Halal ETFs from Kenya (2026): What Exists and How to Buy Them

A halal ETF is an exchange-traded fund that tracks an index built only from Shariah-screened companies, with a named scholar board and a published purification figure. No such fund is listed on the Nairobi Securities Exchange, so a Kenyan investor reaches them abroad through two doors: Ndovu Wealth Limited, a CMA-licensed fund manager whose Halaal fund starts at USD 50 and wraps the Wahed FTSE USA Shariah ETF, or a US-market broker such as Hisa, which charges a flat 1% per trade from USD 1 and settles through Alpaca Securities LLC. This guide names the funds we could verify on issuer pages, prices both routes, and covers KRA tax and purification. Start with the halal investing hub if ETFs are new to you.

Are ETFs halal? The screening test, in one paragraph

An ETF is a basket of shares that trades as one unit. It is halal when every holding passes a Shariah screen and the manager publishes how it handles the small slice of impermissible income that even screened companies carry. The screen has two parts. The business test removes banks, conventional insurers, brewers, betting firms, pork and adult content. The financial test removes companies whose interest-bearing debt, cash in interest accounts or interest income exceed thresholds set by the standard the fund follows. Standard Investment Bank's own explainer, published on sib.co.ke, describes exactly this two-step method for its Kenyan equity work, and the same logic governs a foreign ETF.

The practical consequence, set out for single shares on the halal stocks hub, is that a plain S&P 500 or MSCI World tracker is not halal, because it holds banks and companies carrying heavy interest-bearing debt. What a Muslim investor wants is a fund whose name includes Islamic, Shariah or Halal and whose factsheet names the index and the scholar board. If a fund page cannot show both, treat it as unscreened. Our page on who certifies halal investments in Kenya explains why the certifier matters as much as the label.

Which halal ETFs exist, as published by the issuers

We name only funds whose issuer or index-provider page we could read on 3 October 2026. BlackRock's iShares site lists the iShares MSCI USA Islamic UCITS ETF (ticker ISUS), described as direct investment in US companies that comply with Shariah investment principles, tracking the MSCI USA Islamic index and distributing income quarterly. It is a UCITS fund, which means it is listed on European exchanges rather than in New York; a US-only broker will not carry it. The Wahed FTSE USA Shariah ETF (HLAL) is the US-listed fund that sits inside Ndovu's Halaal fund according to our Ndovu profile; Wahed's own ETF site returned a server error when we fetched it, so the expense ratio and board names are not quoted here. Other issuers run S&P 500 Shariah-screened funds; read their pages for the index name, the board and the annual purification ratio before buying.

• iShares MSCI USA Islamic UCITS ETF (ISUS): US large and mid caps, MSCI Islamic screen, quarterly distributions, European listing, verified on ishares.com.
• Wahed FTSE USA Shariah ETF (HLAL): US-listed, FTSE Shariah screen, the holding inside Ndovu's Halaal fund per our profile; issuer page not reachable on the day.
• Global and emerging-market Islamic ETFs: several exist under the iShares and other brands; verify each on the issuer site rather than on a broker's search result.
• Any ETF without Islamic, Shariah or Halal in its name and a named scholar board should be assumed non-compliant until proven otherwise.

Door one: Ndovu's Halaal fund from USD 50

Ndovu Wealth Limited is licensed by the Capital Markets Authority as a fund manager and investment adviser, and its security page says client assets sit with a regulated custodian separate from the company. Its ETF menu, fetched from ndovu.co, lists a fund called Halaal under the equity, high-risk, USD category with a minimum of USD 50. The underlying is the Wahed FTSE USA Shariah ETF, which carries the published Shariah certification that no other Kenyan fund can show; our Ndovu Halaal fund guide covers the structure in detail and the Ndovu provider profile carries our verdict.

Pricing is where Ndovu needs reading twice. The fee structure page lists no charge for deposits, no charge for disinvestment, and no annual charge on money market funds, but an investment fee on global funds charged on the amount invested at the moment you invest: 4.5% on the free Basic plan, 4.0% on the Standard plan (KES 3,000 a year) and 2.0% on the Ultimate plan (KES 30,000 a year). USD bank-transfer withdrawals cost USD 9; other withdrawals are free. The pricing page also lists KES 5,000 as the minimum investment in its comparison table and 0.05% to 0.25% as the underlying portfolio cost, which is the ETF's own expense ratio passed through.

Worked out, a Basic-plan investor putting KES 10,000 a month into the Halaal fund pays KES 450 up front each month, so KES 9,550 is invested. Over a year that is KES 5,400 in entry fees on KES 120,000 contributed. The Ultimate plan halves the entry fee to 2.0% but costs KES 30,000 a year, which only makes sense above roughly KES 1.2 million of annual contributions, where the 2.5 percentage-point saving exceeds the subscription. Ndovu is the right door for a reader who wants a certified fund, M-PESA deposits and no foreign paperwork, and who accepts an entry fee instead of a trading commission.

Door two: buying the ETF directly through Hisa

Hisa is a mobile and web trading app with a Nairobi office at The Exchange, Westlands Road. Its FAQ, fetched from hisa.co, states a flat 1% fee on all trades across all markets and asset types, a USD 1 minimum for both global and local shares, and fractional shares where the market allows. US securities are provided through Alpaca Securities LLC, a FINRA-registered broker-dealer and SIPC member, so the shares sit in a US custody account with SIPC protection against broker failure (not against market losses). Kenyan equities trade through RiseVest East Africa Limited via Faida Investment Bank, which is CMA-licensed. Withdrawals go to mobile money or bank and the FAQ says they are processed within 24 hours.

Three Hisa features must be switched off or ignored by a Muslim user. The home page advertises wallet interest on idle USD holdings, vaults that lock cash for passive growth, and crypto and commodities trading. Interest on a cash balance is riba; leave the USD wallet uninvested only briefly and decline any interest feature in settings. The 1% fee applies on purchase and again on sale, so a KES 10,000 monthly buy costs KES 100 going in and KES 100 coming out years later, far below Ndovu's 4.5%, but you must do the fund selection yourself and the US listing limits you to US-domiciled funds such as HLAL rather than UCITS funds such as ISUS. Hisa does not publish a Shariah filter, so the responsibility for picking a screened fund is entirely yours.

Door three: an international broker and a dollar account

A reader who wants European-listed UCITS Islamic ETFs, or who already holds a dollar account at a Kenyan bank, can open an account with a foreign broker that serves Kenyan residents and wire USD from a local dollar account. We did not fetch any foreign broker's page for this guide, so we state no commissions. What we can say is that this route adds a bank wire fee on each funding leg, a currency conversion at the bank's selling rate, and the broker's own custody terms, and that the Central Bank of Kenya publishes indicative exchange rates on centralbank.go.ke that let you check how far your bank's rate sits from the market. Our diaspora investing guide covers the reverse flow for Kenyans earning abroad.

The three routes compared

The last row is a reminder that a Kenyan investor does not have to go abroad to be halal. SIB Najah's Mansa-X Shariah Special Fund and the local Shariah money market funds are covered in the halal investing guide; the ETF route adds US equity exposure and dollar diversification, not Shariah certainty.

KRA tax on foreign ETF dividends and gains

Two KRA pages are relevant. The capital gains tax page states that CGT is charged at 15% as a final tax on the net gain, calculated as transfer value less incidental costs less adjusted cost, declared and paid by the transferor through iTax. The page frames the charge around property situated in Kenya and shares in foreign entities that derive more than 20% of their value from Kenyan immovable property, so how it applies to a gain on a US-listed ETF held by a Kenyan resident is a question for a tax adviser or a KRA enquiry rather than something this page can settle. The withholding tax page lists dividends at 5% for a resident qualifying dividend and treats withholding on qualifying dividends as a final tax for residents, but that table governs Kenyan payers; a US fund will apply US withholding at source according to the W-8BEN form your broker files.

In practice: keep every contract note and dividend statement, ask the broker for an annual tax summary, and declare foreign investment income in your iTax return on the basis your adviser confirms. Do not assume the US withholding settles your Kenyan position. Ndovu's statements are in KES and USD and simplify this; a direct brokerage account puts the record-keeping on you.

Purification: what to do with the impermissible slice

Every screened index still holds companies with some interest income below the threshold, so Islamic ETF issuers publish a purification ratio, usually a small percentage of the dividend, that the investor should give away. The method is simple. Multiply the dividends you received in the year by the issuer's published ratio and give that amount to a charitable cause without intending reward, since it is not your money to keep. If the issuer publishes KES-neutral figures per share instead, multiply by the shares you hold. Where no ratio is published, a conservative approach used by Kenyan scholars is to take the fund's reported share of non-compliant income from the annual report and apply it to your dividends.

• Download the fund's annual purification report or factsheet and note the ratio for the year.
• Add up gross dividends received from that fund in the same year, from your broker or Ndovu statements.
• Multiply the two figures; on KES 20,000 of dividends and a 2% ratio the purification amount is KES 400.
• Give the amount to a cause that serves the poor, keeping a note of the date and recipient for your own records.
• Repeat each year, and apply the same ratio to a realised capital gain if the fund's board asks for that, which some do.

Zakat on ETF holdings

ETF units held for growth are zakatable at 2.5% of their market value on your zakat date, converted to shillings at that day's rate, once your total zakatable wealth passes nisab. Some scholars allow a lower base for long-term holdings by using only the fund's zakatable asset share; the simpler and safer method for a retail holder is full market value. Our zakat on investments guide walks through the calculation with Kenyan examples, and the zakat hub has the nisab figure.

The decision

A reader saving KES 10,000 a month who wants certified halal US equities and no foreign forms should use Ndovu's Halaal fund on the Basic plan, accept the 4.5% entry fee as the price of simplicity, and review the Ultimate plan only once annual contributions pass about KES 1.2 million. A reader with a USD lump sum, comfortable reading an issuer factsheet and filing a W-8BEN, should open Hisa, decline the wallet interest and vault features, and buy a US-listed halal ETF at 1% each way, which is the cheapest route by a wide margin. A reader who wants European UCITS Islamic funds needs a foreign broker and a dollar account, and should price the wire and FX legs before deciding. Nobody should buy an ETF that lacks Islamic, Shariah or Halal in its name and a published board. Facts checked against ndovu.co, hisa.co, ishares.com, sib.co.ke, kra.go.ke, centralbank.go.ke on 3 October 2026.

Frequently asked questions

Is the S&P 500 halal?

No, a plain S&P 500 tracker is not halal because the index holds banks, insurers and companies with heavy interest-bearing debt. Shariah-screened versions of the index exist from several issuers; they remove the non-compliant names and publish a purification ratio. Check the issuer's own page for the index name and the scholar board before treating any S&P 500 product as compliant.

Can I buy halal ETFs with M-PESA?

Yes, through Ndovu, which accepts mobile money deposits and lists its Halaal fund from USD 50 with no deposit charge. Hisa also funds its KES wallet from mobile money and converts to USD for US trades at a 1% trade fee. In both cases the money is converted to dollars before the ETF is bought, so the exchange rate on the day matters.

Does Hisa have a halal filter?

No. Hisa's site describes stock screeners and an AI assistant but no Shariah screen, and it offers interest on idle USD balances, vaults, crypto and commodities. A Muslim user should pick a screened ETF by name, decline the interest and vault features, and avoid margin or derivative products on the platform.

How much tax do I pay on a halal ETF in Kenya?

KRA's pages state 15% capital gains tax as a final tax on net gains and 5% withholding on a resident qualifying dividend, but both tables are written for Kenyan property and Kenyan payers. For a US-listed fund the broker applies US withholding first. Confirm your Kenyan declaration with a tax adviser and keep every statement; do not rely on the US deduction alone.

Is Ndovu's Halaal fund cheaper than buying the ETF myself?

Usually not. Ndovu charges 4.5% on each deposit into global funds on its free plan, against Hisa's 1% per trade. Ndovu wins on simplicity, KES reporting and a certified fund chosen for you. Hisa wins on cost but puts fund selection, US tax forms and the discipline to avoid its interest features on you.

What is dividend purification on an ETF?

Purification is giving away the share of your dividends that came from impermissible income inside the fund's holdings. Islamic ETF issuers publish the ratio each year; you multiply it by the dividends you received and donate the result without intending reward. On KES 20,000 of dividends and a 2% ratio that is KES 400.