AAOIFI Shari'a screening 路 Reviewed May 17, 2026

Halal alternatives to the S&P 500 ETF

If you want broad U.S. equity exposure without the haram holdings of SPY or VOO, here are the three credible halal alternatives and how they compare.

The S&P 500 (SPY, VOO) is not Shari'a-compliant. It holds banks, alcohol, gambling, and adult-entertainment names. The three credible halal alternatives are HLAL (Wahed FTSE USA Shariah ETF), SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF), and the Amana Income / Growth Funds (mutual funds, not ETFs). All three exclude prohibited businesses and apply AAOIFI quantitative screens.

HLAL tracks the FTSE USA IdealRatings Shariah Index. Approximately 200 holdings, expense ratio ~0.50%. Built by Wahed Invest with a documented Shari'a Supervisory Board.

SPUS tracks the S&P 500 Shariah Industry Exclusions Index, the same parent index as SPY but with non-compliant industries removed. ~190 holdings, expense ratio ~0.49%. Run by SP Funds with audit from a Shari'a board.

Amana Income (AMANX) and Amana Growth (AMAGX) are actively managed mutual funds from Saturna Capital. Higher expense ratios (~0.95%) but the longest track record of any U.S. halal equity fund. Saturna handles quarterly purification disclosures.

Choosing among them: HLAL has more international exposure than SPUS; SPUS more closely mirrors the U.S. large-cap index. Amana's actively-managed approach can deviate from index performance in either direction, so read its prospectus before allocating.

Methodology

Verdict applies the methodology of AAOIFI Shari'a Standard No. 21: Financial Papers (Shares and Bonds): qualitative screening for prohibited business activities, plus three quantitative caps. Interest-bearing debt < 30% of market cap, interest-bearing securities < 30%, and non-permissible income < 5% of revenue.

Sources and scholars

  • Wahed Invest Shari'a Supervisory Board (HLAL)
  • Yasaar Shari'a Advisory (SPUS)
  • Amana / Saturna Shari'a Supervisory Board

Frequently asked

Why is SPY not halal?

SPY (and VOO) replicate the S&P 500, which includes banks (JPM, BAC, WFC), alcohol (BUD, STZ), gambling (LVS, WYNN), and adult entertainment. AAOIFI prohibits direct ownership of any of these.

Is HLAL or SPUS the better halal S&P 500 alternative?

SPUS is the closer mirror to the S&P 500 since it starts from the same parent index. HLAL has broader exposure and a slightly more diversified holdings list. Both pass AAOIFI screens; the choice comes down to which underlying index you prefer.

Are there halal index funds in 401(k) plans?

Increasingly yes. Amana Mutual Funds are available in many 401(k) lineups, and HLAL/SPUS can be held in a self-directed brokerage account inside a 401(k) if your plan permits one.