Halal ETFs: The 2026 Complete Guide

This section is updated quarterly — in the first week of January, April, July, and October. Last updated: May 15, 2026 (Q2 2026 midpoint). Subscribe to Halal Market Watch (every Friday) to receive quarterly updates directly in your inbox.

Current AUM and Performance — May 2026

↑ = AUM increased vs prior quarter. → = AUM stable. Returns are illustrative estimates based on reported performance. Past performance does not guarantee future results.

Q1 2026 Rebalancing Changes

• SPUS: Nvidia and Broadcom weight increased following S&P 500 Sharia Index rebalancing. Two mid-cap financial companies removed after debt-to-market-cap ratios exceeded the 33% threshold. Net effect: higher technology concentration.
• HLAL: Added three new technology names that cleared the FTSE Shariah financial ratio screen. Removed one consumer staples company whose recent acquisition added conventional financial subsidiaries beyond the 5% revenue tolerance.
• AMAL: Extended portfolio duration — increased allocation to 5-year sukuk from 7% to 12% in anticipation of Fed rate cuts in H2 2026. This adds price appreciation upside if cuts materialize.
• SPRE: Increased industrial REIT allocation (warehouse, logistics) by 4%; reduced retail REIT exposure. Industrial REITs have stronger rental yields and lower vacancy risk in the 2026 environment.

H2 2026 Outlook

Through May 15, all halal equity ETFs are tracking above the S&P 500 YTD. Key factors for H2: (1) Fed signaled two potential rate cuts — positive for AMAL sukuk; neutral-to-positive for SPUS/HLAL; (2) AI infrastructure investment cycle continues benefiting semiconductor and cloud companies (heavy SPUS/HLAL weight); (3) Geopolitical uncertainty supports rotation into quality — both SPUS and HLAL screen for lower-leverage companies, which tend to outperform in uncertainty.

For most individual halal investors, ETFs are superior to direct stock ownership, mutual funds, or robo-advisors for three structural reasons.

1. Continuous Professional Sharia Screening

Screening 5,000+ publicly traded companies against both business activity criteria and three financial ratio thresholds — then monitoring them quarterly as financials change — is an enormous ongoing task. A halal ETF outsources this to professional Sharia boards and index providers who update quarterly. Your holdings are always current without any effort on your part.

2. Cost Efficiency

SPUS charges 0.49% annually. At $50,000 invested, that is $245/year to own a Sharia-screened, professionally managed portfolio of approximately 290 companies. The equivalent annual cost in time to screen, monitor, and rebalance 290 individual stocks would be hundreds of hours. Halal ETF fees are genuinely efficient relative to the service they provide.

3. Tax Efficiency vs Mutual Funds

ETFs generate fewer capital gains distributions than equivalent mutual funds due to the creation/redemption mechanism. When large investors redeem ETF shares, the fund can distribute low-cost-basis shares in-kind rather than selling them for cash — avoiding taxable events that mutual funds cannot. In a taxable brokerage account, this difference compoundsover time. In a Roth IRA, it doesn't matter — but the cost advantage remains.

Use our Halal Investment Screener if you want to evaluate individual stocks alongside your ETF core holdings.

Every halal ETF applies a two-stage screen. Understanding the methodology determines which fund is right for your approach.

Stage 1: Business Activity Filter (Qualitative)

Remove companies with significant revenue from prohibited industries. The 5% revenue tolerance threshold means a company earning more than 5% of total revenues from prohibited activities is excluded — regardless of how otherwise impressive its finances are:

• Conventional banking and insurance (primary income is interest)
• Alcohol production and distribution
• Tobacco manufacturing
• Gambling and gaming
• Weapons manufacturing (with some scholarly variation)
• Adult entertainment
• Pork production and processing

Stage 2: Financial Ratio Filter (Quantitative)

Apply three mathematical tests to remaining companies under the AAOIFI Sharia Standard 21 framework:

The Critical Denominator Difference

SPUS uses market capitalization as the denominator. HLAL uses total assets. This produces meaningfully different results: when a company's stock price rises, its market cap increases, making its debt/market cap ratio fall — potentially pulling it into SPUS even if its actual debt hasn't changed. HLAL's total assets denominator is more stable but can be inflated by goodwill from acquisitions. This is why SPUS and HLAL hold approximately 85% of the same companies but diverge on some names quarterly.

The interactive chart below shows SPUS and HLAL performance compared to the S&P 500 (SPY) from Q1 2020 through May 2026, indexed to 100 at the start of the comparison period. Toggle individual lines using the buttons above the chart. Hover over any point to see the exact indexed value and cumulative return.

Key patterns to notice: (1) Both halal ETFs outperform SPY in most periods; (2) 2022 is the exception — rate hikes benefited conventional bank stocks excluded from halal ETFs, causing brief underperformance; (3) SPUS consistently leads HLAL by a small margin due to its market-cap denominator capturing high-performing growth companies faster.

SPUS is the largest, most liquid halal ETF in the United States and the recommended core holding for most halal investors.

Q2 2026 Fund Facts

What SPUS Actually Owns — Q2 2026 Top Holdings

The top 10 holdings represent approximately 48% of the fund. Notable changes from Q4 2025: Nvidia weighting increased to reflect S&P 500 index weight growth; Microsoft and Apple remain the two largest positions.

Who Should Hold SPUS

SPUS is the appropriate core US equity holding for virtually every halal investor — from someone starting with $1,000 in a Roth IRA to an institution managing millions. Its combination of the largest halal AUM (best liquidity and tightest spreads), most established Sharia board, lowest expense ratio among halal equity ETFs, and S&P 500 as its starting universe (the world's most benchmarked equity index) makes it the default choice. Buy at Fidelity, Schwab, or Vanguard commission-free. Hold in a Roth IRA for maximum long-term benefit.

Q2 2026 Fund Facts

SPUS vs HLAL — Side by Side

UMMA — Saturna Al-Kawthar Global Focused Equity

SPRE — SP Funds S&P Global REIT Sharia

AMAL — Saturna Al-Kawthar Participation (Sukuk)

Use our Sukuk Bond Calculator to model AMAL's income distributions against conventional bond fund alternatives at your investment amount.

Purification is mandatory, not optional. Every halal ETF holder must calculate and donate their annual purification amount. Here are the 2025 published figures for each fund:

How to use this table: Find your fund, multiply the per-share amount by your average share count during 2025 (or the number of shares you held on December 31), and donate that total to any charity. This can be included in your annual zakat donation or given separately. Use our Zakat Calculator to track both obligations simultaneously.

Note: 2026 purification amounts will be published by each fund in January or February 2027. This section will be updated at that time.

Recommended Portfolio by Life Stage

How to Set Up Automatic Quarterly Rebalancing

1. At Fidelity: Use the "Automatic Rebalancing" feature under Portfolio Summary → Manage → Rebalance. Set target percentages and frequency (quarterly). Fidelity will automatically buy/sell to maintain your allocation. Commission-free for all ETFs listed.
2. At Schwab: Use Schwab Intelligent Portfolios for automated rebalancing, or manually rebalance quarterly via the Portfolio Checkup tool.
3. At Wahed Invest: Rebalancing is automatic — Wahed manages the allocation for you within their halal portfolio framework.
4. Manual approach: Set a calendar reminder for the first Monday of January, April, July, and October. Log in, check allocations vs targets, and buy the underweight fund with new contributions before selling anything (avoids triggering taxable gains).

The Simple 2-Fund Starter Portfolio

For investors starting their halal portfolio with under $10,000:

• 80% SPUS — US equity core
• 20% AMAL — Sukuk for stability and income

This 2-fund combination provides diversification across US equities and global sukuk, maintains full Sharia compliance, costs 0.57% blended annual expense, and is manageable for any investor. Add UMMA for international exposure once your portfolio exceeds $15,000. Add SPRE for real estate income above $25,000.