Halal ETFs: a complete guide to Shariah-compliant index funds

Halal ETFs are exchange-traded funds whose holdings have been screened against Shariah-compliance criteria — typically the AAOIFI rules described on our methodology page or an equivalent index-provider methodology. They're a fast way for retail investors to get diversified Shariah-screened equity exposure without screening every stock themselves.

What makes an ETF halal

• The underlying holdings pass the screen — no prohibited-sector exposure, financial ratios under their AAOIFI limits.
• The fund itself is structured permissibly — no interest-bearing cash sweep, no securities lending into interest-bearing instruments.
• A Shariah supervisory board reviews the fund and publishes an annual certificate.
• Dividend purification is handled — either at the fund level (purification deducted before distribution) or disclosed to investors so they can purify individually.

Major halal ETFs in 2026

Three families dominate the US-listed halal-ETF landscape in 2026: SP Funds (SPUS, SPSK, SPRE, SPTE), Wahed (HLAL), and the index-licensed S&P Shariah / Dow Jones Islamic vehicles offered by several issuers. Internationally, iShares MSCI World Islamic (ISWD) and Wahed's ESG-overlay variants extend the universe.

SP Funds family

SPUS tracks the S&P 500 Shariah index. SPSK covers sukuk for fixed-income-style allocation. SPRE focuses on dividend-paying Shariah-screened equities. The whole family is index-tracking, with transparent monthly holdings disclosure.

Wahed (HLAL)

HLAL is Wahed's flagship Shariah-screened US equity ETF. Active management overlay on top of a broad Shariah-screened universe.

Index-licensed funds

Several issuers offer ETFs tracking the S&P Shariah, Dow Jones Islamic Market, FTSE Shariah, or MSCI Islamic indices. The screen methodology is set by the index provider rather than the issuer.

Verify the holdings yourself

ETF prospectuses disclose monthly holdings. You can verify each holding still passes the AAOIFI screen using the Akinda API — pull the holdings list, loop through, hit /compliance/<ticker> for each. Names that previously passed sometimes drift over (a debt issuance, a new prohibited business segment), and the ETF rebalances on a schedule — so spot checks catch the drift between rebalances.