Is XEQT Halal? Halal ETFs for Canadians in 2026

Last updated: October 26, 2026

tldr; No, XEQT isn't halal. It owns about 8,000 stocks through five iShares index funds, and that includes every big Canadian bank, insurers, and companies with more debt than Shariah rules allow.¹ VEQT and VFV fail for the same reason. If you're Canadian, the halal swap is WSHR (the only Shariah ETF listed in Canada) or a US-listed fund like SPUS, MNZL or HLAL. The account matters too: US-listed funds pay no US withholding tax in an RRSP, but they do in a TFSA or FHSA.²

Is XEQT halal?

No. XEQT (iShares Core Equity ETF Portfolio) is a fund that buys other funds. It holds five broad iShares index ETFs with no Shariah screen at all, so you end up owning the whole market, banks and all.¹

Here's what was inside it on its September 30, 2026 factsheet:¹

That adds up to about 8,275 companies.¹ AAOIFI Shariah Standard No. 21 (the standard most halal screens follow) lets you own a stock only if three things are true: the company's main business is permissible, its interest-bearing debt is under 30% of its market value, and less than 5% of its revenue comes from impermissible sources.⁵ An index fund doesn't check any of that. So XEQT holds:

• Banks and insurers. Their main business is interest, so they fail the business test straight away.
• Alcohol, gambling, tobacco and adult-entertainment companies, which show up in every broad index.
• Companies with too much debt. Utilities, pipelines and telecoms often fail here.

Why the Canadian part of XEQT is the worst part

Canada's main index is unusually full of banks. Financials were about 33.7% of XIC in October 2026. For the S&P 500 it's about 11%.³ All five big Canadian banks fail our screen, which is done to AAOIFI standards. Here they are, next to two other TSX favourites:

Put a dollar into XEQT and roughly 8 cents of it lands in Canadian financials, before you even count the banks in its US and international funds.

Can you buy XEQT and purify the returns?

Not under AAOIFI standards. Purification (giving away the small impermissible part of your income) is for companies that already pass screening but earn a little interest on the side, like a tech company with cash in the bank. It doesn't make it okay to own a bank whose main business is lending at interest.⁵ XEQT's problem is what it owns, and giving a percentage of your dividends to charity won't change what it owns.

Is VEQT halal?

No. VEQT (Vanguard All-Equity ETF Portfolio) is built the same way as XEQT, just with more Canada in it. On September 30, 2026 it held VUN (US total market, ~46%), VCN (Canada all-cap, ~30%), VIU (developed markets outside North America, ~18%) and VEE (emerging markets, ~7%).⁶ VCN is about a third financials, same as XIC, so you get even more bank exposure with VEQT than with XEQT. The management fee is 0.17%.⁶

Is VFV halal?

No. VFV (Vanguard S&P 500 Index ETF) is basically the US-listed Vanguard S&P 500 ETF (VOO) packaged in Canadian dollars.⁷ It owns all ~500 companies in the S&P 500, JPMorgan, Bank of America, Wells Fargo, insurers and alcohol makers included. Financials were 11.4% of the fund in September 2026.⁷ We explain why the index fails in Is the S&P 500 halal?, and our VOO fund page shows which holdings fail screening.

Want the halal version of VFV? That's SPUS, which tracks a Shariah-screened S&P 500 index.⁸

Other Canadian all-in-one and dividend ETFs

Same answer for the rest of the one-ticket portfolios:

• ZEQT, XGRO, VGRO, XBAL, VBAL: broad index portfolios, no Shariah screen. The growth and balanced ones also hold regular bonds, which pay interest, so that's a second problem on top of the first.
• VDY, XEI and other Canadian dividend ETFs: they chase the highest-yielding Canadian stocks, which means the Big Five banks, insurers, pipelines and telecoms. Few ETFs in Canada are further from halal.
• XIU, XIC, ZCN, VCN: plain Canadian index funds, with the full one-third in financials.

Halal ETFs Canadians can buy

You've got one Shariah ETF listed in Canada, plus a handful of US-listed ones you can buy at any Canadian broker that gives you access to US markets. This lines up with the Canada section of our full halal ETF comparison, where each one gets a full review.

WSHR: the only Canadian-listed halal ETF

WSHR (Wealthsimple Shariah World Equity Index ETF) has traded on Cboe Canada (which used to be called the NEO exchange) since May 2021.⁴ It follows the Dow Jones Islamic Market Developed Markets Quality and Low Volatility Index. Ratings Intelligence Partners certifies both the fund and the index.⁴ The management fee is 0.50%, and the MER (the total yearly cost) was 0.56% for the year to March 31, 2026.⁴

You buy it in Canadian dollars, so there's no currency conversion. That's the main plus. The main minus is returns, because its low-volatility tilt keeps it out of the big tech names that drove US gains. It's also the most spread-out halal equity ETF we track, with only 9.3% of the fund in its top 10 holdings.

WSHR vs SPUS

Over five years, WSHR's price has grown 4.92% a year in CAD, and SPUS's has grown 13.81% a year in USD. Neither number includes distributions, and they're in different currencies, so it's a rough comparison. Most of the gap comes down to what they own. SPUS is heavy in big US tech companies, while WSHR spreads its money across developed markets and picks steadier companies.

Pick WSHR if you want one CAD fund with no currency conversion and lots of diversification. Pick SPUS, MNZL or HLAL if you want US growth and can hold US dollars cheaply, ideally in an RRSP.

What about the Wealthsimple Halal portfolio?

Wealthsimple's managed Halal portfolio holds WSHR, a physical-gold ETF and cash that earns no interest, mixed according to your risk level.¹⁰ No bonds, and no sukuk (Islamic bonds) either.¹⁰ You pay Wealthsimple's managed-account fee (0.5% a year on the Core tier) on top of the fund MERs.¹¹ If you're happy buying WSHR yourself in a self-directed account, you get the same stocks without that fee. Wealthsimple's help centre still describes the Halal portfolio, but check the app to make sure you can still pick it before you count on it.

Want gold in the mix? Our guide to gold and precious metals covers what a gold ETF needs to be halal.

How to hold halal ETFs in a TFSA, RRSP or FHSA

Is a TFSA halal?

Yes, the account itself is fine. All a TFSA does is shield your investment growth from Canadian tax, and it doesn't lend money or pay you interest on its own. Whether yours is halal comes down to two things:

1. What you hold in it. Halal ETFs or screened stocks are fine. XEQT, GICs and bond funds are not.
2. Interest on cash you haven't invested. Some brokers pay interest on cash sitting in your account. Keep that cash low, and give any interest you get to charity instead of keeping it.

Same goes for an RRSP or FHSA. Saving tax, or putting it off until later, isn't riba (interest). For 2026, the TFSA limit is $7,000. The FHSA limit is $8,000 a year, up to $40,000 over your lifetime. The RRSP limit is 18% of last year's earned income, up to $33,810.¹²

US withholding tax: TFSA vs RRSP vs FHSA

When a US company pays a dividend to a Canadian, the US keeps some of it as tax. The Canada-US tax treaty cuts that to 15% (Article X). It drops it to zero for accounts that exist to pay retirement income, like an RRSP or RRIF (Article XXI).² A TFSA or FHSA doesn't count as a retirement account, so the 15% still applies there. And the CRA won't give you a foreign tax credit for tax taken inside a TFSA or RRSP, so anything withheld in a registered account is gone for good.¹³

How much does this cost you? Less than it sounds. You lose 15% of the dividend, not 15% of your money. On a fund that pays 1% a year in dividends, you lose about 0.15% a year. US-listed halal ETFs lean toward tech and pay small dividends, so currency conversion fees often cost you more.

One more thing. Your broker needs a Form W-8BEN on file to use the 15% treaty rate. Without it, the US takes 30%. Canadian brokers usually have you fill it in when you open the account, but check yours is on file before you buy US-listed funds.¹⁴

Which halal ETF goes in which account

• RRSP: US-listed SPUS, MNZL or HLAL. The treaty means no US withholding, and you can hold US dollars in the account so you only convert once.
• TFSA and FHSA: WSHR is the easy pick. No currency conversion, and since a TFSA loses foreign dividend tax either way, US-listed funds have no tax edge here. Already holding US dollars cheaply? US-listed funds are still fine. You just give up the 15% on dividends.
• Non-registered: either works. If the total cost of your foreign investments, US-listed ETFs included, goes over C$100,000 at any point in the year, you have to file Form T1135.¹⁵ WSHR is a Canadian fund, so it doesn't count toward that.

US-listed ETFs can also count toward US estate tax when you die, because they're US assets. The treaty gives Canadians a prorated credit that covers most estates. If yours is large, talk to a cross-border adviser.¹⁶

Buying halal ETFs on Wealthsimple

1. Open a self-directed TFSA, RRSP or FHSA (not a managed account).
2. For WSHR, put CAD in the account, search the ticker and buy. Stocks and ETFs have $0 commission.¹¹
3. For SPUS, MNZL or HLAL, decide how you'll pay. Without USD accounts, every US trade gets converted at a 1.5% fee. With USD accounts ($10 a month on Core), you convert once and later US trades have no conversion fee. Conversions under $10,000 still cost 1.5%, and the fee goes down on bigger amounts.¹⁷
4. Set up recurring buys if you invest every month.

Buying halal ETFs on Questrade

1. Open a self-directed TFSA, RRSP or FHSA. Questrade charges $0 commission on Canadian and US-listed stocks and ETFs.¹⁸
2. Questrade's registered accounts can hold both CAD and USD, so you can keep US dividends in USD and skip converting back and forth.¹⁸
3. Questrade charges a fee to convert CAD to USD. A lot of Canadians cut it with Norbert's Gambit: buy DLR in CAD, have Questrade journal it to DLR.U, then sell in USD. Heads up, though: DLR holds US dollar deposits that earn interest, so some Muslims won't own it even for a day or two.

Halal dividend stocks in Canada

Banks, insurers, pipelines, telecoms, utilities. That's the classic Canadian dividend portfolio, and almost none of it passes. The banks fail on what they do, and pipelines and telecoms usually fail on debt. A few big Canadian companies do pass our screen (done to AAOIFI standards). The tickers below are their US listings, which have the same status as the TSX shares:

A status can change when a company reports new numbers, so check the stock page before you buy. Also, dividends from Canadian companies have no US withholding tax, even if you buy the US listing. In a non-registered account they also get the Canadian dividend tax credit. For US companies, see our top halal dividend stocks. And whatever you end up holding, don't forget zakat on your stocks.

Can Canadians use Amal Invest?

Not yet, sorry.

The halal ETFs above are concentrated, and they cost two to three times XEQT's 0.19% MER. More on that in the problem with halal ETFs. Amal Invest gets around this with Shariah-certified, filtered versions of popular funds. It takes a fund like VOO, removes the holdings that fail a screen done to AAOIFI standards, and you hold what's left in your own brokerage account. Holdings are re-screened twice a month, and stocks that stop passing are removed automatically.

We place trades through Alpaca and Trading 212, and neither of them opens accounts for people living in Canada right now. So we can't offer Amal in Canada today. Join the waitlist and we'll email you if that changes. Until then, WSHR, SPUS, MNZL and HLAL are what you can use.

FAQ

Is XEQT Shariah compliant?

No. XEQT owns about 8,000 companies through index ETFs that aren't screened, banks, insurers and heavily indebted companies included. It doesn't meet AAOIFI standards, and purifying your dividends doesn't fix that.

Is XEQT haram?

Most scholars who follow AAOIFI-style screening would say holding XEQT isn't permissible, because a big part of the fund is in businesses built on interest. If you already own it, the usual advice is to sell, move the money into a halal fund, and give any gains you consider impermissible to charity. Ask a scholar you trust about your own situation.

Is a TFSA haram?

No. A TFSA is a tax-sheltered account, and it isn't a loan or a deposit. It's halal as long as you hold halal investments in it and avoid (or give away) any interest paid on idle cash. RRSPs and FHSAs work the same way.

Is VDY halal?

No. VDY (Vanguard FTSE Canadian High Dividend Yield Index ETF) goes after the highest-yielding Canadian stocks, and its biggest holdings are the big Canadian banks. Few Canadian ETFs are less compliant.

What is the best halal ETF in Canada?

If you want a fund listed in Canada, WSHR is the only option, and it's a reasonable core holding, especially in a TFSA or FHSA. For US growth in an RRSP, SPUS has the longest strong track record, and MNZL is the cheapest at 0.40%. You can compare them in our halal ETF rankings.

Is there a halal version of XEQT?

There's no halal all-in-one ETF in Canada. The closest you can get is WSHR for developed markets around the world, plus SPUS or MNZL if you want more US. Neither covers emerging markets the way XEC does, and there's no Canadian-listed sukuk ETF to stand in for the bond part of XGRO or XBAL.

Is Amal Invest available in Canada?

No. Amal works through Alpaca and Trading 212, and neither takes Canadian residents right now. You can join the Canada waitlist above.

References

Footnotes

1. BlackRock Canada, iShares Core Equity ETF Portfolio (XEQT) fact sheet, September 30, 2026: five underlying ETFs, 8,275 underlying holdings, 0.17% management fee, 0.19% MER. Product page · Fact sheet ↩ ↩² ↩³ ↩⁴

2. Canada–United States Tax Convention, Article X(2)(b) (15% rate on portfolio dividends) and Article XXI(2) (exemption for dividends and interest received by trusts operated exclusively to provide pension or retirement benefits). Justice Laws Website · Department of Finance consolidated text ↩ ↩² ↩³

3. Sector weights of the iShares Core S&P/TSX Capped Composite Index ETF (XIC), October 7, 2026: financials 33.71%. S&P 500 financials 11.4% per the VFV factsheet (note 6). iShares XIC · S&P/TSX Composite ↩ ↩²

4. Wealthsimple Shariah World Equity Index ETF (WSHR): index, Shariah certification by Ratings Intelligence Partners and 0.5% management fee. Wealthsimple · Listing date May 12, 2021: Cboe Canada · MER 0.56% for the year ended March 31, 2026: Annual MRFP ↩ ↩² ↩³ ↩⁴ ↩⁵

5. AAOIFI Shariah Standard No. 21, Financial Paper (Shares and Bonds): business-activity screen, 30% limits on interest-bearing debt and deposits, 5% limit on impermissible income, and purification of incidental impermissible income. Source ↩ ↩²

6. Vanguard Canada, Vanguard All-Equity ETF Portfolio (VEQT): holdings at September 30, 2026, and management fee reduced to 0.17% effective November 18, 2025. Fact sheet ↩ ↩²

7. Vanguard Canada, Vanguard S&P 500 Index ETF (VFV) fact sheet, September 30, 2026: invests primarily in the US-domiciled Vanguard S&P 500 ETF; financials 11.4%. Fact sheet ↩ ↩²

8. SP Funds lists SPUS's expense ratio as 0.45% and states that it tracks the S&P 500 Shariah Industry Exclusions Index. Source ↩ ↩²

9. MNZL statutory prospectus: 0.40% expense ratio; tracks the Russell IdealRatings Manzil Halal USA Broad Market Custom Index. Source ↩

10. Wealthsimple Help Centre, Understanding halal investing: the Halal portfolio holds WSHR, a physical-gold ETF and non-interest-bearing cash; no bonds or sukuk. Source ↩ ↩²

11. Wealthsimple pricing: $0 commission on self-directed trades; 0.5% management fee on managed accounts at the Core tier; USD accounts $10 a month on Core. Source ↩ ↩²

12. Canada Revenue Agency: RRSP and TFSA dollar limits · FHSA participation room ↩

13. Canada Revenue Agency, Income Tax Folio S5-F2-C1, Foreign Tax Credit, paragraph 1.69: foreign taxes paid on income earned in a TFSA or RRSP are not counted for the foreign tax credit. Source ↩

14. IRS, About Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals). Source ↩

15. Canada Revenue Agency, Form T1135, Foreign Income Verification Statement: required when the total cost of specified foreign property is more than C$100,000 at any time in the year. Investments held in registered plans such as an RRSP or TFSA, and units of Canadian-resident funds such as WSHR, are not specified foreign property. Foreign Income Verification Statement · Questions and answers about Form T1135 ↩

16. IRS, Frequently asked questions on estate taxes for nonresidents not citizens of the United States: US marketable securities are US-situated, and a return is required above US$60,000 of US-situated assets. Source ↩

17. Wealthsimple Help Centre, Upgrade to USD accounts: TFSA, FHSA and RRSP are eligible; conversion fee 1.5% under $10,000, 1% to $24,999.99, 0.5% to $99,999.99, 0% at $100,000 and over. Source ↩

18. Questrade pricing: $0 commission on Canadian and US-listed stocks and ETFs; registered accounts can hold CAD and USD. Pricing · Currency settlement in registered accounts ↩ ↩²