ETFs have become the world’s preferred investment rail with global ETF assets reaching a record $23.08 trillion at the end of May 2026, after pulling in $1.07 trillion of net inflows in just five months. Yet Shariah-compliant ETFs remain a tiny corner of that market.
Nukoud’s 2026 screening of the global Shariah ETF market identified 79 Islamic ETFs and ETPs holding about $60.5 billion. The real gap is in equities, where halal equity ETFs account for roughly $11.7 billion, or only 19% of Shariah ETF assets, even though stocks are the long-term growth engine of most portfolios.
The equity funds give Muslim investors cleaner access to U.S., global, emerging-market and GCC shares, without having to screen every company line by line.
Equity is the Portfolio Engine
The Shariah - Halal Universe counts 79 Shariah-compliant ETFs and ETPs with around $60.5 billion in assets across 16 domiciles and six asset classes. An ETF, or exchange-traded fund, is a listed fund traded like a share. An ETP, or exchange-traded product, is the broader category that can include ETFs and commodity products.
Equity funds are the largest category by product count, with around 55 funds, yet they hold only about $11.7 billion, or roughly 19% of assets. Commodities, mainly physical gold and precious-metal products, hold about $46.7 billion, or roughly 77%.
The Equity Leaders
AUM, or assets under management, matters because larger ETFs usually have better visibility, tighter trading and stronger institutional support. TER, or total expense ratio, is the annual fund cost.
What the Top Five Equity Funds Tell Us
The top five equity Shariah ETFs reveal where halal equity investing is gaining real scale with U.S. stocks, global developed markets and China access. SPUS leads the group as the flagship U.S.-listed Shariah equity ETF, while ISWD gives investors broad developed-market exposure through an Irish UCITS wrapper. Albilad CSOP MSCI Hong Kong China Equity ETF is the regional standout, showing demand from GCC investors for Shariah-compliant China exposure through Tadawul. Invesco’s Islamic global developed ETF adds another UCITS building block, while HLAL remains one of the best-known halal U.S. equity ETFs for retail investors.
What Each Fund Solves
U.S. Equity Access
SPUS and HLAL are the two major U.S.-listed halal equity ETFs. SPUS gives a Shariah-screened route into S&P 500-style exposure, while HLAL tracks the FTSE Shariah USA Index and includes large- and mid-cap U.S. companies.
For UAE and GCC investors, the appeal is liquidity and familiarity. The trade-off is wrapper complexity. U.S.-domiciled ETFs may expose non-U.S. investors to U.S. dividend withholding and U.S. estate-tax considerations.
Global Developed Equity Access
ISWD and Invesco’s Islamic global developed ETF are the cleaner “one-ticket” global options. Both sit in the UCITS universe. UCITS, or Undertakings for Collective Investment in Transferable Securities, is the European fund framework commonly used by international investors. ISWD has $1.44 billion in net assets and a 0.30% TER, while Invesco’s fund has $1.08 billion and a 0.40% TER.
Emerging Markets and China Access
ISDE/ISEM is the main broad emerging-market Shariah ETF, with $807.1 million in net assets. BlackRock lists the fund as physically replicated and benchmarked to the MSCI Emerging Markets Islamic Index.
The regional standout is Albilad CSOP MSCI Hong Kong China Equity ETF, listed on Tadawul. Its launch raised more than $1.2 billion, making it one of the largest Islamic equity ETF launches in the region and giving Saudi investors a Shariah-compliant route into Hong Kong-listed Chinese equities.
The GCC Investor Angle
For muslim investors in the region, the best ETF is not automatically the largest. The wrapper can change the outcome.
U.S.-listed ETFs offer deep market access, but the IRS states that estates of nonresident noncitizens must file Form 706-NA if U.S.-situated assets exceed $60,000 at death.
Irish UCITS ETFs may be more efficient for many non-U.S. investors. State Street notes that Irish-domiciled UCITS ETFs commonly face 15% U.S. withholding tax on dividends received from U.S. assets under the U.S.–Ireland treaty, while U.S.-domiciled ETF distributions to non-U.S. investors are generally subject to 30% withholding unless reduced by treaty.
Risk Dashboard
Shariah screens remove conventional banks and highly leveraged companies. That can make portfolios cleaner from a Shariah perspective, but it can also increase sector concentration in technology, healthcare, energy and industrials.
Risk Heatmap
Bottom Line
The top equity Shariah ETFs in 2026 are not just “halal versions” of mainstream funds. They are access points.
SPUS and HLAL give U.S. equity access. ISWD and Invesco offer global developed-market exposure. ISDE gives emerging-market breadth. Albilad’s 9410 gives Saudi investors China access through Tadawul. UAE-listed Shariah ETFs remain smaller, but they are important because they bring halal equity investing closer to local exchanges.
The next growth phase for Shariah ETFs will not be measured only by how many funds launch. It will be measured by whether Muslim investors can build complete portfolios: equities, sukuk, income, commodities, cash-like tools and regional exposure, all through transparent, liquid and Shariah-reviewed products.
Editor’s chart pack: donut chart, product-count bar chart, AUM ranking, global access map, wrapper decision tree, risk heatmap, and total-cost stack.
Disclosure: This article is for information only and does not constitute investment advice.
