Wahed introduces UCITS ETFs combining Shariah screening with ethical oversight

Wahed has launched a suite of UCITS equity exchange-traded funds (ETFs) in Europe that combine Shariah screening with an additional discretionary review based on Islamic ethical and human rights principles, following approval from the Central Bank of Ireland.

The Ireland-domiciled ETFs are designed to meet standard Shariah requirements, including the exclusion of sectors such as alcohol, gambling and conventional financial services, while also applying an added values-based assessment intended to address broader ethical considerations.

Mohsin Siddiqui, chief executive of Wahed, said the additional screening reflects core Islamic principles that extend beyond financial compliance. “Principles such as responsibility, the protection of human dignity and the avoidance of harm are embedded in Shariah,” he said, adding that the framework is intended to apply those values to contemporary global challenges.

Under the additional review, Wahed evaluates companies across three areas: the severity of potential harm, a firm’s involvement in enabling or benefiting from harm, and its willingness to address concerns and improve practices. The assessment draws on external sources including frameworks and databases from the UN Office of the High Commissioner for Human Rights, the American Friends Service Committee, the Uyghur Forced Labor Prevention Act Entity List, and Norway-based pension fund ethics reviews.

The ETFs are structured as actively managed funds, allowing Wahed to adjust holdings in response to emerging humanitarian or ethical concerns, the company said.

Wahed operates across markets including the UK, the United States, Malaysia and the UAE, and manages more than $1 billion in assets globally. The launch expands its presence in the European fund market and adds to its existing Shariah-compliant investment offerings.