Best Halal ETFs for 2026
Complete analysis and comparison of Shariah-compliant ETFs and funds for Islamic investors
Halal ETF Quick Comparison
Performance figures are approximate and may not reflect current values. Always verify with the fund provider before investing. Past performance does not guarantee future results.
| ETF / Fund | Expense Ratio | AUM | Holdings | Type | Action |
|---|---|---|---|---|---|
SPUS SP Funds S&P 500 Shariah Industry Exclusions ETF | 0.45% | $2.04B | 214 | Index-based | Visit Fund → |
HLAL Wahed FTSE USA Shariah ETF | 0.50% | $752M | 199 | Index-based | Visit Fund → |
AMAGX Amana Growth Fund (Mutual Fund) | ~1.0% | ~$2B | ~35 | Actively managed | Visit Fund → |
IGDA Invesco Dow Jones Islamic Global Developed Markets UCITS ETF | 0.50% | See fund provider | See fund provider | Index-based | Visit Fund → |
Detailed ETF Analysis
SPUS
SP Funds S&P 500 Shariah Industry Exclusions ETF
Top Holdings
Pros
- ✓Low tracking error
- ✓Established index
- ✓Strong AUM growth
Cons
- −US-focused only
- −Tech-heavy exposure
- −No international diversification
HLAL
Wahed FTSE USA Shariah ETF
Top Holdings
Pros
- ✓Good diversification
- ✓Active marketing
- ✓Growing AUM
Cons
- −Tech-heavy
- −Newer track record
- −US-focused
AMAGX
Amana Growth Fund (Mutual Fund)
Top Holdings
Pros
- ✓Longest track record (30+ years)
- ✓Active management
- ✓Established brand
Cons
- −Higher expense ratio than ETFs
- −Concentrated portfolio
- −Mutual fund structure (not ETF)
IGDA
Invesco Dow Jones Islamic Global Developed Markets UCITS ETF
Top Holdings
Pros
- ✓True Islamic screening
- ✓Global developed markets exposure
- ✓Dow Jones Islamic methodology
Cons
- −UCITS structure (European)
- −May have limited liquidity in US markets
- −Currency exposure for US investors
Sector Allocation Comparison
| Sector | SPUS | HLAL | AMAGX | IGDA |
|---|---|---|---|---|
| Technology | 28% | 35% | 45% | 25% |
| Healthcare | 15% | 12% | 8% | 18% |
| Industrials | 12% | 15% | 12% | 14% |
| Consumer Discretionary | 18% | 20% | 25% | 16% |
| Communication | 8% | 10% | 0% | 12% |
| Energy | 0% | 0% | 0% | 3% |
How to Choose the Right Halal ETF
For New Investors
If you're new to halal investing, start with HLAL for its broader exposure and strong track record, or SPUS for closer S&P 500 tracking.
- • Start with $1,000+ investment
- • Consider dollar-cost averaging
- • Review holdings quarterly
- • Reinvest dividends
For Active Investors
Consider AMAGX for active management and potential alpha, but be prepared for higher fees and concentration risk.
- • Monitor fund manager decisions
- • Compare against benchmark regularly
- • Consider tax implications
- • Diversify across strategies
Frequently Asked Questions
What makes an ETF halal or Shariah-compliant?
Halal ETFs screen out companies involved in prohibited activities (alcohol, gambling, conventional banking, tobacco, weapons) and those with excessive debt ratios (typically over 33% debt-to-market cap). Holdings are monitored and rebalanced regularly by a Shariah advisory board.
What is the difference between SPUS and HLAL?
SPUS (SP Funds) tracks the S&P 500 Shariah Index with 214 holdings and a 0.45% expense ratio, while HLAL (Wahed) tracks the FTSE USA Shariah Index with 199 holdings and a 0.50% expense ratio. SPUS is the larger fund by AUM ($2B+) and tracks more closely to the S&P 500, while HLAL has slightly different sector weightings.
Are halal ETFs tax-efficient?
Yes, ETFs like SPUS and HLAL offer the same tax advantages as conventional ETFs, including lower capital gains distributions compared to mutual funds like AMAGX. Their creation/redemption mechanism minimizes taxable events.
Can I buy halal ETFs in my IRA or Roth IRA?
Yes. SPUS, HLAL, and other halal ETFs trade on major U.S. exchanges and can be held in any standard brokerage account including Traditional IRA, Roth IRA, SEP IRA, and 401k accounts that offer a brokerage window.
Can I buy fractional shares of halal ETFs?
Most major brokers (Fidelity, Charles Schwab, M1 Finance) now offer fractional shares of ETFs, making it easier to invest small amounts in halal funds. This means you can start investing in SPUS or HLAL with as little as $1.
Do halal ETFs underperform conventional ETFs?
Performance varies by market cycle. Halal ETFs tend to have lower exposure to financial services and higher exposure to tech, which can lead to outperformance in tech-driven markets. Historical data shows halal ETFs tracking closely with conventional benchmarks over multi-year periods.
How often are halal ETF holdings rebalanced?
Most halal ETFs rebalance quarterly or semi-annually when their underlying index is reconstituted. During rebalancing, companies that no longer meet Shariah screening criteria are removed and compliant replacements are added. This ensures ongoing Shariah compliance.
Ready to Start Halal Investing?
Compare halal investment platforms and find the right broker for your needs.
Compare Halal Investment PlatformsQuick Answer
Halal ETFs are exchange-traded funds that only hold Shariah-compliant stocks, screened to exclude companies involved in alcohol, gambling, tobacco, weapons, and interest-based finance. Top halal ETFs in the U.S. include SPUS, HLAL, and UMMA.
Key Takeaways
- Halal ETFs screen holdings using AAOIFI or similar Shariah standards
- Expense ratios for halal ETFs are generally comparable to conventional ESG ETFs — check each fund's current prospectus for exact fees
- SPUS (SP Funds S&P 500) and HLAL (Wahed FTSE USA) are the two largest by AUM
- All listed ETFs trade on major U.S. exchanges with standard brokerage accounts
Reviewed monthly and updated when ETF holdings, fee disclosures, or screening references change.
Sources and review process
This page is reviewed against HalalWallet editorial standards and source documentation.
Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-02-14
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