A halal investment portfolio in the UAE is built from four sleeves: Shariah-screened global equities, usually through an Islamic ETF costing about 0.30% a year; sukuk, where the federal government now sells Retail T-Sukuk from AED 1,000 and fractional T-Sukuk from AED 4,000; gold; and halal cash in a Mudarabah or Wakala deposit or an Islamic money market fund. The weights depend on your horizon, not your faith: a ten-year saver can hold 75% in screened equities, while money needed within five years belongs mostly in sukuk and cash. What makes the portfolio halal is the screen applied to every holding (AAOIFI's 30% debt and 5% impermissible income limits, or an index provider's equivalent), the absence of interest-bearing bonds and conventional deposits, and two annual chores most investors skip: purifying the small impermissible income that screened companies still earn, and paying zakat on the lot. This guide builds the portfolio sleeve by sleeve with the UAE products that exist in 2026, their real costs, and three allocations you can copy.
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Start with the screen, because it defines the universe
Every halal portfolio rests on thresholds that decide which companies are investable. The most widely referenced is AAOIFI's Shariah Standard No. 21, which permits investing in a company whose primary activity is lawful provided interest-bearing borrowing does not exceed 30% of market capitalisation, interest-taking deposits do not exceed 30% of market capitalisation, and income from prohibited sources does not exceed 5% of total income, measured from the latest audited accounts. The standard's text also sets the purification rule: whoever holds the share at the end of the financial period must give away the prohibited income attributable to it, calculated per share, and may not use that money for any benefit.
Index providers run their own versions, and they moved in 2026. The S&P Shariah Indices Methodology records a change effective after the close on 18 September 2026 that sets the leverage screen at debt below 30% of the 36-month average market value of equity and the cash screen at cash plus interest-bearing securities below 30% of the same denominator, tightened from 33%. Non-permissible income must stay below 5%. A stock that breaches a limit by less than two points stays compliant for up to three reviews, which is why an Islamic ETF's holdings change gradually. Our AAOIFI screening guide compares the methodologies; the practical consequence is that any fund or app you use should name which standard it follows.
| Screen | AAOIFI Shariah Standard 21 | S&P Shariah Indices (from 18 September 2026) |
|---|---|---|
| Interest-bearing debt | Below 30% of market capitalisation | Below 30% of 36-month average market value (was 33%) |
| Interest-bearing deposits or securities | Below 30% of market capitalisation | Cash plus interest-bearing securities below 30% (was 33%) |
| Impermissible income | Below 5% of total income | Below 5% of total income, including all interest |
| Basis | Latest audited financial position | Latest statement; two-point buffer and three-period rule |
| Purification | Mandatory for the holder at period end | Dividend purification ratio published for investors |
The four sleeves and the job each one does
- Screened equities: the growth engine. Over ten years or more this is where most of the return should come from, and where the losses in a bad year will sit.
- Sukuk: the halal replacement for bonds. Sovereign T-Sukuk in dirhams carry no currency risk and pay semi-annual profit; global sukuk funds add diversification in US dollars.
- Gold: the diversifier. It moves independently of equities, is natively halal if physically backed, and attracts zakat every year.
- Halal cash: the buffer. Mudarabah or Wakala deposits, National Bonds and Islamic money market funds hold the money you will need within two years, plus the emergency fund.
What is missing matters as much as what is on the list. There are no conventional bonds, no interest-paying deposits, no REITs with debt above the thresholds, and no derivatives. A conventional balanced fund typically runs 40% in bonds; a halal portfolio replaces that sleeve with sukuk and gold, which is why its risk profile differs and why the UAE robo-advisors build separate Islamic portfolios rather than filtering the conventional ones. Our halal investing state of play maps every platform; this guide assumes you have chosen one and now need to decide what goes in it.
Sleeve one: screened equities through an Islamic ETF
The cheapest and most diversified way to hold screened equities is a single global Islamic ETF. The iShares MSCI World Islamic UCITS ETF (ISWD) is the reference fund: launched in December 2007, physically replicated, Irish-domiciled, with a total expense ratio of 0.30%, 387 holdings and USD 1.69 billion of assets on 16 October 2026 according to its iShares page and September 2026 factsheet. It distributes semi-annually and showed a trailing yield of 0.93% and a price-to-earnings ratio of 30.98, which tells you something important: Shariah screens remove most banks, insurers and indebted utilities, so the fund leans towards technology and healthcare and trades richer than the unscreened world index. That concentration is a feature of every halal equity portfolio and the reason the other three sleeves exist.
UAE investors reach these funds three ways. Self-directed, through baraka, which offers more than 20,000 US-listed stocks and ETFs with an AAOIFI-aligned screener, fractional shares from USD 1 and physical gold, under a DFSA Category 3C licence. Managed, through Sarwa, whose halal portfolios combine iShares Islamic equity ETFs, a Franklin Templeton sukuk fund and a gold ETC from USD 500 for a 0.85% advisory fee below USD 100,000, falling to 0.40% above USD 5 million, plus roughly 0.20% in fund costs. Or through StashAway MENA, whose Shariah Global Portfolios launched in August 2025 with no minimum, four risk levels, management fees of 0.2% to 0.8% and average fund costs of 0.4%. Our Sarwa versus StashAway comparison weighs the two; our halal ETF guide lists the funds.
One governance point applies to all three. None of baraka, Sarwa or StashAway operates a platform-level Shariah supervisory board; each relies on the certification of the underlying ETF issuers, and StashAway says so in terms. That is acceptable to many investors and uncomfortable for some. If you want a scholar-governed product rather than a screened one, the Islamic banks' funds and National Bonds' Mudarabah pool are the alternatives, and our analysis of halal labels on investing apps sets out the trade-off.
Sleeve two: sukuk, now from AED 1,000 at the federal level
Sukuk is the sleeve that changed most in 2026. The Ministry of Finance's Retail Sukuk page describes the fractionalised T-Sukuk launched through participating banks in November 2025: any resident with an Emirates ID can buy a pro-rata share of existing federal Treasury Sukuk from AED 4,000, structured under Ijarah and Murabaha, with maturities up to five years, semi-annual profit, a 0.25% fee on each purchase and sale, and nothing at maturity. Then on 23 June 2026 the Ministry opened the first Sovereign Retail T-Sukuk Programme, a direct primary issue: the Emirates News Agency reported AED 50 million, a two-year tenor, a 4.30% annual profit rate paid every six months, a minimum of AED 1,000 at par, and a Nasdaq Dubai listing, with Emirates NBD as lead receiving bank alongside Emirates Islamic, ADIB, Ajman Bank and Mashreq. ADCB's Retail T-Sukuk page shows a second issuance that closed on 28 September 2026. You need a DFM investor number. Our retail T-Sukuk guide covers the mechanics; the UAE Ministry of Finance page records the programme in our registry.
For diversification beyond the UAE, the global sukuk market is deep enough to hold a fund. The IFSB's 2025 Stability Report put Islamic financial assets at USD 3.88 trillion at the end of 2024, with sukuk issuance up 25.6% to USD 230.4 billion. Fitch's Global Sukuk Monitor for the first half of 2026 expected 2026 issuance below 2025 levels with credit quality resilient, and Fitch told the New Straits Times in October 2026 that outstanding sukuk exceed USD 1.1 trillion, over 80% of rated issues are investment grade and there have been no sukuk defaults since 2021. Inside Sarwa and StashAway the sleeve is a global sukuk fund in US dollars; a self-directed investor can hold the same through baraka. Two cautions from our sukuk versus bonds guide: a sukuk fund's price moves with profit rates like a bond fund's, and National Bonds' Term Sukuk, despite the name, is a Mudarabah savings plan with no secondary market.
Sleeve three: gold, in a size you will not regret
Gold earns nothing, which is exactly why it belongs in a halal portfolio: it is the one diversifier with no interest and no screening question, provided the vehicle is physically backed and you own metal rather than a claim settled in cash. Sarwa uses a gold ETC, StashAway holds gold alongside equities and sukuk, and baraka sells physical gold with storage and delivery. Our halal gold investing guide explains why most scholars reject unallocated or leveraged gold and how to check that a fund holds bars. Keep the weight modest: in our templates gold is 10% of every portfolio, enough to cushion an equity drawdown, not so much that a flat decade for the metal drags the plan. Gold is zakatable at 2.5% of market value every year whether or not you intend to sell.
Sleeve four: halal cash, measured against 2026 inflation
Cash is the sleeve where the UAE's inflation numbers decide how much is too much. The CBUAE's Quarterly Economic Review of September 2026 forecasts 2026 inflation at 2.4%, after 1.3% in 2025, with 2027 at 1.9%; the same review records Dubai's CPI at 5.3% year on year in the second quarter of 2026, driven by housing at 7.3% and transport at 15.1%, so a Dubai renter's personal inflation can run double the national figure. Against that, National Bonds distributed up to 4.45% for 2025, DIB's long-term Wakala deposits were listed at 4.30% expected for three years and 4.40% for five, and Sarwa's Save+ offers a Shariah-compliant money market option. Our DIB deposit rates guide and Islamic money market guide list current numbers. Hold three to six months of expenses plus anything you will spend within two years here, and no more: a 4% expected profit beats inflation by a point or two and does nothing for a ten-year goal.
Three allocations you can copy, by horizon
These templates are ours, built from the four sleeves above; they are not a recommendation for any individual, and the robo-advisors will size their own versions by risk score. The equity figure is the one to argue about: it should fall as the date you need the money approaches, not as markets wobble.
| Sleeve | Cautious (money needed in 3 to 5 years) | Balanced (5 to 10 years) | Growth (10 years or more) |
|---|---|---|---|
| Screened global equities (Islamic ETF or screened stocks) | 30% | 55% | 75% |
| Sukuk (UAE T-Sukuk in AED plus a global sukuk fund) | 45% | 30% | 15% |
| Gold (physically backed) | 10% | 10% | 10% |
| Halal cash (Mudarabah or Wakala deposit, Islamic money market) | 15% | 5% | 0% beyond the emergency fund |
Two adjustments are specific to the UAE. First, currency: your salary and rent are in dirhams, which are pegged to the US dollar, so a US-dollar ETF carries no practical currency risk for a resident, and dirham T-Sukuk give you a sukuk sleeve with none at all. Second, the sukuk sleeve can be split between federal Retail T-Sukuk, bought at par and held to maturity, and a global sukuk fund that trades daily; a cautious investor who dislikes seeing the sukuk line move can lean towards the former. Readers starting small should pair this with our what AED 100 to AED 100,000 buys article, since the minimums differ by sleeve: AED 100 at National Bonds, AED 1,000 for a Retail T-Sukuk unit, USD 1 on baraka, USD 500 at Sarwa, nothing at StashAway.
What the portfolio costs, and why it compounds
| Route | Entry | Platform or advisory fee | Underlying fund cost | Approximate all-in cost a year |
|---|---|---|---|---|
| Self-directed on baraka holding ISWD | USD 1 fractional | From USD 1 per trade | 0.30% (ISWD TER) | About 0.30% plus trades |
| Sarwa halal portfolio | USD 500 | 0.85% below USD 100,000, down to 0.40% above USD 5 million | About 0.20% | About 1.05% at entry tier |
| StashAway Shariah Global Portfolios | None | 0.2% to 0.8% | 0.4% average | 0.6% to 1.2% |
| Fractional T-Sukuk via participating banks | AED 4,000 | 0.25% to buy, 0.25% to sell, nil at maturity | None | 0.5% round trip, once |
| Sovereign Retail T-Sukuk, primary issue | AED 1,000 at par | Per receiving bank schedule | None | Profit set per issue (4.30% for the June 2026 two-year) |
| National Bonds Saving Bonds | AED 100 | None stated | Profit declared after the year (up to 4.45% for 2025) | Nil explicit; return is net of the Mudarib share |
The difference between 0.30% and 1.05% looks small and is not. Take AED 100,000 invested for ten years at an assumed 7% gross return every year. With no costs it grows to about AED 196,700. At a 0.30% drag it reaches about AED 191,300; at 1.05% about AED 178,200; at 1.2% about AED 175,700. The managed route therefore costs roughly AED 13,000 to 15,500 per AED 100,000 over the decade, which is the price of automatic rebalancing, a matched sukuk and gold sleeve, AED funding rails and a human to call. For a first-time investor who would otherwise never rebalance, that is often worth paying; for a disciplined investor above USD 100,000, the self-directed route and a once-a-year rebalance save real money.
Maintenance: rebalance, purify, pay zakat
A portfolio drifts. After a strong year for technology the equity sleeve of a balanced investor can run from 55% to 65% without a trade, and the risk has risen with it. Rebalance once a year, or whenever a sleeve is five points from target, by directing new contributions to the underweight sleeve first and selling only when that is not enough. Robo-advisors do this automatically; a self-directed investor should put a date in the calendar. The same date suits the two religious obligations. Purification: AAOIFI places the duty on whoever holds the share at period end, S&P publishes a dividend purification ratio, baraka's screener reports impermissible income percentages, and Sarwa and StashAway leave it to you. Estimate the impermissible share of your equity income, give it away without claiming reward, and keep a note. Zakat: equities, sukuk, gold and cash are all zakatable at 2.5% of market value once your wealth has passed the nisab for a lunar year; our zakat on stocks and funds guide explains the intention test, and the zakat hub has the calculator.
Our view
Halal portfolio building in the UAE in 2026 is simpler than the apps make it look. A global Islamic ETF at 0.30%, a sukuk sleeve that now starts with AED 1,000 of federal paper at a published 4.30%, a tenth in physically backed gold and a halal cash buffer sized to real Dubai inflation will carry most residents through a working life, and every piece is available from a phone. Our preference is to hold the sukuk sleeve in dirham T-Sukuk to maturity rather than a traded fund, because a resident's liabilities are in dirhams and the price noise of a sukuk fund adds nothing for a holder who will not sell. On platforms, we would send a first-time investor to a managed halal portfolio and tell them to review the fee once they pass USD 100,000, and send a disciplined investor straight to a brokerage with a screener. The trade-off we will not soften is governance: none of the three UAE platforms carries a Shariah board of its own, so your portfolio's compliance is only as strong as the fund issuers' certificates and your own purification habit. If that is not enough, a bank-distributed Islamic fund or National Bonds is the scholar-governed route and costs you some diversification. Whichever you choose, write the allocation down, rebalance on a date, and do not let a strong year for one sleeve rewrite the plan. Figures checked against ishares.com, mof.gov.ae, wam.ae, centralbank.ae, spglobal.com and the HalalWallet registry on 20 October 2026.
Frequently asked questions
What should a halal investment portfolio contain?
Four sleeves: Shariah-screened equities, usually through an Islamic ETF; sukuk, such as the UAE's Retail T-Sukuk or a global sukuk fund, in place of bonds; physically backed gold as a diversifier; and halal cash in Mudarabah or Wakala deposits or an Islamic money market fund. It should hold no interest-bearing bonds, no conventional deposits and no companies that fail the AAOIFI or index-provider screens.
How much of a halal portfolio should be in sukuk?
It depends on when you need the money. In our templates sukuk is 45% of a portfolio needed within three to five years, 30% for five to ten years and 15% for ten years or more, with gold at 10% throughout. UAE residents can fill the sleeve with dirham T-Sukuk from AED 1,000 at a published profit rate, which removes currency and price risk if held to maturity, or with a global sukuk fund that trades daily.
Is the iShares MSCI World Islamic ETF halal?
It tracks the MSCI World Islamic Index, which applies Shariah business and financial screens, and it is the core equity holding in UAE halal robo portfolios. It costs 0.30% a year, held 387 companies in October 2026 and distributes income semi-annually. Compliance rests on the index provider's screening rather than a board at the platform you buy it through, and holders still need to purify the small impermissible income the screened companies earn.
How do I buy UAE government sukuk as an individual?
Two ways. Fractional T-Sukuk, launched in November 2025, are bought through participating banks' digital platforms from AED 4,000 with a 0.25% fee on purchase and sale. The Sovereign Retail T-Sukuk Programme, which opened on 23 June 2026, sells new issues at par from AED 1,000 through the DFM app, the iVestor app and receiving banks; the first issue paid 4.30% a year over two years and a second closed on 28 September 2026. You need a DFM investor number.
Do I pay zakat on my investment portfolio?
Yes. Shares held for growth, sukuk, gold and cash are all zakatable at 2.5% once your total zakatable wealth has been above the nisab for a lunar year. Most scholars allow market value for shares held as a trading investment; a minority view values long-term holdings on the company's zakatable assets. Gold is zakatable at market value every year even if you never intend to sell it.
Is a robo-advisor or a DIY brokerage better for a halal portfolio?
A managed halal portfolio at Sarwa or StashAway costs roughly 0.6% to 1.2% a year all in and rebalances for you; a self-directed Islamic ETF on baraka costs about 0.30% plus trades but relies on your discipline. On AED 100,000 over ten years at an assumed 7% gross, the fee gap is worth about AED 13,000 to 15,500. New investors usually benefit from the managed route; investors above USD 100,000 who will rebalance annually usually do not.
Sources
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See side-by-side comparisons of Shariah-compliant products, or let our matcher recommend the best options for your situation.
- AAOIFI, Shariah Standard No. 21: Financial Papers, text as published by the Philippine Stock Exchange
- S&P Dow Jones Indices, S&P Shariah Indices Methodology, change effective 18 September 2026
- iShares MSCI World Islamic UCITS ETF (ISWD), product page and factsheet, data as at 16 October 2026
- UAE Ministry of Finance, Retail Sukuk initiative
- Emirates News Agency (WAM), MoF opens subscription for inaugural Sovereign Retail T-Sukuk, 23 June 2026
- ADCB, Retail T-Sukuk subscription services, second issuance timetable
- IFSB, Islamic Financial Services Industry Stability Report 2025, press release 16 May 2025
- Fitch Ratings, Global Sukuk Monitor 1H26, 8 July 2026
- New Straits Times, Global sukuk issuance set to extend recovery: Fitch, October 2026
- Central Bank of the UAE, Quarterly Economic Review, September 2026
