IGDA vs ISWD: Two Global Developed Market Halal ETFs Compared

IGDA and ISWD both cover global developed markets but use different screening methodologies. IGDA uses Dow Jones Islamic Market (DJIM) screening with 30% debt thresholds calculated against a 24-month average market capitalization. ISWD uses MSCI Islamic screening with 33.33% thresholds against total assets.

The DJIM methodology is slightly more conservative on debt limits (30% vs 33.33%) but uses a market-cap denominator that can be more volatile than total assets. MSCI uses a buffer system (30% entry, 33.33% threshold, 35% exit) to reduce index turnover, while DJIM applies thresholds directly.

In practice, both methodologies produce similar portfolios with comparable sector tilts — technology overweight, financials underweight. The differences are at the margins and unlikely to produce materially different long-term returns.

The most practical differences between IGDA and ISWD are cost and distribution policy. ISWD charges 0.30% — the lowest fee of any global halal ETF. IGDA charges 0.40%, a 0.10% annual premium that translates to ~$100/year per $100K invested.

IGDA accumulates dividends (reinvests them into the fund), while ISWD distributes them semi-annually. For investors in tax jurisdictions where accumulation is more efficient (common in Europe), IGDA's higher fee may be partially offset by tax savings on reinvested dividends.

Both are UCITS funds domiciled in Ireland and listed on the London Stock Exchange. IGDA uses full replication (~500 holdings), as does ISWD (669 holdings). ISWD's longer track record (since 2007 vs 2022) provides more historical data for analysis.