Best Halal ETFs And Index Funds In Canada

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Top halal ETFs and islamic index funds in Canada

Wahed FTSE USA Shariah ETF (HLAL) – passively tracks the FTSE USA Shariah Index, applying strict exclusion of even minor non-compliant exposure.
Wealthsimple Shariah World Equity ETF (WSHR) – the only Canadian-listed Shariah ETF offering broad global equity diversification.
SP Funds Dow Jones Global Sukuk ETF (SPSK) – provides monthly income through a portfolio of global sukuk (Islamic bonds).
SP Funds S&P 500 Shariah Industry Exclusions ETF (SPUS) – offers S&P 500 exposure while filtering out all non-compliant industries.
Manulife Shariah Global Equity Fund – tracks a proprietary global Shariah index with exposure to both developed and emerging markets.
Global Iman Fund – focuses on North American equities screened for Shariah compliance, accessible with a $1 minimum via Wealthsimple.
Amana Developing World Fund – targets high-growth Shariah-compliant companies in emerging markets, managed by Saturna Capital.

For Muslim investors, the ability to build a diversified portfolio while staying true to religious guidelines has become easier than ever. Today, there’s a wide variety of halal ETFs and index funds that provide access to Canada’s domestic and international markets while avoiding prohibited sectors. These halal investment options are built with transparency and ethical screening at their core, making them a strong option for long-term, values-based investing. In this guide, we’ll walk through some of the top performing Shariah-compliant ETFs and index funds available in Canada, and how to choose the right ones depending on your financial goals and comfort with risk.

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.

Best halal ETFs in Canada (2026)

A halal ETF is an exchange traded fund that tracks a basket of Shariah-compliant stocks, offering Muslim investors a low-cost way to diversify while staying true to Islamic principles. Unlike conventional ETFs, which might include interest-heavy banks or companies involved in alcohol, halal ETFs follow strict screening criteria. What sets an Islamic ETF in Canada apart is that most of them are double-checked by Shariah boards and use quarterly screenings to ensure the companies remain compliant. Some even donate impermissible income rather than keeping it, a rare but valuable practice that reflects ethical depth.

Below is a comparative table of halal ETFs available to Canadian investors:

Best halal ETFs in Canada
ETF Name	Expense Ratio	YTD Return (2025)	Dividend Yield	Total AUM	Notes
Wahed FTSEUSA ShariahETF (HLAL)	0.50%	≈ 11.8%	≈ 0.63%	≈ $640M	Index ETF that passively tracks the FTSE USAShariah index, excludes companies with even small exposure to non-compliant sectors.
Wealthsimple Shariah World Equity ETF (WSHR)	0.50%	≈ 12.6%	≈ 1.43%	≈ $171.5M CAD	The only Canadian-listed Shariah ETF with broad geographic diversification.
SP Funds Dow Jones Global Sukuk ETF (SPSK)	0.59%	≈ 3.4%	≈ 2.12%	≈ $127.7M	Focuses on global sukuk (Islamic bonds) with monthly income distribution.
SP FundsS&P 500Shariah Industry Exclusions ETF (SPUS)	0.49%	≈ 19.8%	≈ 0.96%	≈ $312M	Covers the U.S. market, excluding industries that don’t meet Shariah standards.

Best Shariah-compliant index funds in Canada

A halal index fund is a mutual or UCITS fund that passively tracks a Shariah-compliant benchmark. Unlike ETFs, it is not traded on an exchange and is purchased directly through the fund provider or participating platforms. The composition is selected using strict Shariah screens that exclude companies involved in prohibited sectors such as interest-based finance, alcohol, tobacco, gambling, and certain entertainment activities. In addition, financial ratios are filtered to avoid excessive leverage, low liquidity, or significant interest income. For Canadian investors, halal index funds provide a simple, institutionally overseen way to build a faith-aligned, diversified portfolio without active management.

Manulife Shariah Global Equity Fund

As of mid-2025, this fund is one of Canada’s leading Shariah-compliant global equity index funds. It tracks a proprietary index screened for Shariah compliance across multiple sectors and regions, offering exposure to both developed and emerging markets.

Manulife Shariah Global Equity Fund
Parameter	Value
Index	Proprietary Shariah Global Equity Index
MER	1.80% management + 0.06% trustee
Minimum Investment	$1,000 CAD
Domicile	Canada
Replication	Physical, full
Availability	Direct via Manulife and distributors
Shariah Oversight	Independent Shariah Advisory Board

Global Iman Fund

Launched in partnership with Global Growth Assets and available via Wealthsimple, this fund invests in North American equities screened for Shariah compliance. It is a popular choice among retail investors due to its low minimum investment and easy online access.

Global Iman Fund
Parameter	Value
Index	Dow Jones Islamic Market North America Index
MER	~0.50%
Minimum Investment	$1 (via Wealthsimple app)
Domicile	Canada
Replication	Physical, full
Availability	Wealthsimple and approved dealers
Shariah Oversight	Independent Shariah Supervisory Board

Amana Developing World Fund

Managed by Saturna Capital, this fund focuses on Shariah-compliant companies in emerging markets with high growth potential. While Canada-based investors can access it through approved brokers, it is domiciled in the U.S.

Amana Developing World Fund
Parameter	Value
Index	Proprietary emerging markets Shariah benchmark
MER	~1.20%
Minimum Investment	$100 (Investor class)
Domicile	United States
Replication	Active screening with index-style weighting
Availability	Cross-border via approved brokers
Shariah Oversight	Saturna Shariah Supervisory Board

You can access the above instruments through international brokers that offer Islamic accounts. Some of the top brokers that fit this criteria are presented in the table below.

Best Shariah-compliant brokers that offer ETFs and Indices investing
	Min. deposit, $	Regulation	TU overall score	Open an account
ZForex	10		7.89	Go to broker Your capital is at risk.
Plus500	100	CySEC, FCA, ASIC, FMA, FSCA, FSA Seychelles, EFSA, MAS, DFSA, SCB	7.55	Go to broker 80% of retail CFD accounts lose money.
OANDA		FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA	6.85	Go to broker Your capital is at risk.
FOREX.com	100	CIMA, FCA, FSA (Japan), NFA, IIROC, ASIC, CFTC	6.82	Study review
XM	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.

If you’re also willing to explore other halal investment options in Canada, check out these guides:

What makes an ETF or index fund halal?

To understand what qualifies an ETF or an index fund as halal, you need to look deeper than just the label, these are the key technical parameters that define it.

Interest income must stay below 5 percent. The company’s total interest-based income (from loans or bank deposits) must be under 5 percent of its revenue.
Debt ratio must be under 33 percent. Total debt, whether short or long term, must be less than 33 percent of a company’s total market cap or assets, depending on the screening standard used.
Cash and interest-bearing assets must be limited. Most Shariah standards require that cash and similar assets make up no more than 33 percent of the company's total assets.
Non-halal business activity cap is 5 percent. Revenue from prohibited sectors like alcohol, gambling, weapons, and pork must stay under 5 percent of the company’s total income.
Purification process is mandatory. Any income derived from non-permissible sources must be purified by donating that exact amount to charity without tax benefit.
ETF manager must follow active Shariah screening. A Shariah compliant ETF in Canada must be overseen by Islamic finance scholars who regularly review the portfolio and rebalance based on compliance.
Screening methodology must be publicly disclosed. Whether the fund follows AAOIFI, MSCI, or a proprietary model, the screening process must be published and transparent.
ETF must avoid interest-based derivatives. No part of the ETF structure should use interest-bearing instruments, swaps, or synthetic exposure that introduces riba risk.

How to choose a halal ETF or index fund

Choosing the right Shariah-compliant ETF can be tricky, especially in a Western market. Here are key insights beginners often overlook.

Check the screening frequency. A good Shariah ETF in Canada updates its stock list often to remove companies that fall out of compliance, not just once a year.
Look at the purification method. Many beginners miss how funds handle interest income, some reinvest it, others purify it, and this affects how halal the returns are.
Watch the sector tilt. Most halal ETFs avoid financials and end up heavy in tech or healthcare, which means you’re taking on sector-specific risk.
Know who the Shariah board is. Not all boards are equal, a recognized Shariah advisor adds real credibility to Canada’s halal ETF options.
Read the fatwa or Shariah audit. A truly Sharia compliant ETF in Canada will publish clear documentation explaining how compliance is monitored.
See how closely it tracks the index. Some halal ETFs have high tracking errors due to stock rebalancing, this can affect performance more than you’d expect.
Understand local vs global screens. A company may be halal under AAOIFI standards but excluded under local Canadian screens, this mismatch matters.

Boost halal ETF gains in Canada by leveraging sector tilts and tax-sheltered compounding

Most people just buy a halal ETF and leave it at that, but there’s a smarter way to do it. Since most of these funds lean heavily on tech and energy (because of Shariah rules), you can shift your mix based on what’s happening in the broader economy. If tech looks like it’s bouncing back or oil demand is climbing, adjusting your halal picks slightly in that direction can give you better results without stepping outside your ethical lane.

Another smart move is to keep an eye on when the fund updates its list of stocks. Some do this every six months, and that shake-up can affect how well the ETF performs. A little prep, checking performance trends just before and after those updates, can help you make small but powerful moves. And if your money’s in a TFSA, those gains stack up tax-free. Faith-based investing doesn’t have to mean passive investing.

Conclusion

Halal ETFs and index funds in Canada are a practical solution for Muslims seeking faith-aligned wealth building. While the market is still developing, high-quality options like WSHR, HLAL, and SPUS offer compliant exposure to global equities. Always verify certification, track fund audits, and review performance through a Shariah investment lens.

FAQs

Can I receive dividends from halal ETFs?

Yes, many halal ETFs do pay dividends, but they are purified before distribution. This means any non-compliant income (like interest) is removed and donated to charity, so the dividends you receive are Shariah-compliant.

Are halal ETFs more expensive than regular ETFs?

Sometimes. Because halal ETFs require active Shariah screening and audits, their fees (expense ratios) can be slightly higher. However, many remain competitive, especially compared to actively managed mutual funds.

Do I need a Muslim brokerage account to invest in halal ETFs?

No, you can invest in halal ETFs using any mainstream Canadian brokerage like Questrade or Wealthsimple. Just make sure the ETF itself is Shariah-compliant, your brokerage doesn’t need to be.

Can non-Muslims invest in halal ETFs?

Absolutely. Halal ETFs are open to everyone. In fact, many non-Muslim investors choose them for their ethical filters, transparency, and focus on socially responsible investing.

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