How to Invest in Shariah-Compliant ETFs While Living in Singapore

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

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

This article covers:

• What makes an ETF Shariah 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 verify Shariah compliance before investing.
• Most halal ETFs for Singapore investors are global; SGX-listed options are limited.
• ETFs are generally tax-efficient and suitable for long-term investing.

My contact details are hello@adamfayed.com and WhatsApp ‪+44-7393-450-837 if you have any questions.

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

Are there any halal ETFs in Singapore?

Yes, there are halal ETFs available in Singapore.

Shariah-compliant ETFs are designed to meet Islamic investment principles, avoiding businesses involved in alcohol, gambling, conventional banking, and other non-compliant sectors.

Several local and global ETFs listed on the Singapore Exchange (SGX) provide exposure to halal equities while maintaining Shariah compliance.

Is buying Shariah compliant ETFs a good investment in Singapore?

Buying Shariah‑compliant ETFs can indeed be a good investment especially if you value ethical, faith‑aligned investing while still seeking long‑term growth.

For example, the MSCI World Islamic Index, a common benchmark for Shariah‑compliant global equity ETFs,  has delivered:

• ~ 10% annualized return since inception (May 2002 – Sep 2025)
• ~ 12% annualized return over the past 5 years
• Year‑by‑year performance that in several recent years matched or even outperformed the conventional global equity benchmark: e.g. +22.78% in 2023 vs +23.79% for the conventional index; –11.75% in 2022 vs –18.14%.

These numbers show that, at least over a long enough horizon, a diversified Shariah‑compliant equity index can offer growth comparable to conventional global equity indexes.

Because these ETFs avoid non‑halal sectors, they provide Muslims in Singapore a way to invest globally without compromising religious principles, while still aiming for competitive returns.

However, as with any equity‑based investment, returns fluctuate, and there’s no guarantee of future performance.

How to buy Shariah compliant ETF in Singapore for beginners

How to check if an ETF is halal

You check if an ETF is halal by confirming it meets Islamic screening standards and has Shariah oversight.

• Review the ETF prospectus for Shariah certification or Islamic screening methodology
• Verify compliance standards, such as business activity screens and financial ratio screens
• Check for Shariah advisory board approval or endorsements from recognized Islamic finance 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 taxed 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 Singapore tax implications.

Are ETFs considered high risk investments?

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

Singapore-based investors typically face market risk, since most ETFs track baskets of equities, bonds, or commodities. Equity ETFs carry moderate to higher risk, while bond ETFs are generally lower risk.

Shariah-compliant ETFs may exclude highly volatile sectors such as conventional banking, gambling, or alcohol, which can slightly reduce exposure to certain risky industries, but they still move with overall market conditions.

Overall, ETFs in Singapore offer broad diversification, which lowers single-stock risk, yet they 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, particularly for Muslim investors seeking long-term growth aligned with Shariah principles.

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

These ETFs provide broad market exposure, low fees, and transparent Shariah screening, supporting steady long-term compounding.

However, they cannot be purchased using CPF funds, so retirement investing must be done via cash or SRS accounts.

Conclusion

Investing in Shariah-compliant ETFs in Singapore is increasingly accessible, 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 brokerages and digital platforms, you can diversify across markets without compromising on values.

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

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