Disclosure: This article may contain affiliate links. It is general information, not investment advice.
Quick answer: Conventional ETFs usually hold some non-compliant companies, so they aren’t halal as-is. But Shariah-compliant ETFs and index funds exist and are screened for you. Popular US-listed halal ETFs include SPUS (SP Funds S&P 500 Sharia), HLAL (Wahed FTSE USA Shariah), UMMA (Wahed Dow Jones Islamic World), SPRE (halal REIT), and SPSK (sukuk / Islamic bonds). The long-running Amana Funds are Shariah-compliant mutual funds. These let you invest in a diversified, screened portfolio without checking every stock yourself.
For many Muslims, a halal ETF is the simplest way to invest: you get instant diversification, automatic Shariah screening, and — in most funds — purification handled at the fund level.
Why aren’t normal ETFs halal?
A conventional S&P 500 ETF holds all 500 companies, including conventional banks, alcohol makers, and other non-compliant businesses. Because you’d own a slice of impermissible companies and their interest-based income, standard ETFs aren’t considered halal as they are. Shariah-compliant ETFs solve this by screening out non-compliant holdings.
Popular halal ETFs for US investors
| Fund | Ticker | What it holds |
|---|---|---|
| SP Funds S&P 500 Sharia | SPUS | Shariah-screened large-cap US companies |
| Wahed FTSE USA Shariah | HLAL | Shariah-compliant US equities |
| Wahed Dow Jones Islamic World | UMMA | Global Shariah-compliant equities |
| SP Funds S&P Global REIT Sharia | SPRE | Shariah-compliant real estate |
| SP Funds Dow Jones Global Sukuk | SPSK | Sukuk (Islamic fixed income) |
| Amana Funds (Saturna) | — | Long-running Shariah-compliant mutual funds |
Tickers and fund details can change; verify current holdings, expense ratios, and availability with your broker before investing.
How do halal ETFs stay Shariah-compliant?
Halal funds apply the same screening used for individual stocks — a permissible business-activity screen plus financial-ratio limits on debt and interest income — and rebalance as companies fall in or out of compliance. Most funds also handle purification at the fund level, cleansing the small amount of impermissible income so you don’t have to calculate it yourself.
How to invest in halal ETFs
- Open a brokerage account that lists US ETFs (most major US brokers do).
- Search the ticker (e.g., SPUS or HLAL) and review the fund’s holdings and expense ratio.
- Decide between a US-only fund (SPUS/HLAL) and a global one (UMMA) for diversification.
- Consider adding sukuk (SPSK) for lower-volatility, income-style exposure.
- Invest regularly and hold for the long term rather than trading in and out.
Halal ETF or robo-advisor?
If you want a fully hands-off option, a Shariah-compliant robo-advisor builds and rebalances a portfolio for you. If you prefer control and lower fees, buying halal ETFs directly is often cheaper. Many investors combine both. New to screening? Start with the best halal stock screeners.
Want to start investing the halal way? Compare Shariah-compliant funds and robo-advisors and open an account in minutes. Explore halal investing options →
Frequently asked questions
Are ETFs halal?
Conventional ETFs are generally not halal because they hold non-compliant companies. Shariah-compliant ETFs like SPUS, HLAL, and UMMA are screened and permissible.
What is the best halal ETF?
It depends on your goal: SPUS and HLAL for US equities, UMMA for global exposure, SPRE for real estate, and SPSK for sukuk. Compare holdings and expense ratios.
Do halal ETFs handle purification?
Most Shariah-compliant funds purify impermissible income at the fund level, so you generally don’t need to calculate it yourself. Confirm in the fund documents.
Can I buy halal ETFs in a normal US brokerage?
Yes. Halal ETFs such as SPUS and HLAL are listed on US exchanges and can be bought through most standard US brokers.
This is general information, not investment or religious advice. Verify current fund details and consult a qualified scholar and licensed advisor. Reviewed by Mohamed Allan.
