Is there Zakat on ETFs?

Yes, Zakat is required on ETFs (Exchange-Traded Funds) because they contain Zakatable assets, such as cash, stocks, and other eligible holdings. Since ETFs are composed of various assets, the amount of Zakat due depends on the proportion of Zakatable assets within the fund.

To calculate Zakat on an ETF:

1. Assess the ETF’s composition – Identify the percentage of assets that are zakatable (e.g., cash, stocks, and tradeable commodities).
2. Determine the zakatable portion – Only assets classified as Zakatable are included in the calculation.
3. Calculate 2.5% on the zakatable portion – Zakat is due on 2.5% of the market value of those assets.

Since ETF holdings vary, it’s important to check fund reports or financial statements to determine the exact percentage of Zakatable assets before making your Zakat payment.

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