SPUS — SP Funds S&P 500 Sharia ETF Review

SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) launched in December 2019 and has rapidly become the dominant halal equity ETF in the US market. With approximately $178M in assets under management, it offers institutional-grade liquidity uncommon in the Islamic finance ETF space.

The fund tracks the S&P 500 Shariah Industry Exclusions Index, maintained by S&P Dow Jones Indices. This index starts with the full S&P 500 and applies Shariah screening to exclude companies in prohibited sectors and those failing financial ratio tests.

SPUS is certified Shariah-compliant by Ratings Intelligence Partners according to AAOIFI-inspired standards as of March 2026. Screening status is subject to periodic review.

The S&P 500 Shariah Index applies a two-stage screening process aligned with AAOIFI principles. First, companies in prohibited sectors are excluded entirely: conventional banking and insurance, alcohol production and distribution, tobacco, pork-related products, gambling, adult entertainment, and controversial weapons.

Second, remaining companies must pass financial ratio tests. Total debt must be below 33% of market capitalization, cash plus interest-bearing securities must be below 33% of market cap, and accounts receivable must be below a defined threshold. Companies failing any ratio are excluded.

After both screens, approximately 200–230 companies remain from the original 500. The exclusions are concentrated in financials (the largest removal), plus scattered holdings in other prohibited sectors. This creates a natural overweight in technology, healthcare, and consumer discretionary.

The index is reviewed quarterly by S&P Dow Jones Indices with Shariah oversight from Ratings Intelligence Partners. Companies can be added or removed at each review based on updated financial data and business activity changes.

SPUS's top holdings closely mirror the S&P 500's largest companies — minus the financial sector. As of early 2026, top positions typically include Apple, Microsoft, NVIDIA, Amazon, Alphabet, Meta, Broadcom, Tesla, and other mega-cap technology and consumer companies.

The sector allocation reflects what remains after Shariah screening. Technology typically represents 40–50% of the fund, significantly higher than the S&P 500's ~30% tech weighting. Healthcare represents 12–16%, consumer discretionary 10–14%, and communication services 8–12%. Financials are essentially absent.

This concentration is both a feature and a risk. In periods when technology outperforms, SPUS can outperform the unscreened S&P 500. When technology underperforms or financials rally, SPUS may lag. The sector tilt is a structural consequence of Shariah screening, not an active investment decision.

SPUS charges an expense ratio of 0.45%. While this is meaningfully higher than VOO's 0.03%, it is the lowest among US-listed Shariah-compliant equity ETFs. The fee covers active Shariah screening, supervisory board oversight, compliance monitoring, and rebalancing.

SPUS distributes dividends quarterly. Because some screened companies earn minimal non-compliant income (below the 5% threshold), a purification ratio is published each quarter by the Shariah supervisory board. Investors are expected to donate this small percentage of dividends to charity (tazkyah).

The bid-ask spread on SPUS is typically tight, reflecting its large AUM and active trading volume. For most retail investors, transaction costs are comparable to other liquid ETFs.

SPUS is designed as a core US equity holding for Shariah-conscious investors. It is the most suitable choice for investors who want broad US large-cap exposure with the lowest available halal fee, high liquidity and tight spreads for regular trading, S&P index methodology — the same base index as VOO/SPY, and independent Shariah certification from Ratings Intelligence Partners.

Investors who prefer FTSE methodology, want mid-cap exposure, or are looking for a single-fund global allocation may find HLAL, UMMA, or ISWD better suited to their needs.