Education
What Are Exchange-Traded Funds (ETFs) and How Do I Invest in Them from Saudi Arabia?
A simple guide to exchange-traded funds (ETFs)
In date season, shops fill up with boxes of assorted dates: a row of Sukkari, a row of Khalas, a row of Ajwa, and a few Medjool tucked in the corner. One box lets you taste every kind, without driving from farm to farm to buy a kilo from each palm.
But did you know there is a way to invest built on the same idea as that mixed box? It is called an exchange-traded fund, or ETF.
An exchange-traded fund (ETF) is an investment fund that holds many assets, such as stocks, sukuk or gold, in one basket that tracks a specific index. Its units trade on the stock exchange like shares, so you buy and sell them during trading hours at the market price. You can invest in ETFs from Saudi Arabia by opening an account with a brokerage licensed by the Capital Market Authority (CMA) and buying on the Saudi Exchange or on global markets, or through a digital investment manager that builds and manages the portfolio for you.
In this article we explain how these funds work, go through the ETFs listed on the Saudi Exchange, and walk with you step by step to your first purchase.
What are exchange-traded funds?
ETF is short for exchange-traded fund, a fund whose units trade on a stock exchange. Most ETFs track an index, which is why their Arabic name translates as "traded index funds".
An index is a list of assets chosen by published rules. The S&P 500, for example, includes about 500 of the largest US companies. Buy one unit of a fund that tracks it, and you own a small slice of all those companies in a single purchase.
Back to the box:
- The box is the fund.
- The dates inside are the stocks, sukuk or gold.
- The label that lists the varieties and their shares is the index.
- The person who packs the box to match the label is the fund manager.
Because the fund manager follows the label and doesn't pick stocks, this approach is called passive investing. It is one reason these funds usually charge less than actively managed funds.
How does an ETF work?
The unit price moves throughout the trading session with supply and demand, just like a share price. Next to it, a second number is published called the indicative net asset value (iNAV), an estimate of what the assets behind each unit are worth at that moment.
The closer the two numbers, the fairer the price. On 26 October 2026, for example, the last traded price of the Albilad Gold ETF was SAR 20.94 and its iNAV was SAR 20.88. If the market price sits clearly above the iNAV, you are paying more for the box than the dates inside are worth.
As for dividends, some funds pay them out in cash to unitholders and others reinvest them inside the fund. Each fund's prospectus states its policy.
ETFs vs stocks vs traditional mutual funds
| Comparison | ETF | Stock | Traditional mutual fund |
|---|---|---|---|
| What do you own? | A share of a basket of assets | A share of one company | A share of a basket of assets |
| Where do you buy? | On the exchange, through a broker | On the exchange, through a broker | From the fund manager |
| When is the price set? | Throughout the trading session | Throughout the trading session | On set valuation days |
| Diversification | Usually high | Low | Usually high |
| Management | Usually tracks an index | No manager | Tracks an index or is actively managed |
| Annual fees | Usually low | No management fee | Usually higher for active funds |
Benefits and risks of ETFs
What makes the mixed box a comfortable choice for a new investor:
- Diversification with a small amount, because one unit gives you a share in dozens or hundreds of assets.
- Usually low fees, because the fund tracks an index and doesn't need a team to pick stocks.
- Clear holdings. The fund publishes what it owns, so you know what is in the box.
- Flexibility to buy and sell during trading hours.
On the other hand, keep these in mind:
- If the whole season is weak, the whole box feels it. A fund spreads risk, it doesn't erase it, and when the market falls the fund falls with it.
- Some locally listed funds trade small volumes each day, so the gap between the buy and sell price can widen.
- The riyal is pegged to the US dollar, so funds that hold assets priced in other currencies also move with those currencies against the riyal.
ETFs listed on the Saudi Exchange
The first ETF listed on the Saudi Exchange was the Falcom 30 ETF in 2010, known today as the Yaqeen 30 ETF.
As of 26 October 2026, the ETF market watch page on the Saudi Exchange (Tadawul) website lists 14 funds:
| Asset class | ETFs |
|---|---|
| Saudi equities | Yaqeen 30, Yaqeen Petrochemical, SABI Quant, Albilad Saudi Growth, Albilad Saudi Equity, Alrajhi Saudi Equity |
| MENA equities | Yaqeen ESG |
| Sovereign and government sukuk | Albilad Sovereign Sukuk, Alinma Government Sukuk |
| Gold | Albilad Gold |
| US equities | Albilad US, Albilad US Tech |
| Hong Kong and China equities | Albilad Hong Kong China, SABI HK |
All of these funds trade in riyals, so you can invest in gold or US stocks from your local account without converting currency.
They trade like shares, Sunday to Thursday: an opening auction from 9:30 to 10:00 am, then continuous trading until 3:00 pm. The minimum purchase is one unit, settlement takes two business days (T+2), and the trading commission on the Main Market is capped at 0.155% of the trade value, so at most SAR 15.5 on a SAR 10,000 trade.
How do I invest in ETFs from Saudi Arabia?
You have three routes. Pick the one that fits your time and experience.
Route 1: Buy on the Saudi Exchange
- Open an investment account with a brokerage licensed by the CMA.
- Transfer the amount you want to invest into the account.
- Search for the fund by name or ticker on the trading platform.
- Choose the quantity and the order type. A limit order suits thinly traded funds better, because it won't fill at a price higher than the one you set.
- Place the order during trading hours. Settlement completes within two business days.
Route 2: Buy on global markets
Some CMA-licensed brokerages in Saudi Arabia offer access to the US market, where you can buy large global funds such as ETFs that track the S&P 500. Before you start, note three things:
- You trade in dollars, and the US session starts in the late afternoon Saudi time and runs into the night.
- Dividends from US-registered funds usually have 30% tax withheld, because Saudi Arabia and the United States have no tax treaty.
- Commissions and transfer fees differ from one platform to another, so compare them.
Route 3: A digital investment manager
If you don't have time to pick funds and track their weights, there is an easier route: a robo-advisor. It asks about your goals and how much risk you are comfortable with, then builds you a portfolio of ETFs and keeps an eye on it for you.
How do I choose the right ETF?
Read the label before you buy
The fund's prospectus shows the index it tracks and its largest holdings. A "US equities" fund could mean hundreds of companies across many sectors, or it could mean the tech sector alone.
Take two minutes to read the fund's top ten holdings before you buy.
Work out the packing cost
The expense ratio is the fund's annual fee, and it comes out of the fund's value automatically. An expense ratio of 0.45%, for example, means SAR 45 a year for every SAR 10,000.
Compare this ratio across funds that track the same index.
See how busy the market is
The more units a fund trades, the easier it is to buy and sell at a price close to its iNAV.
Check the average daily trading volume, and use a limit order.
Look for the Sharia seal
Funds differ in how closely they follow Sharia guidelines, especially on global markets. Some indices exclude companies with non-compliant activities or high debt, such as the S&P 500 Shariah index.
Look in the fund's prospectus for its Sharia standards and the body that reviews them.
Don't fill the basket with one kind
A single fund usually diversifies within one asset class. Portfolio diversification means combining stocks, sukuk and gold in proportions that fit your goals.
Spread your investment across more than one asset class.
How do I invest in ETFs with Tamra Capital?
Tamra means "a date" in Arabic, so you can probably guess this box is close to our hearts.
At Tamra Capital we pack the whole basket for you: a portfolio of Sharia-compliant global ETFs, such as SPUS, ISWD, SPRE, ISDE, GLD and SPSK, spread across stocks, sukuk, real estate and gold, and covering more than 1,000 companies, sukuk and properties worldwide.
- Pick the portfolio that fits your goals and risk level, or set each fund's weight yourself in the flexible portfolio.
- We reinvest your dividends into your portfolio automatically.
- You can start with no minimum investment.
- The management fee is SAR 20 a month if the average value of your portfolios is below SAR 60,000, and 0.4% a year once it reaches SAR 60,000 or more. Investors aged 25 and under pay SAR 1 a month until their total investment reaches SAR 60,000. Fees exclude VAT.
Tamra Capital is licensed by the Capital Market Authority under license number 20212-30.
Frequently asked questions about ETFs
Are ETFs halal?
It depends on the fund. Some funds track indices that exclude activities that don't comply with Sharia and are subject to Sharia supervision, while others follow no such guidelines. Check the fund's prospectus before you buy.
How much money do I need to start?
On the Saudi Exchange the minimum is one unit. On 26 October 2026, unit prices of the listed ETFs ranged from SAR 6.65 to SAR 47.11, plus the trading commission. With Tamra Capital you can start with no minimum.
Do ETFs pay dividends?
Some pay cash dividends regularly, and others reinvest them inside the fund. The fund's prospectus tells you which.
Can I buy an S&P 500 ETF from Saudi Arabia?
Yes, through a licensed brokerage that offers access to the US market. The Saudi Exchange also lists two ETFs that invest in US stocks: the Albilad US ETF and the Albilad US Tech ETF.
What is the difference between an ETF and a regular mutual fund?
ETF units trade on the exchange at a price that changes throughout the session. With a regular mutual fund, you subscribe and redeem through the fund manager at a price calculated on valuation days. ETFs also usually track an index, so their fees tend to be lower.
Is investing in ETFs safe?
ETFs listed on the Saudi Exchange are supervised by the Capital Market Authority, but their value rises and falls with the prices of their assets, and no return is guaranteed. Diversifying and investing for the long term soften the effect of market swings.
In closing
You don't judge a box of dates by the first one you taste, and you don't judge an investment by one week in the market. ETFs are a simple way to own a piece of a whole market instead of betting on a single palm.
If you have any questions about ETFs, the Tamra team is happy to help.
Start with a small box.
Keep going every month.
And play the long game.
Sources: Saudi Exchange: ETFs market watch and Saudi Exchange: Capital market overview, accessed 26 October 2026.
This article is for financial education and is not a recommendation to buy or sell any security.
