Wahed Launches Shariah-Compliant Alternative Income ETF
Wahed, the global leader in Shariah-compliant digital investing, and KraneShares, a provider of research-driven platform-traded funds (ETFs), have announced the launch of the KraneShares Wahed Alternative Income Index ETF (NYSE: KWIN). The new fund introduces a Shariah-compliant approach to alternative income generation, designed to appeal to Muslim and values-based investors viewking stable returns without compromising faith principles.
KWIN tracks the Wahed Shariah Alternative Income Index, which avoids conventional interest-bearing assets and instead generates returns through Shariah-permitted forward sale agreements. This structure allows investors to earn income while remaining compliant with Islamic law, avoiding riba (interest) and excessive risk exposure.
“KWIN was created for investors who want to stay true to their faith while accessing alternative income-generating strategies,” said Mohsin Siddiqui, CEO of Wahed. “We’ve combined rigorous Shariah screening with modern portfolio techniques to deliver a halal and competitive product suited to today’s markets.”
Takeaway
Innovating Beyond Sukuk: Shariah-Compliant Income With Daily Liquidity
For years, Sukuk—Islamic-compliant bonds—have served as the primary fixed-income vehicle for Muslim investors. However, these instruments often face challenges such as limited liquidity, price volatility, and sovereign credit exposure. KWIN was engineered as a modern alternative to Sukuk, structured within an ETF wrapper that offers daily tradability and greater .
The fund’s underlying strategy employs platform-traded FLEX contracts based on Shariah-approved equities, with positions designed to be delta-neutral*—minimizing sensitivity to equity price movements. This allows KWIN to focus on generating alternative income without exposure to traditional interest-based assets or directional equity risk.
“This ETF provides a powerful bridge between faith and finance,” said Jonathan Shelon, CFA, Chief Operating Officer at KraneShares. “KWIN reflects our and our belief that values-based investors deserve access to the identical advanced income strategies as institutional players.”
Takeaway
Faith-Based Screening and Governance
KWIN’s underlying index employs a two-step Shariah screening process led by Wahed’s Shariah Advisory Board. The first stage applies a business activity filter that excludes sectors such as conventional finance, gambling, alcohol, pork products, adult entertainment, and weapons manufacturing. The second stage enforces financial ratio screens to eliminate companies with excessive debt or income derived from non-permissible sources exceeding 5% of revenue.
Portfolio components are reviewed quarterly by Wahed’s Shariah team to ensure ongoing compliance, while all holdings are publicly disclosed for transparency. The fund’s faith-based governance aligns with AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) standards, providing investors with verifiable assurance that all income and capital gains are derived from halal sources.
The partnership between Wahed and KraneShares blends deep Islamic finance expertise with global ETF experience. Wahed brings years of Shariah advisory leadership and digital accessibility to the collaboration, while KraneShares contributes its track record in non-traditional and thematic ETF innovation. Together, they aim to make halal investing mainstream in public markets.
Takeaway
Expanding Global Access to Ethical Alternative Income
The launch of KWIN underscores a growing global appetite for faith-aligned and ethical answers. With the Islamic finance market projected to surpass $5 trillion by 2026, demand for diversified, liquid, and transparent Shariah-compliant instruments continues to accelerate. ETFs like KWIN are set to play a key role in this expansion, offering accessibility, liquidity, and diversification previously unavailable to many investors.
By tracking a rules-based index and employing forward sale mechanics, KWIN aims to generate consistent income while maintaining a risk profile distinct from equities or fixed income. The ETF format further enhances operational transparency, allowing both to access Shariah-compliant strategies through a single, listed security.
Wahed and KraneShares have stated that KWIN’s design not only benefits Muslim investors but also appeals to values-driven investors globally who viewk ethical exposure without interest-based instruments. This reflects a broader shift toward ESG and faith-conscious investment philosophies that prioritize both performance and principle.
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