Muslim investors searching for halal investment options in the United States often encounter two well-known names: SP Funds and the Amana Funds.
SP Funds manages the SPUS ETF, while Saturna Capital manages the Amana mutual funds. Both aim to provide investment products that comply with Islamic finance principles by screening companies for Sharia compliance.
However, the two options differ in important ways including fund structure, investment strategy, and how investors access them.
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Quick Comparison: SPUS vs Amana Funds
- SPUS: Exchange-traded fund (ETF) managed by SP Funds
- Amana Funds: Actively managed halal mutual funds managed by Saturna Capital
- SPUS tracks a Sharia-screened index of U.S. equities
- Amana funds are actively managed portfolios that follow Islamic screening criteria
SPUS Overview
SPUS is the SP Funds S&P 500 Sharia Industry Exclusions ETF. The fund attempts to track the performance of a Sharia-screened index that excludes companies involved in activities considered impermissible under Islamic finance principles.
Companies typically excluded include businesses involved in alcohol, gambling, conventional financial services, pork production, and other prohibited industries.
In addition to sector exclusions, the index applies financial ratio screens designed to limit excessive debt or interest-based income.
You can read a deeper breakdown here:
Amana Funds Overview
The Amana funds are a group of halal mutual funds managed by Saturna Capital. These funds were among the earliest Islamic investment products available to Muslim investors in the United States.
The two main funds commonly discussed are Amana Growth Fund and Amana Income Fund.
Unlike SPUS, which tracks an index, Amana funds are actively managed portfolios. Fund managers select investments that meet Islamic screening criteria while also attempting to achieve long-term investment growth.
ETF vs Mutual Fund Structure
One of the biggest differences between SPUS and the Amana funds is the investment structure.
SPUS is an exchange-traded fund (ETF), which means investors buy and sell shares on the stock market during trading hours.
Amana funds are mutual funds, which means transactions occur directly with the fund company and are typically priced once per day after markets close.
Each structure has advantages depending on an investor’s goals, trading preferences, and investment strategy.
Sharia Screening Process
Both SPUS and the Amana funds apply Sharia screening criteria to determine which companies may be included in their portfolios.
These screening processes generally evaluate two main factors.
- Business activity screening to exclude prohibited industries
- Financial ratio screening to limit excessive debt and interest income
You can learn more about these screening rules here:
Investment Strategy Differences
Because SPUS tracks an index, its holdings generally reflect the composition of the underlying Sharia-screened benchmark.
Amana funds are actively managed, meaning portfolio managers select investments based on both Sharia compliance and investment strategy.
Active management can allow managers to adjust holdings based on market conditions, while index-tracking ETFs focus on replicating the performance of the index.
When SPUS May Be a Better Fit
- You prefer an ETF structure
- You want a passive index-tracking strategy
- You want a halal ETF available through most brokerage accounts
When Amana Funds May Be a Better Fit
- You prefer actively managed funds
- You want a longer track record in Islamic investing
- You prefer a mutual fund investment structure
Frequently Asked Questions
Are SPUS and Amana funds halal?
Both funds apply Islamic screening criteria designed to exclude companies involved in prohibited activities and to limit excessive debt or interest income.
Which fund is more popular?
Both have strong recognition among Muslim investors. Amana funds have existed for decades, while SPUS has grown rapidly as halal ETFs become more widely available.
Can you invest in both?
Yes. Some investors include both ETFs and mutual funds in their portfolio depending on their diversification strategy.
The Bottom Line
SPUS and the Amana funds are two well-known halal investment options available to Muslim investors in the United States.
SPUS offers an ETF structure that tracks a Sharia-screened index, while the Amana funds provide actively managed halal mutual funds.
Understanding the differences between ETF and mutual fund structures can help investors decide which option fits their investment goals.
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