What is the best halal ETF for beginners?

SP Funds S&P 500 Sharia Industry Exclusions ETF (SPUS) and Wahed FTSE USA Shariah ETF (HLAL) are the most popular options. Both provide broad U.S. equity exposure with Shariah compliance. SPUS tracks a Shariah-compliant version of the S&P 500, while HLAL tracks a broader FTSE index.

How much does it cost to invest in halal ETFs?

Halal ETFs typically charge 0.45–0.50% in annual expense ratios. On a $10,000 investment, that's about $45–50 per year in fees — significantly less than actively managed halal mutual funds which often charge 0.75–1.25%.

Do I need a special account to buy halal ETFs?

No. You can buy halal ETFs through any standard brokerage account — Fidelity, Schwab, Vanguard, Robinhood, etc. You can also buy them inside an IRA or Roth IRA for retirement investing.

How many halal ETFs do I need for diversification?

A simple two-fund portfolio (U.S. halal equity ETF + international halal equity ETF) provides excellent diversification. Adding a gold ETF or sukuk fund can further reduce volatility. You don't need more than 3–4 funds for a well-diversified portfolio.

Investing StrategiesDiversified ETFs

Strategy Guide

Diversified Long-Term Growth

Build a diversified portfolio of Shariah-compliant index ETFs for steady, long-term wealth building. The most popular approach for Muslim investors in the U.S.

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How It Works

Choose a brokerage or platform

Open an account at any major brokerage (Fidelity, Schwab, etc.) or a halal-focused platform like Wahed or Zoya. Most have $0 account minimums.

Select halal ETFs

Pick from Shariah-compliant index ETFs like SPUS (S&P 500 Shariah), HLAL, or UMMA. These hold hundreds of pre-screened companies in one fund.

Set your allocation

Decide how much to put in U.S. equities, international equities, and sukuk/gold. Your allocation depends on your risk tolerance and time horizon.

Invest regularly and rebalance annually

Set up automatic contributions and rebalance once or twice a year. The key is consistency — time in the market beats timing the market.

Why Choose This Strategy?

Lowest fees of any halal investing approach (0.45–0.50% expense ratios)

Broad market diversification reduces single-stock risk

Simple to manage — buy, hold, and rebalance annually

Best for: Most investors — especially those with a 7+ year time horizon

Things to consider ▾

• Market downturns will affect your portfolio in the short term

• Halal ETFs exclude financials and some sectors, creating natural tilts

Diversified halal ETF investing is the most straightforward way for Muslim investors to grow wealth in the stock market. Instead of picking individual stocks, you buy a single fund that holds hundreds of Shariah-compliant companies.

The most popular halal ETFs track Shariah-compliant versions of major indices like the S&P 500. Companies are screened for both business activity (no alcohol, gambling, conventional finance, etc.) and financial ratios (debt levels, interest income percentages) to ensure compliance.

The biggest advantage of this approach is simplicity and cost. With expense ratios around 0.45–0.50%, halal ETFs cost a fraction of actively managed funds. You get broad diversification automatically, reducing the risk that any single stock hurts your portfolio.

The main trade-off is that halal ETFs exclude financial sector stocks and other non-compliant industries, creating natural sector tilts. This means your performance will differ from the overall market — sometimes better, sometimes worse.

Example Portfolio Allocation

Example Halal Portfolio

Balanced Long-Term

Halal Equity ETFs

Core growth engine65%

Sukuk / Halal Fixed Income

Income & diversification20%

Gold

Inflation hedge10%

Cash / Money Market

Liquidity5%

This is an illustrative example only and does not constitute financial or investment advice. Actual allocations should be determined with a qualified financial advisor based on your individual circumstances. Past performance does not guarantee future results.

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Frequently Asked Questions

Related Strategies

Hands-Off Managed Investing

Let experts build and manage your halal portfolio for you

Halal Retirement Investing

Build a Shariah-compliant retirement portfolio (IRA / 401k)

Ready to get started?

Compare the best halal products for this strategy, or take our quiz to find a personalized plan.

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Reviewed by: HalalWallet Editorial Team•Last reviewed: 2026-03-09•Disclosure: Featured partners may compensate HalalWallet for clicks. Editorial policy and full disclosures.

Sources and review process

This page is reviewed against HalalWallet editorial standards and source documentation.

Reviewed by: HalalWallet Editorial Team

Last reviewed: 2026-03-09