Australia’s First Islamic ETF: Hejaz Equities Fund Active ETF (ASX: ISLM)

The Hejaz Equities Fund Active ETF (ASX: ISLM) represents a groundbreaking step for Australian Islamic investing. As one of the nation’s first Sharia-compliant ETFs, ISLM provides investors with direct access to a diversified portfolio of global equities, screened to align with Islamic investment principles. 

Listed on the Australian Securities Exchange (ASX) under ticker ISLM, this fund combines professional active management, global reach, and Sharia oversight, offering a halal way to grow your wealth. 

This page will cover what ISLM is, how it works, its Sharia compliance process, and how you can add it to your halal investment portfolio with Hejaz. 

What is ISLM?  

ISLM is the Hejaz Equities Fund Active ETF, a Sharia-compliant Exchange Traded Fund (ETF) designed to give investors exposure to a broad, diversified mix of halal equities across both Australian and global markets. 

Rather than selecting individual halal stocks, ISLM pools a wide range of compliant companies into one single investment vehicle, allowing investors to participate in international markets with convenience. 

ISLM vs Other Hejaz ETFs 

While Hejaz Property Fund Active ETF (ASX: HJZP) offers Sharia-compliant property exposure and Hejaz High Innovation Active ETF (ASX: HHIF) targets growth and innovation sectors, Hejaz Equities Fund Active ETF (ASX: ISLM) focuses on broad global equities, making it an ideal core holding for Muslim investors seeking diversification and long-term capital growth. 

To better understand how halal ETFs operate and differ from conventional investments, read our guide on Halal ETFs and Investing Principles. 

How Does ISLM Work? 

Hejaz Equities Fund Active ETF (ASX: ISLM) follows an active investment approach, selecting a mix of Sharia-approved global and domestic shares across industries and markets. The goal is to deliver sustainable capital growth over the long term (typically five to seven years), offering a balance of risk and reward aligned with Islamic principles. 

Key Features

• Ticker: ASX: ISLM
• Structure: Managed Fund (ETF)
• Objective: Capital appreciation through a globally diversified, Sharia-compliant equities portfolio
• Management: Actively managed by the Hejaz investment team
• Distributions: Typically paid annually
• Liquidity: Tradeable on the ASX like any listed share and Halal Money

Sharia Compliance and Screening for ISLM  

Hejaz Equities Fund Active ETF (ASX: ISLM) is structured in strict accordance with AAOIFI (Accounting and Auditing Organisation for Islamic Financial Institutions) standards. 

The Sharia Screening Process

ISLM applies both industry and financial ratio screening to ensure all holdings meet Sharia requirements. 

Industry Screening (Negative Screening)

Excludes companies earning more than 5% of revenue from prohibited activities such as: 

• Alcoholic beverages (production, retail, bars, pubs). 

• Tobacco (manufacturing and retail, including vapes and vape like activities). 

• Pork and pork-related products. 

• Conventional financial services (commercial banks involved in retail banking, corporate lending, investment banking; companies involved in mortgage and mortgage related services; providers of financial services, including insurance, capital markets and specialized finance; gold and silver hedging providers, credit agencies; stock exchanges; hedge funds; specialty boutiques; consumer finance services, including personal credit, credit cards, lease financing, travel-related money services and pawn shops; financial institutions primarily engaged in investment management, related custody and securities fee based services; companies operating mutual funds, closed-end funds and unit investment trusts; financial institutions primarily engaged in investment banking and brokerage services involving conventional securities and derivative instruments, including equity and debt underwriting, mergers and acquisitions; securities lending and advisory services institutions; and insurance and reinsurance brokerage firms, including companies providing property, casualty, life, disability, indemnity or health insurance (including private and supplemental/ancillary policies). 

• Defence and weapons (The manufacture, sale, or distribution of weapons, military equipment, or defence systems, production of weapons of mass destruction, including nuclear, chemical, and biological weapons, aerospace or technology companies where revenue is derived from supplying military or weapons-related products or service. 

• Gambling and casinos, including lottery and betting services. 

• Music production and distribution, radio broadcasting. 

• Cinema and television production/distribution (businesses engaged in the production, distribution and screening of movies and television shows, owners and operators of television broadcasting systems and providers of cable or satellite television services involved in the introduction of cinema and entertainment programs not including kids, cultural and sports production). 

• Adult entertainment (businesses whose primary purpose is the production, distribution, marketing, hosting, or sale of sexually explicit content or services and other age-restricted sexual material). 

• Embryonic stem cell activities (e.g., businesses, clinics or hospitals involved in abortion, surrogacy, or donation-based fertility treatments).

Financial Ratio Screening 

Aims to maintain low leverage and limited interest exposure by screening out companies with excessive debt or cash interest income. 

Ongoing Oversight and Purification 

The Sharia Board conducts regular reviews and applies purification mechanisms to ensure continued compliance.

To learn more about how we apply Sharia-compliant screening criteria across all our investment products, please visit our Sharia Screening Methodology page for more details.

How to Buy ISLM  

Investing in ISLM is straightforward and accessible for both individuals and financial advisers. 

1. Open the Halal Money app 
2. Tap “Invest” in the navigation bar 
3. Browse halal ETF options 
4. Select Hejaz Equities Fund Active ETF (ASX: ISLM)
5. Tap “Buy”  
6. Enter your investment amount 
7. Confirm your order

Fees, Risks and Performance  

Like all ETFs, ISLM involves the management fees component covers certain ordinary expenses such as Responsible Entity fees, investment management fees, custodian fees, and administration and audit fees. For full details about fees and costs, please refer to ours Product Disclosure Statement (PDS). 

Common Risks 

• Market Risk: Prices of equities can fluctuate due to economic factors.
• Currency Risk: Global exposure means returns may vary with currency movements.
• Sharia-Compliance Risk: Strict screening can limit diversification compared to conventional ETFs.
• Active-Manager Risk: Performance may depend on Hejaz’s investment decisions.
• Please refer to our Product Disclosure Statement (PDS) for full details about the risks.

Who Is ISLM Suitable For? 

Hejaz Equities Fund Active ETF (ASX: ISLM) caters to individuals and organisations seeking financial growth guided by Islamic principles. It’s ideal for Muslims and value-driven investors who prefer interest-free financial solutions. 

Suitable For: 

• Investors seeking Sharia-compliant global equities exposure.
• Muslims building a long-term diversified portfolio aligned with faith principles.
• Advisers constructing balanced portfolios with a core halal equities component.

May Not Suit:

• Short-term traders seeking rapid returns.
• Income-only investors prioritising yield over growth.

ISLM also complements other halal investment options available in the Hejaz Halal ETF range, enabling investors to diversify across sectors such as property, innovation, and income. 

Invest With Confidence  

The Hejaz Equities Fund Active ETF (ASX: ISLM) provides a pioneering solution for Muslim investors who want to grow their wealth through Sharia-compliant global equities. 

As Australia’s first Islamic ETF, it bridges modern market access with Islamic finance principles, offering a reliable, transparent, and halal pathway to long-term wealth creation. 

Ready to invest with confidence? Contact Hejaz today to discuss your goals or explore the full Hejaz Halal ETFs and Hejaz Investment Funds for more details. 

FAQs

Is ISLM a Sharia-Compliant ETF? 

Yes. Hejaz Equities Fund Active ETF (ASX: ISLM) is Sharia-compliant by adhering to AAOIFI standards for Islamic investment certification. 

How is ISLM Different from a Conventional Global Equities ETF? 

Hejaz Equities Fund Active ETF (ASX: ISLM) invests exclusively in screened, halal companies, excluding those involved in Riba, gambling, or alcohol. It offers similar global diversification benefits while maintaining faith-based integrity. 

What is the Target Benchmark for ISLM? 

ISLM aims to deliver performance comparable to major global equity benchmarks over the long term, balancing returns with adherence to Sharia rules. 

What Fees Does ISLM Charge?

Management and administration fees apply and are detailed in the PDS. As an actively managed ETF, ISLM includes additional oversight for compliance and portfolio optimisation. For full details about fees and costs, please refer to ours Product Disclosure Statement (PDS). 

How Often Does ISLM Pay Distributions?

Hejaz Equities Fund Active ETF (ASX: ISLM) typically pays semi-annual distributions, representing profits and dividends from underlying Sharia-compliant holdings. 

What’s the Difference Between ISLM and Other Hejaz ETFs?

Hejaz Equities Fund Active ETF (ASX: ISLM) focuses on diversified global equities, while Hejaz Property Fund Active ETF (ASX: HJZP) targets property exposure and Hejaz High Innovation Active ETF (ASX: HHIF) invests in innovation and growth sectors. 

Together, these ETFs form the foundation of a balanced, halal investment strategy. 

Why Should I Invest in ISLM Through Hejaz?

Hejaz is Australia’s established Islamic financial services provider, offering access to certified halal ETFs, managed funds, superannuation products. 

By investing through Hejaz, you gain: 

Hejaz is Australia’s leading authority in Sharia investing, offering access to certified halal ETFs, managed funds, and superannuation, and financing products. By investing through Hejaz, you gain: 

• Access to diversified, professionally managed halal investments
• Guidance from Sharia finance specialists
• Seamless integration across property, innovation, and equity-based portfolios

To learn more about how we apply Sharia-compliant screening criteria across all our investment products, please visit our Sharia Screening Methodology page for more details.

Disclaimer: 

Hejaz Asset Management Pty Ltd (ABN 69 613 618 821, AFSL 550009) is the Investment Manager for Hejaz investment funds. The information contained on the Hejaz website, in our product documentation, and in any promotional material is provided for general information purposes only and does not take into account your personal objectives, financial situation, or needs. It is not intended to be, and must not be relied upon as, financial, legal, tax, or other advice. You should consider whether the information is appropriate for your circumstances and read the relevant Product Disclosure Statement (PDS) or offer document before making any investment decision. We recommend you obtain independent professional advice before investing. 

All investments carry risk. The value of investments and the income from them can go down as well as up, and you may lose some or all of the capital you invest. Past performance is not a reliable indicator of future performance. Product features, fees, and charges may change without notice. While we aim to ensure the accuracy of information provided, Hejaz Asset Management Pty Ltd makes no representation or warranty as to the accuracy, completeness, or currency of the information and accepts no responsibility for any loss or damage arising from reliance on it. 

References to “Islamic” or “Sharia-compliant” products relate to compliance with Islamic finance principles as interpreted by our appointed Sharia advisers. These interpretations may differ from those of other scholars or organisations. 

By accessing the Hejaz website, materials, or products, you acknowledge and agree to the terms of this disclaimer.