Best Halal & Shariah-Compliant ETFs And Index Funds In Singapore

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With the lack of local options here are the best international halal & Shariah-compliant ETFs and index funds available for investors in Singapore:

iShares MSCI World Islamic UCITS ETF (ISWD) – Provides global exposure to developed markets screened for Shariah compliance.
iShares MSCI USA Islamic UCITS ETF (ISUS) – Focuses on U.S. stocks that meet Islamic investment criteria.
iShares MSCI Emerging Markets Islamic UCITS ETF (ISDE) – Targets emerging market equities aligned with Shariah principles.
HSBC Islamic Global Sukuk Index Fund – Offers access to a diversified portfolio of sukuk through a reputable benchmark.
HSBC Islamic Global Equity IndexFund – Tracks a Shariah-screened global equity index with a passive investment approach.
PRULink Islamic Global Equity Index Fund – An ILP-based product mirroring the HSBC equity fund for aligned portfolio construction.

Islamic index funds and ETFs aren’t directly offered by local players, moreover most of them include companies from prohibited sectors like alcohol, gambling, or interest-driven income. To invest ethically with respect to Sharia compliance, it is better to focus on index funds and ETFS that track international halal indices, e.g. MSCI Islamic or FTSE Shariah indices, which in turn follow AAOIFI guidelines. International brokers, like Wahed, Syfe, and others offer access to such funds, though many platforms still lack halal filters or clear halal labeling for traded assets. If you're seeking to invest in halal ETFs and index funds in Singapore, this guide outlines which funds meet the criteria and how to buy them.

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.

Top halal ETFs and index funds in Singapore

A halal ETF is a type of exchange-traded fund designed to invest exclusively into halal investment options and avoid investments in businesses that are considered impermissible under Islamic principles. These include companies involved in alcohol, gambling, tobacco, weapons manufacturing, or interest-based financial services. The selection of assets is based on strict religious filters that assess revenue sources, financial ratios, and the level of involvement in non-compliant activities. All screening is aligned with standards established by AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions), which helps define what qualifies as a halal ETF in Singapore as well as other global markets.

These funds include companies tracked in islamic indices like the FTSE Shariah, MSCI Islamic, and Dow Jones Islamic benchmarks. They apply both qualitative filters, such as excluding certain industries, and quantitative limits, including a cap of 5% on revenue from prohibited activities and a maximum debt-to-equity ratio of 33%. These structural rules form the foundation of eligibility when evaluating a Shariah compliant ETF in Singapore, ensuring that each fund upholds the ethical and financial integrity required under Islamic finance.

Best Shariah-compliant ETFs for investors in Singapore

iShares MSCI World Islamic UCITS ETF (ISWD). Offers global exposure with a Total Expense Ratio (TER) of 0.30% and Assets Under Management (AUM) of approximately €660 million.
iShares MSCI USA Islamic UCITS ETF (ISUS). Focuses on the US market, with a TER of 0.30% and AUM of around €215 million.
iShares MSCI Emerging Markets Islamic UCITS ETF (ISDE). Targets emerging markets, carrying a TER of 0.35% and an AUM of about €266 million.
Wahed FTSE USA Shariah ETF (HLAL). A US equity-focused fund with a TER of 0.50% and estimated AUM between $20–25 million.
Wahed Dow Jones Islamic World ETF (UMMA). Provides global coverage and tracks the Dow Jones Islamic Titans 100 Index, with a TER of 0.65%.
SP Funds S&P 500 Shariah ETF (SPUS). Screens companies in the S&P 500 for Shariah compliance and has a TER of 0.49%.
SP Funds Dow Jones Global Sukuk ETF (SPSK). A sukuk-based fixed-income ETF with a TER of 0.55%.

Top Shariah-compliant ETFs in Singapore
ETF	Focus	YTD Return (%)	AUM	TER (%)	P/E Ratio or Yield*
iShares MSCI World Islamic UCITS ETF (ISWD)	Global Equity	7.09	€760 M	0.3	P/E 24.9
iShares MSCI USA Islamic UCITS ETF (ISUS)	US Equity	3.83	€215 M	0.3	P/E 28.8, Yield 0.83%
iShares MSCI Emerging Markets Islamic UCITS ETF (ISDE)	Emerging Markets Equity	11.3	€267 M	0.35	P/E 16.1, Yield 2.30%
Wahed FTSE USA Shariah ETF (HLAL)	US Equity	–1.23	$611.6 M	0.5	Yield – (n/a for equity), NAV $52.01
Wahed Dow Jones Islamic World ETF (UMMA)	Global Equity	11.27	$131.5 M	0.65	Yield 0.84%, NAV $25.80
SP Funds S&P 500 Shariah ETF (SPUS)	US Equity	0.01	$1.27 B	0.45	Yield 0.72%
SP FundsDow Jones Global SukukETF (SPSK)	Global Sukuk Bonds	2.25	$315 M	0.5	Yield 3.49%

Note: While these ETFs are domiciled outside Singapore, all listed funds are accessible to Singapore-based investors and meet verified Shariah compliance standards.

TER, or Total Expense Ratio, reflects the yearly cost of managing and operating the ETF. It includes management fees, custodial services, administrative charges, and auditing costs. This cost is built into the price of the ETF and directly influences net investor returns.

AUM, or Assets Under Management, represents the total market value of the assets held by a particular ETF. It is a useful indicator of fund size, stability, and liquidity. Generally, a higher AUM suggests greater investor confidence and a lower risk of fund closure. AUM is reported in either USD or EUR, depending on the ETF’s base currency.

For investors in Singapore and other countries, to ensure that Shariah compliant ETFs meet consistent international benchmarks, compliance reviews are conducted by advisors like Yasaar Limited, SRB, and the Shariyah Review Bureau. In the Singaporean context, the Majlis Ugama Islam Singapura (MUIS) also plays a role in maintaining Shariah compliance for locally accessible funds.

Halal index funds in Singapore

Unlike ETFs, halal index funds mimic exactly the assets tracked in dedicated halal stock indices. While, same as for ETFs, currently there is a lack of such local halal index funds in Singapore. Therefore investors from Singapore can appeal to best index funds and ETFs on a global scale via a variety of international brokerage firms and platforms. Islamic index funds are typically offered as mutual funds or ILPs (investment-linked plans) that follow Shariah principles. Rather than just avoiding restricted sectors, these funds are linked to indices that have received certification from recognized Shariah advisory boards. Some examples include:

HSBC Islamic Global Sukuk Index Fund. Follows the FTSE IdealRatings Sukuk Index, with an ongoing charge figure (OCF) of approximately 0.70%.
HSBC Islamic Global Equity Index Fund. Tracks the Dow Jones Islamic Market Titans 100 Index, providing exposure to Shariah-compliant equities.
PRULink Islamic Global Equity Index Fund. Structured as an ILP, it mirrors the HSBC equity fund and tracks the same index for consistency in holdings.

The underlying indices are what determine whether a fund is in line with Islamic finance guidelines. Each fund relies on a specific benchmark to screen eligible investments. For example:

FTSE IdealRatings Sukuk. Used for sukuk-based portfolios, includes only bonds that comply with Shariah rules.
Dow Jones Islamic Market Titans 100. Includes large-cap stocks filtered by both sector and financial ratio screens, forming the basis of the HSBC and Prudential funds.
MSCI Islamic. Often used in structuring Shariah-compliant ETFs in Singapore, this index helps ensure that asset selection is guided by Islamic investment standards.

By tracking an approved index, a fund maintains its compliance with Islamic principles at every level of portfolio construction. Investors can be assured that if a fund is tied to a Shariah-screened benchmark, the securities included have already been filtered through sector exclusions and financial ratios. This system is particularly crucial when assessing Islamic ETFs in Singapore, where automated screening plays a key role in maintaining religious adherence.

For those looking to invest in such funds within Singapore, there are three primary channels:

Through ILPs like the PRULink Islamic Global Equity Index Fund, which integrates the HSBC equity strategy into an insurance-linked structure.
Via direct offerings from HSBC Asset Management Singapore, which manages both sukuk and equity portfolios under local regulatory oversight.
Or through banks and financial platforms that provide access to mutual funds or ILPs, assuming investors meet the eligibility criteria for investment or insurance-linked accounts.

These pathways make it easier for retail investors in Singapore to gain exposure to Shariah-compliant ETFs and index funds, whether through structured insurance products or managed portfolios aligned with Islamic finance norms.

Comparison: ETF vs index funds
Parameter	Shariah-compliant ETF	Islamic index funds / ILP
Liquidity	Traded on exchanges with intraday pricing and arbitrage	No secondary market; units redeemed via fund manager only
Fees	TER ranges from 0.30% to ~0.65%	OCF typically between 0.70% and 0.96%, often higher than ETF fees
Minimum investment	Often as low as one share (~$100)	From ~$5,000 via direct access; ILPs depend on insurance policy terms
Accessibility	Available through online and global broker platforms	Only accessible via ILPs, fund houses, or select banks
Asset management	Passive, with real-time pricing	Passive, but managed via pooled structures with fund oversight

Use case examples:

Long-term accumulation. ETFs like iShares MSCI World Islamic are suitable for recurring contributions and portfolio building.
Savings and capital preservation. HSBC Global Sukuk Index Fund provides lower volatility and stable exposure to halal index funds in Singapore.
Insurance-integrated investing. ILP products like PRULink Islamic Global Equity Index Fund offer bundled investment with protection under one account.

Key limitations and risks of Shariah ETFs/funds

Risks and limitations of Islamic ETFs/funds

Religious restrictions

Islamic funds avoid investing in companies involved in activities considered non-compliant with Islamic law, such as alcohol, gambling, tobacco, weapons, and interest-based financial services. These sector exclusions are paired with financial filters. For example, if a company earns more than 5% of its revenue from prohibited sources or its debt ratios exceed acceptable thresholds, it can no longer qualify as part of any Shariah compliant index funds in Singapore.

Market risks

While these funds follow strict religious guidelines, they are still affected by normal market volatility. Islamic ETFs can experience significant price swings during global market downturns. Additionally, when assets are denominated in foreign currencies like the USD, EUR, or GBP, currency risk becomes a factor. Because Shariah screening limits the pool of eligible stocks, these funds may become overly concentrated in a few sectors, which is something investors in Islamic index funds in Singapore need to consider.

Access and liquidity constraints

Liquidity is another consideration. Many Islamic ETFs trade in smaller volumes compared to their conventional counterparts, which can make entering and exiting positions more difficult. In Singapore, retail investors may also face platform-specific requirements, minimum investment limits, or restrictions tied to account types. Some funds may limit redemption windows or accept subscriptions only during specific periods, which affects overall accessibility for those seeking exposure to halal index funds in Singapore.

Regulatory oversight

Oversight of Islamic funds in Singapore is handled by the Monetary Authority of Singapore (MAS), which is responsible for fund licensing and operational guidelines. Religious compliance is typically verified by MUIS or other recognized Shariah boards. However, interpretations of Shariah principles can differ across jurisdictions, which may result in changes to how funds are screened or certified. These differences can affect both Islamic index funds in Singapore and other faith-based products, not only in terms of religious compliance but also from a regulatory and market performance perspective.

Beyond ETFs and index funds, there are other investment options available in Singapore that align with religious beliefs. You can learn more about them through our guides listed below:

Halal Stocks in Singapore.
Halal Mutual Funds in Singapore.
Sukuk Bonds in Singapore.

Further, if you're interested in exploring beyond halal investment options in Singapore, the global landscape offers a diverse range of Shariah-compliant investment opportunities. From ethically screened stocks and sukuk to Islamic Forex accounts and halal crypto platforms, investors now have access to tools that align with Islamic principles while offering global exposure. These options are carefully structured to avoid interest, excessive uncertainty, and non-compliant sectors. If you're ready to explore a wider world of ethical investing, the platforms listed below can help you get started with confidence.

Best brokers that offer Islamic account
	Currency pairs	Min. deposit, $	Regulation	TU overall score	Open an account
zForex	50	10		7.89	Go to broker Your capital is at risk.
FOREX.com	80	100	CIMA, FCA, FSA (Japan), NFA, IIROC, ASIC, CFTC	6.82	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	6.87	Go to broker Your capital is at risk.
Plus500	60	100	CySEC, FCA, ASIC, FMA, FSCA, FSA Seychelles, EFSA, MAS, DFSA, SCB	7.54	Go to broker 80% of retail CFD accounts lose money.

Boost returns in halal ETFs by using sector cycles and dividend reinvestment timing in Singapore

Most people start with broad halal funds assuming they’re automatically the best option. But if you pay attention to economic cycles, you can do more. Some halal ETFs have heavier exposure to rising sectors like tech or energy during growth phases. If you match your investment to those cycles, your gains could grow faster without stepping outside Shariah rules. This kind of fine-tuning is rarely used but can quietly boost your results.

Here’s something else most beginners never consider: align your dividend reinvestment with your zakat calendar. Instead of letting your profits automatically roll back in, wait until you’ve calculated your zakat on clear profit vs capital. It gives you more control and makes sure your obligations are transparent. Not only does this bring peace of mind, but it also keeps your investment spiritually aligned and financially clean.

Conclusion

Shariah compliant ETFs offer a lower entry point and are suitable for self-directed investing through broker platforms. Index funds and ILP-based products typically require higher minimums and are accessed via fund managers or insurance providers. ETFs provide flexibility for rebalancing, while index funds follow fixed allocation models. The choice depends on your objective: short-term deployment can be handled through ETFs, while long-term accumulation fits better with ILPs that have a defined structure. You can start with minimal capital using demo accounts on global brokers or Islamic platforms with built-in screening. Before investing, review the fund’s holdings and its Shariah audit process.

FAQs

Can I build an Islamic portfolio using only individual stocks?

Yes, but it requires manual screening for Shariah compliance, checking financial ratios, and ongoing monitoring. This approach demands time and understanding of AAOIFI standards.

How can I tell if a fund has lost its Shariah-compliant status?

You should review the fund’s latest disclosures and confirm active certification from a Shariah board. Removal is usually documented in quarterly reports.

What if a fund contains questionable or borderline assets?

Assess the proportion of such assets. If they exceed the accepted threshold, the fund is no longer compliant and should be replaced with an alternative.

Is an Islamic ETF suitable for short-term trading?

Technically yes, but the structure is intended for long-term holding. Frequent trading increases costs and may conflict with the fund’s ethical screening objectives.

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