Exchange-traded funds have transformed how investors access markets. What began as a simple way to track equities has evolved into a mature ecosystem that now spans fixed income, commodities, and specialised asset classes that were once difficult to reach. Until recently, Sukuk were largely absent from that evolution.
Despite representing a significant and growing share of the US-dollar-denominated debt market, Sukuk have remained structurally harder to access for many investors. Large minimum ticket sizes, fragmented liquidity, and operational complexity meant that, in practice, exposure was often limited to specialists or regional players.
This gap between scale and accessibility is what the next phase of Sukuk ETFs is beginning to address.
Turning a fragmented market into a single access point
When ASB Capital was established, the objective was to develop investment solutions that improve access, efficiency, and choice for investors, particularly in parts of the market that had yet to benefit from modern investment structures. That approach directly informed the launch of XASB, a Sukuk exchange-traded fund developed by ASB Capital in partnership with Xtrackers by DWS.
Listed on the London Stock Exchange, XASB provides diversified exposure to more than 150 sovereign and corporate Sukuk through a single, regulated instrument. Rather than requiring investors to navigate individual issuances or manage settlement and custody complexities, the ETF brings together Sukuk from across regions into a transparent, liquid structure that can be accessed through standard brokerage platforms. In practical terms, it allows investors to gain broad Sukuk exposure in much the same way they would access global bonds or equities through an ETF - efficiently, at scale, and with clear visibility on underlying holdings.
The ETF is cost-efficient, with a 0.40 per cent fee and a current yield of around 5 per cent and can be accessed through standard brokerage platforms. This aligns Sukuk exposure with the way investors already engage with global fixed income markets.
Why this matters now
The timing is not accidental. Global ETF assets have expanded rapidly in recent years, reflecting investor demand for tools that combine diversification, liquidity, and cost efficiency. At the same time, the Sukuk market itself has continued to grow in depth and sophistication, supported by issuance from governments and corporates across multiple geographies. With the global Sukuk market now surpassing $1 trillion in market value and widely expected to double by 2030, it has moved beyond its origins as a niche segment for institutions and high-net-worth investors, increasingly positioning itself as a credible alternative within the broader fixed-income universe. What has been missing is the connective tissue between the two.
By structuring Sukuk exposure in an ETF format, products like XASB help integrate Sukuk more naturally into global fixed-income allocations. This is particularly relevant for investors looking to diversify beyond conventional bonds, manage income exposure, or build resilience into portfolios during periods of market uncertainty.
Complementing, not replacing, direct Sukuk investment
It is important to be clear about what Sukuk ETFs are - and what they are not. They are not a substitute for direct Sukuk investment, nor are they designed to change the fundamental nature of the asset class. Instead, they act as a complementary access route, suited to investors who value diversification, daily liquidity, and operational simplicity alongside Shari’a-compliant exposure.
For institutions, this can mean easier portfolio integration. For individual investors, it can mean access to a market that was previously out of reach. From a market perspective, it also supports broader participation, which, over time, contributes to healthier secondary market dynamics and price discovery.
A broader step for the ETF ecosystem
The significance of Sukuk ETFs goes beyond any single product. It reflects a broader shift in how capital markets evolve: established asset classes are increasingly being wrapped in modern structures that meet global investor expectations without diluting their underlying characteristics.
The London Stock Exchange listing provides a familiar and regulated venue for international investors, but the real value lies in what the structure enables - a practical bridge between a growing Sukuk market and a global investor base that is already comfortable with ETFs as a core portfolio tool.
As ETFs continue to mature, their relevance will increasingly depend on their ability to open access to segments that were historically underserved, rather than simply replicating exposures that are already easy to obtain.
Bringing Sukuk into the mainstream conversation
Sukuk have long demonstrated stability, scale, and relevance within global fixed income. What has changed is the infrastructure around them.
With the introduction of diversified Sukuk ETFs such as XASB, the asset class becomes easier to understand, easier to access, and easier to integrate into global portfolios. That shift may appear incremental, but over time it has the potential to reshape how Sukuk are perceived - not as a niche allocation, but as a practical component of modern fixed-income strategies.
In that sense, the growing presence of Sukuk in the ETF market is less about novelty and more about alignment with how investors already choose to invest.
