From Zawya.com: ETFs and Islamic finance can work very efficiently. This is especially true in the case of physically-based iShares ETFs where you have a combination of Shari’ah-compliant ETFs that own the underlying securities in the index.
This is a significantly better structure than swap-based ETFs where there can be confusion surrounding the Shari’ah-compliant nature of the swap-based derivative structure………Full Article: Source