Are Shariah-compliant funds more expensive?
Often yes, and partly for real reasons - but a higher fee still has to be justified by what the fund delivers net of fees.
Screening against a standard, retaining scholars, issuing and auditing certificates and calculating purification all cost money. Most Australian Islamic funds are also small, so fixed costs are spread across fewer investors. And the ASX-listed Islamic funds InvestHAQ covers are actively managed, so passive-index pricing is not on offer among them - overseas, many Islamic ETFs are passive and track a Shariah-screened index.
Across the products InvestHAQ researches, total disclosed annual costs range from about 0.6% to just over 4%, as at 30 June 2026 - against roughly 0.1% to 0.5% for mainstream passive index ETFs.
A range is not a ranking, and cost is not the only variable. Weigh it against risk, benchmark, disclosure quality and net performance.
Factual and educational information only. Nothing on this page is financial product advice, a recommendation, or a Shariah ruling. Consider your circumstances and the product's disclosure documents, and seek licensed advice and qualified scholarly guidance before acting.