Halal Etf Investment Research For Sister

Shared by @futuretrees

Updated Sep 22, 2026

HLAL, UMMA, and SPUS: research for discussion

Prepared: September 22, 2026
Purpose: A plain-English comparison to help us discuss whether these ETFs fit a long-term, Sharia-compliant investment plan.
Important: This is educational research, not individualized financial, tax, or religious advice. ETF holdings, fees, screens, and prices can change.

Bottom line

These appear to be legitimate, exchange-traded funds designed to provide Sharia-compliant equity exposure. They are not “safe” in the sense of protecting principal:

  • They can decline substantially during a stock-market downturn.
  • They are not bank deposits and are not FDIC-insured.
  • They do not guarantee income or a return of the amount invested.
  • All three are equity funds, so none is a complete low-risk portfolio by itself.

My general read is:

  • HLAL or SPUS: U.S. stock-market exposure.
  • UMMA: international, non-U.S. stock exposure.
  • Holding all three can make sense only if we understand that HLAL and SPUS overlap heavily; adding both does not diversify as much as it may appear.

Quick comparison

ETF What it invests in Benchmark / approach Expense ratio Main role
HLAL U.S. large- and mid-cap companies that pass a Shariah screen FTSE Shariah USA Index 0.50% Core U.S. equity exposure
SPUS Approximately 200 companies selected from the S&P 500 that pass Shariah criteria S&P 500 Sharia Industry Exclusions Index 0.45% U.S. large-cap equity exposure
UMMA Shariah-compliant companies in developed and emerging markets outside the U.S. Dow Jones Islamic Market International Titans 100 Index 0.65% International diversification

What those fees mean

The expense ratio is deducted inside the fund rather than billed separately. On a hypothetical $10,000 investment, the annual expense would be approximately:

  • HLAL: $50
  • SPUS: $45
  • UMMA: $65

That is before considering market gains or losses, and it is not a guarantee that the fund will earn enough to cover the fee.

Fund-by-fund assessment

HLAL — broad U.S. halal equity exposure

Strengths

  • Established in 2019, giving it a longer operating history than UMMA.
  • Tracks the FTSE Shariah USA Index and is rebalanced quarterly according to the fund page.
  • Provides access to a broad group of U.S. large- and mid-cap companies that pass the fund’s Shariah screen.

Risks and limitations

  • It remains a concentrated bet on U.S. stocks rather than a global portfolio.
  • Shariah screening narrows the investable universe and can create sector and company concentration.
  • It can fall sharply when U.S. equities fall.
  • The 0.50% fee is materially higher than a conventional broad-market index fund, although the comparison is not apples-to-apples because the Shariah screen is part of the product.

Best understood as: A possible core U.S. equity holding for someone who accepts stock-market volatility and wants a FTSE-based Shariah screen.

SPUS — S&P 500-based halal equity exposure

Strengths

  • The sponsor says it holds approximately 200 Shariah-compliant companies from the S&P 500.
  • Its stated methodology emphasizes low leverage, including debt-to-market-capitalization criteria below 30%.
  • It has the lowest expense ratio of the three at 0.45%.
  • The fund sponsor provides daily holdings and states the fund’s key risks openly.

Important concentration finding

The sponsor’s holdings file dated September 22, 2026 showed the top 10 positions representing approximately 58% of the fund. The largest positions included NVIDIA, Apple, Microsoft, Alphabet, Broadcom, Micron, Tesla, AMD, Eli Lilly, and ExxonMobil. This does not make SPUS automatically bad, but it means the fund can behave more like a concentrated large-cap/technology portfolio than a perfectly balanced version of the S&P 500.

Risks and limitations

The sponsor specifically identifies equity-securities risk, Sharia-compliant-investing risk, and passive-investment risk. The fund does not move defensively to avoid a falling market. Its large top holdings also create concentration risk.

Best understood as: A lower-fee, S&P 500-derived U.S. halal equity fund, but not necessarily a safer fund than HLAL.

UMMA — international halal equity exposure

Strengths

  • Designed to provide exposure to non-U.S. companies across developed and emerging markets.
  • It can reduce dependence on the U.S. market when combined with a U.S.-focused fund.
  • It uses the Dow Jones Islamic Market International Titans 100 Index and also incorporates ESG data into the fund’s investment process, according to Wahed.

Risks and limitations

  • It has the highest expense ratio at 0.65%.
  • International holdings add currency, geopolitical, country, and settlement risks.
  • Emerging-market exposure can be more volatile and less liquid.
  • The fund is newer, with an inception date of January 7, 2022.
  • Its premium/discount and bid-ask spread may be less favorable than a very large, heavily traded conventional ETF; check current trading conditions before placing an order.

Best understood as: The diversification piece—not the low-risk piece.

The overlap question

The most important portfolio issue is that HLAL and SPUS are both mainly U.S. equity funds. They use different indexes and screens, so they will not be identical, but they are likely to share many of the same major U.S. companies.

A portfolio split equally across HLAL, SPUS, and UMMA would therefore not mean “one-third U.S., one-third U.S., one-third international” in a meaningful diversification sense. It would be two U.S.-focused funds plus one international fund, with the possibility of substantial overlap in the U.S. portion.

A cleaner structure for discussion might be:

  1. Choose HLAL or SPUS as the primary U.S. equity fund.
  2. Add UMMA only if international diversification is desired and the extra volatility is acceptable.
  3. Keep emergency savings and near-term spending money outside these funds.
  4. Consider a separate Sharia-compliant lower-volatility allocation if the goal includes capital stability, not only long-term growth.

This is a framework, not a recommended allocation percentage.

Who should be cautious?

These funds may be a poor fit for money that is needed soon—for example, rent, tuition, a home down payment, medical expenses, or an emergency reserve. Anyone who might sell after a large decline should be especially cautious, because selling during a downturn can turn a temporary loss into a permanent one.

Before investing, it is worth answering:

  • How long can the money stay invested—less than 3 years, 3–7 years, or 10+ years?
  • Do we already have an emergency fund?
  • Could we tolerate seeing the investment fall 30% or more without selling in panic?
  • Are we comfortable with a portfolio that is entirely or almost entirely stocks?
  • Are we choosing one U.S. ETF intentionally, or buying both without checking their overlap?
  • Does the fund’s Shariah methodology match the guidance we personally follow?
  • Have we considered account type, taxes, trading spreads, and the treatment of dividend purification?

Practical conclusion

I would not describe HLAL, SPUS, or UMMA as “safe investments.” I would describe them as reasonable candidates for long-term, Sharia-compliant stock exposure, assuming the fund methodology is acceptable and the investor can withstand substantial losses along the way.

For a simple starting discussion:

  • Most straightforward U.S. choice: compare HLAL and SPUS, then choose one rather than automatically buying both.
  • Most useful diversification addition: UMMA, if international and emerging-market volatility is acceptable.
  • Most important protection: maintain cash reserves and do not invest money that may be needed soon.

Primary sources

Final reminder: Verify current fees, holdings, spreads, tax treatment, and Shariah guidance before investing. For a personal recommendation, consult a fiduciary investment professional and, where relevant, a trusted qualified Islamic-finance scholar.