How to invest in Shariah-compliant ETFs in Singapore

You can invest in Sharia-compliant ETFs in Singapore by opening a brokerage account, selecting halal ETFs listed locally or globally, and placing purchase orders.

These ETFs avoid non-halal sectors such as alcohol, gambling and conventional banking, offering an ethical way to grow your wealth.

This article covers:

• What makes an ETF Sharia compliant?
• How to invest in halal ETF Singapore?
• What are the best halal ETFs in Singapore?
• Do we have to pay tax on ETFs in Singapore?

Key Takeaways:

• Always check Sharia compliance before investing.
• Most halal ETFs for investors in Singapore are global; The options listed on the SGX are limited.
• ETFs are generally tax-efficient and suitable for long-term investments.

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The information in this article is intended as general guidance only. It does not constitute financial, legal or tax advice, and is not a recommendation or invitation to invest. Some facts may have changed since the time of writing.

Are there halal ETFs in Singapore?

Yes, there are halal ETFs available Singapore.

Sharia-compliant ETFs are designed to comply with Islamic investment principles and avoid companies involved in alcohol, gambling, conventional banking and other non-compliant sectors.

Several local and global ETFs listed on the Singapore Exchange (SGX) offer exposure to halal stocks while maintaining Sharia compliance.

Is buying Shariah-compliant ETFs a good investment in Singapore?

Buying Sharia-compliant ETFs can indeed be a good investment, especially if you value ethical, faith-based investing while seeking long-term growth.

For example the MSCI World Islamic Indexa common benchmark for sharia-compliant global equity ETFs has found:

• ~10% annualized return since inception (May 2002 – September 2025)
• ~12% annualized return over the past 5 years
• Annualized performance in recent years has been comparable to or even better than the conventional global equity benchmark: for example, +22.78% in 2023 versus +23.79% for the conventional index; –11.75% in 2022 versus –18.14%.

These figures show that a diversified Sharia-compliant stock index can, at least over a long enough time period, deliver growth comparable to that of conventional global stock indices.

Because these ETFs avoid non-halal sectors, they offer Muslims in Singapore a way to invest globally without compromising religious principles, while still seeking competitive returns.

But as with any equity-based investment, returns fluctuate and there is no guarantee of future performance.

How to Buy Shariah Compliant ETF in Singapore for Beginners

How can you check if an ETF is halal?

You check whether an ETF is halal by confirming that it meets Islamic screening standards and is supervised by Sharia law.

• View the ETF prospectus for Sharia certification or Islamic screening methodology
• Review compliance standards, such as business activity screens and financial ratio screens
• Check for approval from the Sharia Advisory Board or endorsements from recognized Islamic financial authorities

Are ETFs taxable in Singapore?

In Singapore, ETFs are generally not subject to capital gains tax, making them an attractive investment option.

Dividend distributions may be taxable depending on the ETF structure, but local and many regional ETFs offer tax-efficient options.

Always check the ETF prospectus or consult a financial advisor for specific tax implications for Singapore.

Are ETFs considered high-risk investments?

Singapore ETFs are not classified as risky by default. However, their risk level can increase based on what the ETF invests in.

Singapore-based investors typically face market risks as most ETFs track baskets of stocks, bonds or commodities. Stock ETFs carry moderate to higher risk, while bond ETFs generally carry lower risk.

Sharia-compliant ETFs can exclude highly volatile sectors such as conventional banking, gambling or alcohol, which can somewhat reduce exposure to certain risky sectors, but they still move with general market conditions.

Overall, ETFs in Singapore provide broad diversification, reducing risk per share, yet remain subject to price fluctuations, economic cycles and global market movements.

Are halal ETFs a good choice for retirement in Singapore?

Yes, halal ETFs can be a good choice for retirement in Singapore, especially for Muslim investors looking for long-term growth in line with Sharia principles.

Singapore residents can invest in global Shariah-compliant ETFs through brokers that support international ETF trading, helping them build a diversified and ethical retirement portfolio.

These ETFs offer broad market exposure, low fees and transparent Sharia screening, supporting stable long-term composition.

However, they cannot be bought with CPF funds, so pension investments must be made through cash or SRS accounts.

Conclusion

Investing in Sharia-compliant ETFs is becoming increasingly accessible in Singapore, offering Muslim investors a practical way to build long-term wealth while staying aligned with Islamic principles.

With global halal ETF options available through local brokers and digital platforms, you can diversify across markets without compromising on values.

As always, ensure the ETF remains Sharia compliant, understand the risks involved and choose products that fit your broader financial objectives.

Frequently asked questions

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