Is SP Funds S&P 500 Sharia ETF (SPUS) Halal?
SP Funds S&P 500 Sharia ETF (SPUS) · SPUS · NYSE Arca
SPUS is Shariah-compliant by design. It tracks a Shariah-screened version of the S&P 500 — holding the constituents that pass sector and AAOIFI financial-ratio screens (around 200+ companies), weighted by market cap — under the supervision of a Shariah board. It is the closest thing to a 'halal S&P 500'. As with any screened fund, a small residual amount of non-compliant income remains, which the fund discloses as a purification ratio (recently ~2% of dividends) for investors to donate.
Screening basis: AAOIFI Shariah standards · Last reviewed 2026-06-15
Is SP Funds S&P 500 Sharia ETF (SPUS) Halal?
SPUS is Shariah-compliant by design. It tracks a Shariah-screened version of the S&P 500 — holding the constituents that pass sector and AAOIFI financial-ratio screens (around 200+ companies), weighted by market cap — under the supervision of a Shariah board. It is the closest thing to a 'halal S&P 500'. As with any screened fund, a small residual amount of non-compliant income remains, which the fund discloses as a purification ratio (recently ~2% of dividends) for investors to donate.
Our Analysis
SPUS is, in effect, the answer to the 'is the S&P 500 halal?' question. SP Funds built it to track a Shariah-screened version of the S&P 500: start with the index, then remove every company in an impermissible sector (conventional finance, alcohol, gambling, tobacco, adult entertainment) and every company that breaches the AAOIFI financial-ratio limits on interest-bearing debt and interest income. What remains — a little over 200 companies, weighted by market cap and tilted toward large-cap technology — is the compliant subset, and that is what you own when you buy SPUS.
What makes it genuinely halal rather than merely marketed as such is the governance. A Shariah supervisory board reviews and approves the screening methodology before it is applied, audits the holdings on an ongoing basis, and — crucially — publishes a purification ratio. No screened equity fund is perfectly pure, because even compliant companies earn a little interest on their cash; the honest, scholarly approach is to disclose that residual and tell investors how much to donate. SPUS's purification ratio has recently run around 2% of dividends.
The practical trade-offs are cost and concentration. SPUS charges roughly 0.49% versus 0.03% for a conventional S&P 500 fund, and because screening removes financials and over-leveraged names, the portfolio is more concentrated and more technology-heavy than the headline index. For most Muslim investors seeking passive, diversified U.S. large-cap exposure, that is a reasonable price for compliance — and it is why SPUS, alongside Wahed's HLAL, is one of the two default building blocks of a halal U.S. equity portfolio. Apply the purification ratio, avoid margin and short-selling, and treat it as a long-term holding.
Business Activity Screen
A passive ETF (listed Dec 2019, NYSE Arca) tracking a Shariah-screened version of the S&P 500: it holds the S&P 500 companies that pass the S&P Dow Jones Shariah sector and financial-ratio screens, weighted by market cap. Top holdings are large-cap technology names (Apple, Nvidia, Microsoft, Amazon, Meta).
Companies in impermissible sectors (conventional finance, alcohol, gambling, tobacco, adult entertainment) and those breaching AAOIFI debt/interest-income limits are removed. A Shariah supervisory board reviews and approves the methodology and audits holdings; the fund publishes an annual purification ratio for the small residual non-compliant income.
Scholars' & Screeners' Positions
Published positions, cited as stated. Screeners can reach different conclusions on the same company because of ratio timing and methodology differences — we report the disagreement rather than flatten it.
SP Funds Shariah Supervisory Board
Reviews and approves the S&P Dow Jones Shariah screening methodology, audits the portfolio, and certifies SPUS as Shariah-compliant, with a published purification ratio for residual income.
Source →Mainstream view
A Shariah-screened index ETF that removes impermissible sectors, applies AAOIFI/S&P ratio screens, and provides purification guidance is permissible passive exposure for Muslim investors (subject to performing the purification and avoiding leverage/short-selling).
Source →
Purification
SPUS holds screened companies that still earn small amounts of incidental interest on corporate cash, so the fund publishes an annual purification ratio (recently around 2% of distributions). Donate that percentage of your dividends to charity to cleanse the residual non-compliant income — our purification calculator automates the math.
Purification calculatorKeep your portfolio halal
A pass today isn't a pass forever — ratios drift across thresholds between filings. A halal screener monitors holdings continuously.
Related guides
Consider Consulting an Islamic Scholar
Major whether SP Funds S&P 500 Sharia ETF (SPUS) is halal decisions often involve nuances that vary by scholarly opinion and personal circumstance. While HalalWallet provides educational comparisons and tools, we are not scholars or financial advisors. For personal guidance on Shariah compliance, consider speaking with a qualified Islamic scholar, your local imam, or a Shariah-certified financial advisor familiar with your situation.
Important: HalalWallet is an educational comparison platform. We do not provide financial, legal, or religious advice.
Product structures and Shariah-compliance oversight vary by provider. Before applying:
- Verify halal compliance directly with the provider.
- Review the contract structure (Murabaha, Ijara, Musharakah, etc.) and any disclosed Shariah board opinions.
- Consult a qualified Islamic finance advisor or scholar for guidance on your individual circumstances.
Frequently Asked Questions
Sources and review process
This page is reviewed against HalalWallet editorial standards and source documentation.
Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-06-01
- SP Funds — SPUS S&P 500 Sharia ETF (methodology, Shariah board, purification)
- AAOIFI Shariah Standard No. 21 (investment in shares)
- Wahed — what makes an ETF halal (standard S&P 500 ETFs are not)
- HalalWallet Methodology
- HalalWallet Editorial Policy
- Halal Stock Screening Methodology (AAOIFI)
- Why Halal Stock Screeners Disagree
- Halal Stock Screeners Compared
- SPUS vs HLAL — Halal ETF Comparison
- HalalWallet Methodology
- Editorial Policy
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