Sharia-compliant investment options

What is Sharia-compliant investing?

Sharia-compliant investing is an approach that aims to grow investors’ money while fulfilling the principles of the Islamic faith and adhering to Sharia law. We offer a range of Sharia-compliant investments.

Types of Sharia-compliant investments

Sharia-compliant funds

Like any other fund, a Sharia fund is a pool of many investors’ money. It’s managed by a professional fund manager (for a fee) with the aim of growing investors’ money.

However, a Sharia-compliant fund is unique to most funds in that it will draw on the expertise of Islamic scholars and other experts to make sure the fund only invests in businesses which operate, in their view, within the principles of the Islamic faith.

This approach involves screening the fund to exclude certain industries. For example, the fund might avoid investing in:

What Sharia-compliant funds do we offer?

We’ve put together a list of all the Sharia funds available through HL. All of these investment options can be held in any HL account. So whether you’re saving for your retirement or something a little sooner, there’s bound to be an option to suit you.

Not sure where to invest? Compare our accounts here.

Some of these funds will aim to track the performance of a broader stock market index (known as ‘passive’ or ‘tracker’ funds) in a Sharia-compliant manner. Others will aim to outperform the stock market by investing in individual companies.

Investing in funds isn't right for everyone. Investors should only invest if the fund's objectives are aligned with their own, and there's a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a diversified portfolio.

You can view more about each Sharia-compliant fund, including their charges, risks, and key investor information, by using the links below.

The fund list is correct as of 16 November 2023. Sharia status independently confirmed by Morningstar.

What’s the difference between ‘income’ and ‘accumulation’?

The funds listed above are a mix of ‘income’ and ‘accumulation’ units. The type of unit you hold determines how any income generated from the fund is treated.

With income units, income is paid out to fund holders as cash. You can have the cash paid to you as a Sharia-compliant income, or reinvest it to buy additional units in the fund.

With accumulation units, income is retained within the fund and reinvested, increasing the price of the units. Generally, for investors who wish to reinvest income, accumulation units offer a more convenient and cost-effective way to do it.

Sharia exchange-traded funds (ETFs)

You can also invest in Sharia-compliant exchange-traded funds (ETFs).

An ETF is different to a fund because it trades on a recognised stock exchange, like a share. ETFs are designed to track the performance of a stock market index. For example, an investor looking to gain exposure to the UK might invest in an ETF which tracks the FTSE All-Share index).

Because they’re listed on the stock market, it means investors can buy and sell shares in the ETF at any time when the stock market is open. Unlike funds, you will pay a dealing charge to buy and sell an ETF.

Most ETFs invest in every company in a stock market index to replicate the performance of the index. Sharia-compliant ETFs are different because they filter out the companies within the index which are incompatible with the Islamic teachings and Sharia law.

Learn more about how ETFs work

What Sharia-compliant ETFs do we offer?

The fund list is correct as of 16 November 2023.

What about cash and interest?

Cash held in our investment accounts might attract interest, which could be incompatible with Sharia law.

If you’d rather not receive interest on any cash within your account, please contact us on 0117 900 9000 or send us an email.