Best Halal ETFs (Shariah-Compliant) in 2025 — Performance, Fees & Top Picks

tldr; SPUS is the best halal ETF for 2025, with the strongest performance record among US-focused Shariah-compliant funds. Its 0.49% expense ratio is high compared to conventional ETFs but justified by its solid 11.65% annual returns since inception, while IGDA offers the best option for global exposure.

Let's be blunt: Most halal ETFs are expensive, poorly diversified, and underperform the market. But there are a few worth considering, and more importantly, there's a better way to invest that we'll get to.

What Is a Halal ETF?

A halal ETF is a type of investment that lets you own a collection of Shariah-compliant stocks in a single purchase. These funds strictly follow Islamic financial principles, excluding companies involved in interest-based businesses (banks), alcohol, tobacco, gambling, adult entertainment, and other prohibited activities. They also screen out companies with excessive debt or interest income.

Like conventional ETFs, halal ETFs trade on stock exchanges and can be bought or sold throughout the trading day. They provide instant diversification across many companies while maintaining compliance with Islamic investing principles.

When you buy a single share of a halal ETF, you're essentially purchasing tiny pieces of each company held within the fund. These holdings are regularly reviewed (typically quarterly) to ensure ongoing Shariah compliance.

Here's a complete list of halal ETFs available today:

ETF	Title	Geography	Asset	Ex
ISDU	iShares MSCI USA Islamic UCITS ETF	US 🇺🇸	Equities	🇬🇧
SPUS	SP Funds S&P 500 Sharia Industry Exclusions ETF	US 🇺🇸	Equities	🇺🇸
HLAL	Wahed FTSE USA Shariah ETF	US 🇺🇸	Equities	🇺🇸
SPRE	SP Funds S&P Global REIT Sharia ETF	US 🇺🇸	Equities	🇺🇸
ISDW	iShares MSCI World Islamic UCITS ETF	World 🌍	Equities	🇬🇧
IGDA	Invesco Dow Jones Islamic Global Developed Markets UCITS	World 🌍	Equities	🇬🇧
WSHR	Wealthsimple Shariah World Equity Index ETF	World 🌍	Equities	🇨🇦
UMMA	Wahed Dow Jones Islamic World ETF	World 🌍	Equities	🇺🇸
SPSK	The SP Funds Dow Jones Global Sukuk ETF	World 🌍	Sukuk	🇺🇸
ISDE	iShares MSCI EM Islamic UCITS ETF	Emerging 🌍	Equities	🇬🇧

Best Halal ETFs in 2025 (Ranked)

We've analyzed all available halal ETFs based on expense ratios, performance, diversification, and accessibility. Here's how they stack up in 2025:

Last updated: May 2025

Ticker	Region	Expense Ratio	5-yr CAGR	Top-10 Weight	AUM
SPUS	US 🇺🇸	0.49%	16.81%	53.47%	$986M
HLAL	US 🇺🇸	0.50%	16.4%	52.96%	$501M
IGDA	World 🌍	0.40%	2.16%	35.12%	$771M
WSHR	World 🌍	0.50%	3.92%	9.32%	$319M
SPSK	World (Sukuk) 🌍	0.79%	-0.94%	18.81%	$302M
ISDU	US 🇺🇸	0.50%	9.21%	57.15%	$186M
ISDW	World 🌍	0.50%	8.01%	39.11%	$584M
UMMA	World 🌍	0.51%	-4.35%	39.17%	$110M
SPRE	US (REIT) 🇺🇸	0.59%	-3.26%	76.83%	$144M
ISDE	Emerging 🌍	0.85%	3.02%	33.31%	$255M

SPUS – Best for U.S. Exposure

📖 Prospectus page

Key Facts:

• Expense Ratio: 0.49%
• CAGR since inception: 11.65%
• Top 10 concentration: 53.47%
• Launch date: December 2019

SPUS is our top pick for U.S. market exposure. Launched in December 2019 — just as the ground underneath the markets was starting to collapse due to COVID-19 — this fund has actually outperformed the S&P 500 since inception. That's right, a halal ETF beating the market! It's delivered 11.65% average annual returns compared to 9.55% for the broader market.

While its 0.49% expense ratio is ridiculously higher than conventional ETFs (which can be as low as 0.03%), SPUS at least justifies this highway robbery with consistent performance and solid Shariah compliance methodology. Its concentration in top holdings (53.47%) remains a concern, but it's among the better diversified halal options. Not exactly a high bar to clear, but hey — we'll take what we can get!

HLAL – Runner-up U.S.

📖 Prospectus page

Key Facts:

• Expense Ratio: 0.50%
• CAGR since inception: 10.78%
• Top 10 concentration: 52.96%
• Launch date: July 2019

HLAL comes in as our runner-up for U.S. market exposure. Launched by Wahed Invest in mid-2019, this ETF has also delivered strong returns, with a CAGR of 10.78% versus the S&P 500's 10.02% over the same period. Once again, we have an outperformer — who said ethical investing had to underperform?

With an expense ratio nearly identical to SPUS at 0.50% (still highway robbery compared to conventional ETFs), HLAL offers a very similar investment profile. Its top 10 holdings concentration is slightly higher at 52.96% — worse than SPUS but not as horrific as some others we'll see. The top holdings are strikingly similar to SPUS, with big tech absolutely dominating the portfolio.

IGDA – Best Global Diversification

📖 Prospectus page

Key Facts:

• Expense Ratio: 0.40%
• CAGR since inception: 2.16%
• Top 10 concentration: 35.12%
• Launch date: January 2022

For investors seeking global exposure, IGDA is our top recommendation. Launched in 2022 by Invesco, this ETF tracks the Dow Jones Islamic Market Developed Markets Index, providing diversification across developed markets worldwide.

What sets IGDA apart is its lower expense ratio of 0.40% – the most competitive among halal ETFs (though still ludicrously expensive compared to conventional global ETFs at 0.05-0.10%). While it has underperformed the S&P 500 slightly since inception, global funds typically follow different performance patterns, offering valuable diversification benefits. With top 10 holdings at 35.12%, it's reasonably diversified for a halal fund, though still concentrated compared to conventional global ETFs.

WSHR – Canada-Friendly Pick

📖 Prospectus page

Key Facts:

• Expense Ratio: 0.50%
• CAGR since inception: 3.92%
• Top 10 concentration: 9.32%
• Launch date: May 2021

For Canadian investors, WSHR offers a convenient, locally-listed option that provides global diversification. Listed on the NEO exchange, this Wealthsimple ETF targets Shariah-compliant companies in developed markets.

The standout feature of WSHR is its relatively low concentration in top holdings – at just 9.32%, it's the most diversified halal equity ETF in our rankings (finally, one that actually deserves to be called diversified!). While its performance (3.92% CAGR) lags the S&P 500, it provides Canadian investors with a straightforward way to access global halal investments without currency conversion complications. It underperforms the S&P500 but it's more diversified. Maybe worth considering if you have no other options, but I wouldn't phone home about it.

SPSK – Only Sukuk ETF

📖 Prospectus page

Key Facts:

• Expense Ratio: 0.79%
• CAGR since inception: -2.02%
• Top 10 concentration: 18.81%
• Launch date: December 2019

SPSK stands as the only US-listed ETF providing access to the global Sukuk (Islamic bonds) market. For investors seeking fixed-income exposure in a Shariah-compliant wrapper, it's the sole option available.

However, performance has been utterly disappointing. Despite Sukuk typically being considered lower-risk investments, SPSK has actually lost money since inception, with a negative CAGR of -2.02%. Somehow, this embarrassment of a fund has managed to lose money despite the "predictable" returns Sukuk promise.

As expected, you can see that SPSK is much less volatile than SPY -- the only problem with that of course is that it's dropping in a less volatile manner. While it offers excellent diversification (top 10 holdings at just 18.81%), its high expense ratio of 0.79% further erodes returns. I feel sorry for anyone who puts money here; you're practically lighting it on fire. It's only recommended for investors specifically seeking Sukuk exposure who have no viable alternatives and enjoy watching their money slowly vanish.

The "Legacy" Halal ETFs (Approach with Caution)

The following ETFs were among the first Shariah-compliant funds available to investors. While they deserve credit for pioneering the space, their performance and characteristics make them difficult to recommend in 2025.

ISDU / ISUS 🇺🇸 – The 'OG' Halal ETF

📖 Prospectus page

Key Facts:

• Expense Ratio: 0.50%
• CAGR since inception: 5.23%
• Top 10 concentration: 57.15%
• Launch date: December 2007

This is the 'OG' Halal ETF — launched all the way back in 2007. There are two flavors of this ETF, the ISDU flavor (in USD) and the ISUS (in GBP). Otherwise, they're identical.

ISDU is also part of iShares's collection of halal indices that includes ISDW (targeting the developed World) and ISDE (targeting Emerging markets). That's ISDU for US, ISDW for World and ISDE for Emerging. Smart naming convention! Unfortunately, it's all downhill from there.

Feast your eyes on this chart showing how ISDU has fared against the S&P500 (which it's supposed to be based on) over the past 15 years:

A 142.42% return may sound decent, but remember that this is over 15 years! The yearly return (or CAGR) is just 5.23% — compared to the S&P500's 7.47% over the exact same time period. Talk about underwhelming.

Also, the Top 10 holdings in this ETF represent a whopping 57.15% (!) of the fund — which is considered stupendously concentrated¹. The fact that it's domiciled in Ireland does make things better for foreign investors from a tax perspective, but that's little consolation for years of chronic under-performance.

🧐 A quick note on MSFT - the top holding in this, and many other funds. It's considered non-compliant by many Shariah screeners due to its revenue from gaming & advertising exceeding the acceptable threshold. Why the funds haven't updated their holdings to reflect this is beyond me.

ISDW / ISWD 🌍 – World Exposure (If You Hate Returns)

📖 Prospectus page

Key Facts:

• Expense Ratio: 0.50%
• CAGR since inception: 3.02%
• Top 10 concentration: 39.11%
• Launch date: December 2007

Now, it's time to look at ISDW. This is the 3rd of the ISD's and it targets the 'Developed world' — kind of like an ISDU, but across the globe.

Ouch! Just a 67.7% return over the full 15 years of its measly existence, vs 1,077.78% (!) for the S&P500 — which makes you wonder why on Earth anyone would consider investing in the ISD series of funds. You get high expense ratios, poor performance and low liquidity: 3 reasons NOT to!

Not much to say — at 39.11%, it isn't particularly horrible in diversification terms. But the performance is just horrible — stay far, far away!

ISDE 🏭 – The Money-Losing Machine

📖 Prospectus page

Key Facts:

• Expense Ratio: 0.85%
• CAGR since inception: -2.38%
• Top 10 concentration: 33.31%
• Launch date: December 2007

This fund was born along with its brothers, ISDU and ISDW, on 7 Dec, 2007. It focuses on 'Emerging Markets', the politically correct term for countries that are 'less developed'. This principally includes all of the countries that aren't US/Europe — that's mainly China, India, Brazil and the Middle East.

The largest companies in these regions tend to be commodity-based, so they rely on extracting and processing natural resources. This means they're more exposed to fluctuations in the price of whatever the underlying commodities are (e.g. gold, aluminum, copper, etc).

Brace yourselves as we observe the performance of this abomination since inception:

This is definitely the black sheep of the family — in the 15 years of its existence, it's actually lost money -- to the tune of -2.38%/year! 🫢

For reference, the market gained 7.66%/year during that same period!

What sane person would put any money in this ETF, especially with the insane 0.85% expense ratio?!

The Top 10 holdings represent 33.31% of the index … tisk, tisk! Bad performance and relatively poor diversification. I really am starting to wonder why iShares even bothers anymore.

What an abomination of an ETF! 🤮

UMMA 🌍 – The Underperformer

Key Facts:

• Expense Ratio: 0.51%
• CAGR since inception: -4.35%
• Top 10 concentration: 39.17%
• Launch date: January 2022

This ETF was also started by Wahed, the same company behind HLAL. Launched on January 6, 2022 this fund aims to provide halal exposure to global stocks — similar to ISDW.

Here's how it's performed since inception:

(Note: We've added ISDW on the chart to compare performance since they share similar goals)

Wow.

Somehow, it's managed to perform substantially worse than both the SPY and ISDW, and by quite a margin. The yearly return for UMMA is -4.35% vs 3.29% for SPY over the same time period.

The Top 10 is also above the average concentration for the SPY, coming in at 39.17%. All that concentration and still can't perform — not exactly a winning combination.

SPRE 🇺🇸 – The Real Estate Disaster

Key Facts:

• Expense Ratio: 0.59%
• CAGR since inception: -3.26%
• Top 10 concentration: 76.83%
• Launch date: December 2020

This ETF was started by Shariah Portfolio, the same company behind SPUS. Launched on December 29, 2020 this fund aims to provide halal exposure to the Real Estate sector. Here's how it's performed since inception:

Ouch! It's underperformed the S&P500 by a mile since it started — with a -3.26% yearly return to the market's 8.07% over this period.

It'll shock you to know that the Top 10 holdings in this bad boy represent a whopping 76.83% (!). With such a high concentration, you'd need a legitimate reason to invest in the fund (and pay up the 0.59% expense ratio) instead of just buying the holdings yourself:

But why bother buying the holdings at all?

For that miserable performance, you're better off stashing your money under your mattress and losing it to inflation instead. You'll still lose money, just slower.

Halal ETF Performance vs S&P 500 (Charts)

How do halal ETFs actually perform compared to the broader market? Let's examine the performance of our top-ranked funds against the S&P 500 index.

U.S. Halal ETFs vs S&P 500

Both SPUS and HLAL have notably outperformed the S&P 500 since their launch in 2019. SPUS has shown 11.65% annual returns vs. 9.55% for the S&P 500, while HLAL has returned 10.78% annually. I know, I was shocked too! Halal funds actually beating the market? What sorcery is this?

This outperformance can be attributed primarily to:

1. The exclusion of heavily-indebted companies (a Shariah requirement) — turns out avoiding debt-laden companies isn't such a bad investment strategy after all!
2. Overweighting in technology stocks, which performed exceptionally well during this period — when Big Tech wins, these funds win big
3. The absence of conventional banks, which faced challenges during recent market volatility — who knew avoiding interest-based businesses would actually help returns?

Global Halal ETFs vs S&P 500

Global halal ETFs show a different picture entirely, consistently underperforming the S&P 500. IGDA has been the strongest performer in this category (a polite way of saying "least terrible"), with 2.16% annual returns since inception, compared to the S&P 500's 2.67% over the same period.

This performance gap highlights the absolute dominance of U.S. markets (particularly tech stocks) in recent years, which has been a challenge for globally diversified portfolios regardless of their halal status. So if you're thinking global diversification, just know you're choosing underperformance for the sake of geographical variety. Worth it? You decide.

Legacy Halal ETFs vs S&P 500

The iShares suite of Islamic ETFs (ISDU, ISDW, and ISDE) have significantly underperformed the market over their longer history. Just look at that chart! It's like they're not even trying to keep up. Most concerning is ISDE (emerging markets), which has actually lost money over its 15+ year existence with a CAGR of -2.38%, compared to the S&P 500's 7.66% gains over the same period. If you had invested $10,000 in ISDE at launch, you'd now have... less than $10,000. Meanwhile, that same amount in an S&P 500 fund would have multiplied several times over. Ouch.

Country-Specific Access & Tax Notes

Accessing halal ETFs can be challenging depending on your location. Here's what investors need to know in different countries:

Canada

Canadian investors have multiple options for accessing halal ETFs:

• Local option: WSHR is listed directly on the Canadian NEO exchange — finally, something made just for Canadians!
• U.S. options: Most brokers (Wealthsimple, IBKR, Questrade) offer access to U.S.-listed ETFs like SPUS and HLAL
• Tax considerations: 15% withholding tax on dividends from U.S. companies; consider using TFSA accounts to shield from capital gains

The TFSA advantage is substantial here — you can at least keep all your halal investment gains tax-free, which helps offset those hefty expense ratios somewhat.

UK

UK investors face more restrictions but still have viable pathways:

• Local options: ISDU, ISDW, ISDE, and IGDA are all listed on the London Stock Exchange — though given their performance, that's hardly a blessing
• U.S. options: Some UK brokers (Interactive Brokers, Trading 212) provide access to U.S.-listed ETFs
• Currency impact: Be aware of currency conversion fees when purchasing USD-denominated securities — they'll eat into your returns almost as much as those expense ratios!
• Tax advantages: Irish-domiciled funds like ISDU offer favorable withholding tax treatment (15% vs 30%)

UK investors get to experience the "joy" of both currency risk AND high expense ratios. Lucky you!

India / GCC

Investors in India and Gulf Cooperation Council countries typically face the most restrictions:

• Limited direct access: Many local brokers don't offer international ETFs — it's like being locked out of a mediocre party
• Workarounds: Consider international brokers like Interactive Brokers or regional specialists
• Local alternatives: Some countries have local Shariah-compliant funds that may be easier to access
• Tax complexity: Consult with local tax professionals regarding international investment taxation — because the only thing more fun than high fees is complicated taxes!

For investors in any region facing difficulty accessing these ETFs, alternative approaches may be more practical.

Are Halal ETFs Worth It? Fees, Concentration & Alternatives

Let's be brutally honest about the state of halal ETFs in 2025:

The Problems

1. Absurdly High Fees - You're paying 5-25x more than conventional ETFs:

   • SPUS charges 0.49% ($490 annually per $100k invested)
   • ISDE charges 0.85% ($850 annually per $100k invested)
   • Compare this to just 0.03% for regular S&P 500 ETFs

2. Dangerous Concentration - Most halal ETFs have 40-70% of their holdings in just 10 stocks:

   • That's 2-3x more concentrated than the S&P 500
   • You're not getting the diversification you're paying for
   • You're stuck with whatever stocks the ETF provider decides are "compliant"

3. Limited Options - With just 10 halal ETFs globally (compared to 10,000+ conventional ETFs):

   • You have minimal choices for sector-specific investments
   • Geographic diversification options are restricted
   • No choices for different investment strategies or factors

Our Recommendation

For most investors, the best options are:

• SPUS for U.S. exposure (11.65% CAGR since inception)
• IGDA for global exposure (0.40% expense ratio, reasonable diversification)

But there's a better way:

The Better Way Forward

We've developed a modern solution that addresses all these problems, offering:

• Lower fees than any halal ETF
• Better diversification
• Full Shariah compliance
• Complete control over what stocks you own
• Superior returns potential

The math is simple: on a $100k portfolio, you're paying $490-850 per year (every year) in fees with these ETFs. That's money being taken directly from your returns, year after year.

Learn why halal ETFs are fundamentally flawed and discover the better alternative →

FAQ

Is the S&P 500 halal?

No, the S&P 500 index itself is not halal. It contains many companies that violate Islamic investment principles, including conventional banks (which deal with interest), alcohol producers, gambling companies, and businesses with excessive debt ratios. About as halal as a bacon sandwich, really. Halal ETFs like SPUS and HLAL apply Shariah screening filters to exclude non-compliant companies from the S&P 500, giving you a much smaller, significantly more concentrated, and considerably more expensive version of the index. Progress!

What's the difference between halal ETFs and mutual funds?

Halal ETFs trade on exchanges throughout the day like stocks, while Islamic mutual funds are priced once daily. ETFs typically have lower minimum investments and greater tax efficiency. In the U.S., there are very few Islamic mutual funds available to retail investors (count yourself lucky, maybe?), making ETFs the more accessible option for most Muslims. Both product types apply similar Shariah screening methodologies and charge similarly eye-watering fees.

How do ETFs screen for Shariah compliance?

Halal ETFs employ a two-step screening process:

1. Business Activity Screening: Excludes companies deriving significant revenue from prohibited activities (interest, alcohol, gambling, pork, weapons, adult entertainment, etc.) — goodbye to about half the S&P 500 right there
2. Financial Ratio Screening: Removes companies with:
   • Debt exceeding 33% of market capitalization — there goes another quarter
   • Interest-bearing securities exceeding 33% of assets
   • Accounts receivable exceeding 45% of total assets
   • Income from non-compliant activities exceeding 5% of revenue

Different funds may use slightly different thresholds, but these standards are broadly consistent across halal ETFs. By the time all these filters are applied, you're left with a much smaller universe dominated by tech companies and a few healthcare firms. Diversification? Who needs it!

Can I own S&P 500 ETFs as a Muslim?

Standard S&P 500 ETFs like SPY, VOO, or IVV are generally not considered Shariah-compliant because they include companies involved in prohibited activities and those with excessive financial leverage. Muslims seeking index-based investments should use specifically designed halal ETFs like SPUS or HLAL, which filter the S&P 500 for Shariah compliance. Yes, you'll pay 10-15x more in fees, but that's the price of compliance in today's market. At least until better alternatives come along...

Are halal ETFs less profitable than conventional ETFs?

Not necessarily. While halal ETFs have higher expense ratios (sometimes comically higher), their performance can sometimes outpace conventional counterparts. For example, SPUS and HLAL have outperformed the S&P 500 since their inception. Shariah screening tends to favor companies with lower debt and stronger balance sheets, which can be advantageous during economic downturns. However, they may underperform during periods when financial stocks rally significantly.

The real issue isn't performance — it's that you're paying premium prices for what should be basic investment products. Think of it like paying $15 for a bottle of water in the desert. Is it refreshing? Sure. Should it cost that much? Absolutely not.

References

Footnotes

1. For reference, the S&P500's Top 10 (which many complain about being too concentrated) represent just ~25% ↩