns: 1 year: 2.4%, 3 years: 2.0%, 5 years: 2.3%
Minimum investment: AED 2,000
Fees: Expense ratio ~0.9%, no entry/exit fees

8. Franklin Global Sukuk A (via Dubai Islamic Bank)

A globally recognized sukuk fund managed by Franklin Templeton and distributed by Dubai Islamic Bank. Offers exposure to sovereign and corporate sukuk with strong credit ratings. Suitable for risk-averse investors seeking stable, halal income in USD.

Type: Sukuk
Shariah supervision:Shariah Board of Franklin Templeton and DIB
Launch date: November 2012
Returns: 1 year: 4.6%, 3 years: 3.9%, 5 years: 4.1%
Minimum investment: $1,000
Fees: Expense ratio ~1.2%, no hidden charges

9. Templeton Shariah Global Equity Fund (via Dubai Islamic Bank)

A Shariah-compliant global equity fund offering exposure to halal companies across North America, Europe, and Asia. Focuses on sustainable long-term growth. Well-suited for investors with higher risk tolerance seeking international diversification.

Type: Equity (global)
Shariah supervision: Franklin Templeton Global Shariah Supervisory Board
Launch date: March 2011
Returns: 1 year: 9.7%, 3 years: 11.4%, 5 years: 12.9%
Minimum investment: $1,000
Fees: Expense ratio ~1.8%, may include FX costs

10. Emirates Global Sukuk (via Dubai Islamic Bank)

A sukuk fund combining global coverage with a strong focus on capital preservation. Invests in high-quality, investment-grade sukuk across emerging and developed markets. Ideal for those prioritizing consistent halal income.

Type: Sukuk
Shariah supervision: Dubai Islamic BankShariah Supervisory Board
Launch date: August 2013
Returns: 1 year: 4.3%, 3 years: 3.7%, 5 years: 3.9%
Minimum investment: $1,000
Fees: Expense ratio ~1.4%, no exit load

Shariah-compliant mutual funds in the UAE
Fund Name	Provider	Structure	Currency	Minimum Investment
Franklin Global Sukuk Fund	Emirates Islamic	Sukuk	USD	500
Emirates NBD Global Sukuk Fund	Emirates Islamic	Sukuk	USD	500
Emirates Islamic Global Balanced Fund	Emirates Islamic	Multi-Asset	USD	1,000
UAE Equity Fund	ADCB Islamic	Equity	AED	5,000
Islamic Balanced Fund	ADCB Islamic	Balanced	AED	5,000
Money Market Feeder Fund	ADCB Islamic	Money Market	AED	2,000
Islamic Income Fund	ADCB Islamic	Income (Sukuk)	AED	10,000
Franklin Global Sukuk A	Dubai Islamic Bank	Sukuk	USD	1,000
Templeton Shariah Global Equity	Dubai Islamic Bank	Equity	USD	1,000
Emirates Global Sukuk	Dubai Islamic Bank	Sukuk	USD	1,000

Beyond these, if you’re also interested in investing in other halal investment options available in the UAE, you may refer to our guides listed below:

Types of Shariah-compliant funds in the UAE

Main Types of Halal Investment Funds in the UAE

Mutual funds that follow Islamic finance principles in the UAE are generally categorized into four main types, depending on how they’re structured and what they aim to achieve. These categories allow investors to choose according to their goals and risk appetite.

Money-market and short-term liquidity funds

This type focuses on capital preservation and immediate liquidity. Investments are primarily made through Murabaha and Wakalah contracts, offering lower volatility and relatively stable returns. For instance, the Emirates Islamic Money Market Fund reported an annualized return of 4.62% as of April 2025, an attractive choice for conservative investors looking for short-term halal options.

Sukuk (Islamic fixed income instruments)

Sukuk funds allocate investments into Shariah-compliant certificates backed by real assets. These are the Islamic alternative to bonds and aim to generate fixed income without violating religious principles. Investors exploring Islamic mutual funds in the UAE often choose global or regional sukuk portfolios, such as those from Dubai Islamic Bank or Mashreq Al-Islami, to balance risk and returns.

Equity funds

Equity-based Islamic funds invest in halal publicly listed companies that meet specific Shariah screening criteria. For example, the ADCB UAE Equity Fund targets domestic stocks, focusing on long-term capital growth. Investors in these funds avoid companies that earn revenue from non-permissible sources, in line with faith-based investing values.

Balanced and multi-asset funds

These portfolios offer a mix of sukuk, equities, and occasionally alternative halal investments. Aimed at investors seeking both growth and income, they follow fixed guidelines set by religious scholars. Emirates Islamic, for instance, offers multi-asset funds that combine asset classes under unified ethical oversight, making them a strong fit for those interested in a Shariah mutual fund in the UAE that aligns with both performance and compliance goals.

How to start investing in Shariah mutual funds in the UAE?

Start halal mutual fund investing in the UAE easily

Investing in Shariah-based mutual funds in the UAE is typically done through a brokerage account. This account acts as the primary gateway for accessing both bank-managed and independent Islamic funds. Many investors turn to this route when seeking exposure to Islamic mutual funds in the UAE, given the ease of setup and the growing number of compliant options in the market.

Opening a brokerage account

You can open an account with Islamic banking institutions like Emirates Islamic, ADCB Islamic, or Dubai Islamic Bank. These are often accessible through dedicated investment departments or user-friendly mobile apps. Alternatively, several licensed brokerage firms also provide access to Shariah compliant mutual funds in the UAE, especially through platforms regulated by DIFC or ADGM. The setup process usually requires submitting documents such as a valid passport, Emirates ID, and proof of income or funds.

Selecting a fund

Your fund selection will depend on your financial goals and appetite for risk. Options typically include equity, sukuk, money market, or mixed-asset funds. A brokerage account gives you access to both domestic and international offerings. Each fund includes key details like investment strategy, target region, and base currency, helping you make a well-informed decision that aligns with your objectives.

Reviewing terms, fees, and returns

Before investing, it’s important to review the fund factsheet. This document outlines the fee structure, asset breakdown, and historical performance. Sukuk-based funds often return between 3–6% annually, while equity funds are more volatile but may offer higher potential returns. Costs vary depending on whether you go through a bank or a broker, and factors like liquidity and payout schedules can differ from one product to another.

Verifying Shariah compliance

Every eligible fund must be reviewed and approved by a recognized Shariah board. Investors should confirm that certification is in place and that supporting documentation covers audit frequency, income purification, and overall compliance structure. It’s important to ensure the fund is explicitly identified as Shariah-compliant and not simply marketed with Islamic branding.

If you are already investing in Shariah-compliant mutual funds and other halal investment options available in the UAE and are considering expanding your horizons, the global halal investment landscape offers a wealth of opportunities. Beyond traditional mutual funds, investors can explore ethically screened global stocks, Islamic Forex accounts, and even halal-certified cryptocurrency platforms. These options are designed to comply with Islamic investing principles by eliminating interest, avoiding excessive uncertainty, and excluding prohibited industries. If you're looking to diversify your portfolio while maintaining Shariah compliance, the following global platforms provide a gateway to a broader universe of ethical investments.

Best brokers that offer Islamic account
	Currency pairs	Min. deposit, $	Regulation	TU overall score	Open an account
Pepperstone	90		ASIC, FCA, DFSA, BaFin, CMA, SCB, CySec	9.25	Go to broker Your capital is at risk.
FOREX.com	80	100	CIMA, FCA, FSA (Japan), NFA, IIROC, ASIC, CFTC	6.89	Study review
XM	57	5	CySEC, FSC (Belize), DFSA, FSCA, FSA (Seychelles), FSC (Mauritius), SCA (United Arab Emirates), CMA (Kenya)	9.3	Go to broker Your capital is at risk.
OANDA	68		FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA	7.03	Go to broker Your capital is at risk.
Plus500	60	100	CySEC, FCA, ASIC, FMA, FSCA, FSA Seychelles, EFSA, MAS, DFSA, SCB	8.45	Go to broker 80% of retail CFD accounts lose money.

Boost halal returns in the UAE by tracking fund purification ratios and quarterly rebalancing cycles

A lot of beginners think every Shariah-compliant mutual fund is equally clean, but there’s one thing that quietly affects how much halal profit you really keep: purification ratios. Some funds earn a small chunk from non-compliant sources like interest, which then needs to be given away. If you pick funds with lower purification numbers, you hold on to more of what you earn. It’s a small filter that makes a big difference over time.

Here’s something else most people overlook: every fund has a Shariah review schedule, usually every quarter. That’s when they remove stocks that no longer meet the criteria. If you invest right after this cleanup, you’re basically entering at the fund’s most Shariah-pure point. It's a smart way to stay true to your values and get a head start on the next growth cycle.

Conclusion

Shariah compliant mutual funds in the UAE and halal mutual funds in the UAE provide access to instruments with defined asset structures and documented compliance procedures. Yield, liquidity, and risk distribution parameters are set at the fund strategy level and confirmed through factsheets. Access is obtained via a bank or brokerage account, opened through a standard process with identity and source-of-funds verification. Once the account is active, fund selection is based on category, currency, and fee structure. Evaluation data is found in fund documentation, including asset composition, screening criteria, and audit format. Additional materials are available on provider websites and through official registries such as DFSA, SCA, and Islamic fund platforms.

FAQs

Can a share in a Shariah fund be transferred to another person?

Yes, but the transfer must follow the rules of the platform where the fund is held. Most cases require processing through the same bank or broker where the account was opened.

What happens to the fund’s income if Shariah screening is breached?

Any non-compliant income is subject to purification. The amount is redirected to charitable use and cannot benefit the investor in any form.

How can the stability of a Shariah fund be evaluated in volatile markets?

Review the sukuk allocation, regional and sector diversification, and liquidity mechanism. Higher exposure to fixed-income instruments generally indicates lower volatility.

Is it possible to combine Shariah and non-Shariah funds in one portfolio?

Technically yes, if the brokerage account allows it. However, from a Shariah perspective, the overall portfolio would be considered partially non-compliant.

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