Is SPUS halal?

SPUS applies a rules-based screen to the S&P 500 universe and layers on three additional industry exclusions beyond the standard S&P Shariah methodology: aerospace and defense, financial exchanges and data, and data processing and outsourced services. What is left is roughly 200 large-cap US companies weighted by float-adjusted market capitalization. Because the S&P 500 itself is dominated by a handful of mega-cap technology companies, and because SPUS additionally excludes most of the financial sector (banks and insurers fail the interest-based-income screen before the industry exclusions even apply), the fund ends up heavily concentrated in technology and healthcare. NVIDIA, Apple, Microsoft, and Alphabet together make up close to 40% of the portfolio as of mid-2026. This concentration means SPUS will move more sharply than the S&P 500 in either direction when large technology names rally or sell off. Investors who want a halal equivalent of a total US market fund should understand that SPUS is not that: it is a large-cap growth-tilted fund shaped as much by what Shariah screening removes (financials, most industrials with defense exposure) as by what it deliberately includes.

SPUS relies on the S&P Shariah methodology for its business-activity and financial-ratio screens, then applies SP Funds' own additional industry exclusions on top. The business-activity screen removes companies with material revenue from alcohol, tobacco, pork, conventional banking and insurance, gambling, adult entertainment, and weapons. The financial-ratio screen caps debt, interest-bearing securities, and receivables each at 30% (some methodologies use 33%) of market capitalization, which is why most highly leveraged businesses fail regardless of their industry. SP Funds contracts with ShariaPortfolio, an outside Shariah advisory firm, to certify the index and publish a Certificate of Shariah Compliance and periodic Shariah auditor reports on its website. Screening is rebalanced quarterly along with the underlying S&P Shariah index, meaning individual holdings can be added or dropped as companies' leverage ratios or revenue mix shift. This is broadly consistent with how Zoya and Musaffa classify individual constituent stocks, though investors who want to verify a specific holding independently can cross-check it against those screener apps.

At 0.45%, SPUS is inexpensive relative to other Shariah-compliant equity ETFs (most SP Funds and Wahed products run 0.50% to 0.55%) but expensive relative to conventional S&P 500 index funds, which routinely charge 0.03% to 0.09%. That roughly 40 basis point premium is the practical cost of Shariah screening and is common across the halal ETF category; investors are paying for the exclusion methodology and ongoing Shariah audit rather than for active management. Since inception in December 2019, SPUS has broadly tracked the direction of the S&P 500 with periods of both outperformance and underperformance driven by its technology overweight and lack of financial-sector exposure. Because SPUS holds no banks, it did not carry the drag conventional financials experienced during banking-sector stress episodes, and because it holds no defense contractors, it also missed the rallies those stocks periodically enjoy. The 30-day SEC yield of roughly 0.43% is low, consistent with a growth-tilted, low-dividend-paying holding set rather than an income fund.

SPUS is best suited to investors who want a single, liquid, low-maintenance core holding for the US equity portion of a halal portfolio and who are comfortable with a technology-heavy, growth-oriented tilt rather than a broad-market replica. Its size (over $2 billion in assets) and daily trading volume make it easy to buy and sell without meaningful bid-ask spread cost, which matters for investors dollar-cost-averaging into retirement or brokerage accounts. It is less suited to investors seeking dividend income, since the yield is low, or to investors who want financial-sector or defense-sector exposure for diversification, since both are structurally excluded. Investors building a full portfolio often pair SPUS with a REIT fund like SPRE or an international fund like SPWO to fill in the real estate and non-US equity exposure that SPUS, as a large-cap US technology-tilted fund, does not provide.

SP Funds publishes quarterly dividend purification factors on its website through its Shariah advisor, ShariaPortfolio. Because SPUS holds only stocks that individually pass the Shariah financial-ratio and business-activity screens, most constituent companies still carry a small sliver of impermissible income, typically interest earned on cash reserves, that falls under the standard 5% AAOIFI tolerance. SP Funds aggregates each holding's non-compliant income ratio, weights it by the fund's portfolio composition, and publishes the resulting purification factor (a percentage applied to the dividend income an investor receives, not a fixed per-share dollar amount) roughly 2.5 months after each quarter closes, once underlying companies have finalized their financial disclosures. SP Funds hosts a purification calculator on its website where investors enter the dividend they received and the tool applies the current factor to return the amount to purify. Investors who receive SPUS dividends are expected to donate the corresponding purified portion to charity rather than treat the full distribution as clean income. This is a meaningfully more transparent approach than funds that leave purification entirely to the investor to calculate from public filings: SP Funds does the aggregation work and publishes a single factor. Investors should check the current calculator on sp-funds.com rather than relying on a prior quarter's figure, since the purification factor moves as portfolio weights and underlying companies' interest income change quarter to quarter.