Is HLAL halal?

HLAL tracks the FTSE USA Shariah Index, which FTSE Russell constructs by screening the broad FTSE USA universe (itself a large and mid-cap US equity benchmark) for Shariah compliance. Because FTSE's starting universe extends further down the market-cap spectrum than the S&P 500, HLAL ends up with somewhat more mid-cap names than SPUS, even though the largest technology companies still dominate the weighting. NVIDIA, Apple, and Microsoft together account for roughly 31% of the fund as of mid-2026, with Alphabet's two share classes and Broadcom rounding out a heavily technology-weighted top ten. Like other Shariah-compliant US equity funds, HLAL holds no banks, insurers, or other conventional financial companies, since those fail the interest-based-income screen before any industry-specific exclusion is applied. The practical effect for investors is a portfolio that looks similar to SPUS at the top but has a longer tail of smaller companies further down the holdings list.

The FTSE Shariah methodology screens companies on both business activity and financial ratios. The business-activity screen excludes conventional banking and insurance, alcohol, tobacco, pork-related products, gambling, adult entertainment, weapons, and cinema and broadcasting where a company is fundamentally in that business. The financial-ratio screen caps debt, cash and interest-bearing securities, and receivables at set percentages of a rolling average market capitalization, which is broadly comparable to the AAOIFI ratio tests other Shariah indices use. Wahed maintains its own Shariah Supervisory Board, distinct from the ShariaPortfolio advisory relationship that SP Funds uses, which periodically reviews the fund's compliance and approves the purification methodology applied to distributions. Because FTSE and S&P run separate but philosophically similar screens, HLAL and SPUS agree on the compliance status of the vast majority of shared holdings, though they differ at the margins on ratio thresholds and specific industry exclusions, which is why their holdings lists are similar but not identical.

HLAL's 0.50% expense ratio is five basis points higher than SPUS and in line with SPRE. Since its 2019 launch, HLAL has moved closely with SPUS given their overlapping large-cap technology exposure, though HLAL's deeper bench of mid-cap names introduces some divergence in periods when small and mid-cap stocks outperform or underperform mega-caps. HLAL holds roughly a third of SPUS's assets under management, and average daily trading volume is correspondingly lower, which can matter for investors placing very large orders, though for typical retail-sized trades the difference in execution cost is minor. The dividend yield of roughly 0.45% reflects the same growth-over-income tilt seen across US halal equity ETFs: the fund holds few high-dividend-paying names because dividend-heavy sectors like conventional finance and utilities with heavy debt loads are largely screened out or underrepresented.

HLAL suits investors who want a Shariah-first US equity core holding and prefer a fund managed by a dedicated Islamic finance firm (Wahed) rather than a conventional index provider partnership. Its broader mid-cap exposure relative to SPUS may appeal to investors who want less concentration risk in the very largest technology names, though in practice the difference is incremental rather than dramatic given how much weight mega-cap technology still carries in the FTSE Shariah universe. Investors already using Wahed's robo-advisory platform may find HLAL a natural building block since it is Wahed's flagship US equity ETF. As with SPUS, HLAL is not a source of meaningful dividend income and should be paired with dedicated real estate or international funds for full portfolio diversification.

Wahed publishes a per-share purification amount for HLAL on its website on a quarterly basis, calculated in consultation with and endorsed by its Shariah Adviser. Because HLAL's constituents are individually screened to keep non-compliant income (primarily interest earned on cash reserves) under the standard 5% threshold, most holdings still generate a small amount of impermissible income each year. Wahed aggregates this across the fund's weighted holdings and publishes the resulting per-share purification amount, which Wahed's Shariah board reviews and approves on an annual cadence even though the published figure updates quarterly. Investors who hold HLAL directly, rather than through Wahed's managed portfolios, need to check this published per-share figure themselves and calculate their own purification obligation on dividends received; Wahed does not automatically deduct or donate on behalf of external brokerage account holders. For clients invested through Wahed's own robo-advisory service, the purification process is handled automatically as part of the platform's service, with purified amounts directed to charitable causes approved by the Shariah board. This is broadly comparable in transparency to SP Funds' approach for SPUS: both firms do the aggregation work rather than leaving investors to reconstruct the calculation from individual holdings' filings.