New to this? How super actually works covers the background this guide assumes, as part of the course.

Every default super option in Australia (the "Balanced" or "Growth" option your employer enrolled you into without asking) holds a mix of bank shares, government bonds, corporate debt, and diversified equity funds. Under AAOIFI screening, that combination fails on multiple fronts at once: bank and insurance shares fail the business-activity test outright, bonds are interest-bearing debt instruments by definition, and the equity component isn't screened for Shariah compliance at all. There's no scenario where a default balanced option passes.

That doesn't mean the fix is switching your entire super to one of the dedicated Islamic funds. It might be. See our super fund comparison for what Salaam, Hejaz and Meezan actually offer, including the fact that Hejaz is currently not accepting new members. But there's a cheaper option worth checking first.

Ask your current fund about a member-direct option

A number of large industry super funds (the kind with hundreds of billions under management) let members self-select individual investments inside their existing account, often including specific ETFs, through a "member direct" or "direct investment" option. If your fund offers this and lists a Shariah-screened ETF among the choices, you can redirect part or all of your balance into it without leaving the fund, keeping your existing insurance cover and avoiding a full switch. Not every fund offers this, and not every fund that does includes a Shariah option. You have to ask directly, because it's rarely advertised as a feature.

What to actually do: (1) Call your current fund and ask if a member-direct or direct-investment option exists, and whether any Shariah-compliant or Islamic-screened investment option is available inside it. (2) If not, compare the three dedicated funds. (3) Before switching anything, confirm what insurance cover you'd lose and what it would cost to replace.

One more thing worth knowing: "ethical" or "socially responsible" super options are not the same thing as Shariah-compliant. ESG screens exclude things like tobacco and thermal coal but do nothing about interest-bearing debt or conventional banking. An ethical option can still fail an AAOIFI screen completely. Don't assume the two labels mean the same thing.

Note that super is a separate question from zakat. See our zakat on ASX shares guide if you're trying to work out what you owe on shares you hold directly, outside super.