High expense ratios for setting up a shariah compliant retirement portfolio


My employer recently allowed us to open a PCRA for pre-tax retirement account.
My current 401K is 100% invested into a Vanguard Target fund with very low expense ratios.
When I compared the expenses I will be paying for halal ETFs and mutual funds for the next 17 yrs (when I retire insha’ Allah) at 6% model growth, the difference is about 110K vs 6K!! This is a very significant difference, and one that none of these companies offering Islamic investment choices talk about!

What are some options to reduce these expense ratios? Are there alternatives?

I hear you – the fees are steep and it’s a major pain point. Unfortunately, there’s no shariah compliant, low-cost index fund yet. We’d love to partner with a company like Vanguard to hopefully make it happen one day.


It will improve over time. The more people that invest, the lower the fees will get.

1 Like