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The best Sharia-compliant ETFs

How to invest in Sharia-compliant companies using ETFs

0.50% p.a. - 0.85% p.a.
annual total expense ratio (TER) of Sharia-compliant ETFs
on Sharia-compliant companies, which are tracked by ETFs
on Sharia-compliant companies
The best indices for Sharia-compliant ETFs

How do I invest in Sharia-compliant companies?

The Sharia includes all religious and legal principles, mechanisms for setting norms and rules for the interpretation of the Islamic belief. From the religious practice, rules which are applicable to investments in global capital markets can be derived.

These rules can also be applied to indices. Since income from loans is considered incompatible with Sharia law, Western financial companies are usually excluded from such indices. Companies also have to demonstrate a certain degree of stability and therefore must not exceed defined limits of indebtedness or leverage. Additionally, there are several exclusion criteria for non-Sharia-compliant industries and sectors which are very similar to sustainable indices. As a result, Sharia-compliant indices contain a large number of companies from the healthcare and technology sectors. The index guidelines are monitored by an advisory board of renown Sharia experts.

In this investment guide, you will find ETFs that offer access to Sharia-compliant investment. Currently, there are 3 indices available tracked by 3 ETFs.
 

MSCI World Islamic performance

1 month: 5.56%
1 year: -0.80%
3 years: 16.89%
5 years: 27.09%
 

Sharia-compliant ETFs in comparison

The most important factors at a glance

When choosing a Sharia-compliant ETF one should consider several other factors in addition to the methodology of the underlying index and performance of an ETF. For better comparison, you will find a list of all Sharia-compliant ETFs with details on size, cost, age, income, domicile and replication method ranked by fund size.

Compare all Sharia-compliant ETFs in detail
Compare all Sharia-compliant ETFs in a chart

Provider
ISIN
  Fund size
in m EUR
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI World Islamic UCITS ETFIE00B27YCN58 145 0.60% p.a. Distributing Ireland Optimized sampling
iShares MSCI USA Islamic UCITS ETFIE00B296QM64 65 0.50% p.a. Distributing Ireland Optimized sampling
iShares MSCI Emerging Markets Islamic UCITS ETFIE00B27YCP72 50 0.85% p.a. Distributing Ireland Full replication

Source: justETF.com; As of 26/11/20

 

Return comparison of all Sharia-compliant ETFs

The table shows the returns of all Sharia-compliant ETFs in comparison. All return figures are including dividends as of month end. Besides the return the reference date on which you conduct the comparison is important. In order to find the best ETFs, you can also perform a chart comparison.

ETF   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
iShares MSCI Emerging Markets Islamic UCITS ETF 0.30% 5.77% 17.14% 10.07% 7.55%
iShares MSCI USA Islamic UCITS ETF -4.10% -0.35% -1.88% -4.34% 12.28%
iShares MSCI World Islamic UCITS ETF -4.60% -1.30% -0.58% -7.03% 4.69%
ETF   2020
in %
2019
in %
2018
in %
2017
in %
2016
in %
iShares MSCI Emerging Markets Islamic UCITS ETF 2.13% 22.73% -13.44% 23.86% 12.49%
iShares MSCI USA Islamic UCITS ETF -9.67% 23.34% -0.67% 0.05% 12.29%
iShares MSCI World Islamic UCITS ETF -11.58% 24.35% -5.10% 4.67% 10.95%

Source: justETF.com; As of 31/10/20; Calculations in EUR including dividends