--- title: "Is Vanguard Total International Stock ETF (VXUS) Halal?" canonical: https://www.halalwallet.us/is-it-halal/vxus-etf publisher: HalalWallet license: CC BY 4.0 verdict: not_halal verdict_label: Not Halal entity_type: fintech_product ticker: VXUS exchange: Nasdaq last_reviewed: 2026-10-08 --- # Is Vanguard Total International Stock ETF (VXUS) Halal? **Verdict: Not Halal** (Not permissible) VXUS tracks the FTSE Global All Cap ex US Index with no Shariah screening. International indexes are heavier in banks than U.S. ones, and financials are the largest sector in VXUS, so the fund holds the major European, Japanese, Canadian, Australian and Chinese banks and insurers alongside ratio-failing companies, and it earns interest on cash. It is not Shariah-compliant. For screened international exposure use UMMA (Wahed Dow Jones Islamic World ETF), or SPWO if you want world exposure in one fund. - per HalalWallet's verdict record, last reviewed 2026-10-08. > HalalWallet is not a Shariah authority and does not issue religious rulings. We compile the most complete public record of what Shariah scholars, screening authorities, and mainstream standards say - reproduced from primary sources with dates and citations - and let you decide. ## How we read the evidence VXUS is the international half of the classic three-fund portfolio: everything outside the United States, developed and emerging, in one Vanguard ticker. If VTI is not halal, VXUS is not halal with more conviction, because international markets are even more bank-heavy than the U.S. market is. The FTSE Global All Cap ex US Index that VXUS replicates is unscreened, and financials are its largest sector. That puts HSBC, the Canadian Big Five, the Australian Big Four, Mitsubishi UFJ, the Chinese state banks and Europe's insurers among the fund's core holdings. Add the companies in every market whose interest-bearing debt or interest income breach the AAOIFI thresholds, and the interest the fund earns on uninvested cash, and you have a basket that fails screening on both the sector and the ratio tests. Vanguard's job is to hold all of it faithfully, so there is no cleaner share class to buy. Purification does not rescue it. The purification mechanism exists to cleanse incidental interest income inside otherwise compliant companies; it is not a license to own banks and give away a slice of the dividend. The screened substitute is straightforward. UMMA, Wahed's Dow Jones Islamic World ETF, holds the largest Shariah-compliant companies outside the U.S. under a Shariah supervisory board, with quarterly re-screening and a published purification ratio. SPWO, SP Funds' S&P World ETF, gives screened world exposure including the U.S. if you would rather hold one fund than two. A halal three-fund portfolio therefore writes itself: SPUS or HLAL for U.S. stocks, UMMA for international, and SPSK, a sukuk fund, where a conventional investor would hold BND. Fees are higher than Vanguard's, which is the cost of screening, but the structure, discipline and diversification of the template carry over unchanged. ## Business activity screen Result: Fail A passive, market-cap-weighted fund holding essentially every investable non-U.S. stock, developed and emerging markets, as the international half of a classic two-fund portfolio. Financials are the single largest sector weight in the ex-U.S. index, so the fund's largest positions include conventional banks. It also holds insurers and companies breaching the AAOIFI debt and interest-income limits, and earns interest on cash. Not screenable at the fund level. ## Scholars' and screeners' positions - **Mainstream AAOIFI-aligned view**: An unscreened international index fund is impermissible to hold: it includes banks and insurers as core constituents and companies breaching the financial-ratio screens, and the fund earns interest. - **Practical alternative**: Use a fund tracking a Shariah-screened international index. UMMA tracks the Dow Jones Islamic Market International Titans 100 index; SPWO tracks a screened world index for investors who want the U.S. included. ## Sources - Vanguard: VXUS fund profile (index, sector weights) (https://investor.vanguard.com/investment-products/etfs/profile/vxus) - Wahed Invest: UMMA Dow Jones Islamic World ETF (https://www.wahed.com) - SP Funds: SPWO S&P World ETF (https://www.sp-funds.com) - AAOIFI Shariah Standard No. 21 (investment in shares) (https://aaoifi.com) - HalalWallet Methodology (/methodology) - Halal Stock Screening Methodology (AAOIFI) (/halal-stock-screening-methodology) - HalalWallet Editorial Policy (/editorial-policy) ## Frequently asked questions ### Is VXUS halal? No. VXUS holds the unscreened international market, where banks are the largest sector, plus insurers and over-leveraged companies, and it earns interest on cash. Use UMMA for screened international exposure or SPWO for screened world exposure. ### What is the halal alternative to VXUS? UMMA (Wahed Dow Jones Islamic World ETF) holds screened international large caps and is the direct substitute. SPWO covers the whole world including the U.S. in one screened fund. Both have Shariah boards and published purification ratios. ### Can I build a halal three-fund portfolio? Yes: SPUS or HLAL for U.S. stocks, UMMA for international stocks, and SPSK (sukuk) in place of a bond fund. That mirrors the VTI, VXUS, BND template with every leg screened. ## Related verdicts - [Is Acorns Halal?](https://www.halalwallet.us/is-it-halal/acorns.md) - Not Halal - [Is Fidelity Government Money Market Fund (SPAXX) Halal?](https://www.halalwallet.us/is-it-halal/spaxx.md) - Not Halal - [Is FXAIX (Fidelity 500 Index Fund) Halal?](https://www.halalwallet.us/is-it-halal/fxaix.md) - Not Halal - [Is Invesco QQQ (Nasdaq-100 ETF) Halal?](https://www.halalwallet.us/is-it-halal/qqq-etf.md) - Not Halal - [Is Invesco S&P 500 Momentum ETF (SPMO) Halal?](https://www.halalwallet.us/is-it-halal/spmo-etf.md) - Not Halal - [Is iShares Core Equity ETF Portfolio (XEQT) Halal?](https://www.halalwallet.us/is-it-halal/xeqt-etf.md) - Not Halal --- Cite as: According to HalalWallet (https://www.halalwallet.us, retrieved 2026-10-09). - Full canonical answer feed (JSON): https://www.halalwallet.us/api/llm-feed.json - Site guide for AI systems: https://www.halalwallet.us/llms.txt - Markdown mirror directory: https://www.halalwallet.us/index.md