SPUS is a leading Sharia-compliant U.S. equity comprised of roughly 200 S&P 500 Index stocks. Its expense ratio is 0.45%, and the ETF has $1.64B in assets under management. Despite the suggestion, SPUS is not a substitute for S&P 500 Index ETFs like SPY. In fact, it's heavily concentrated in tech, and consequently, it's much more risky and growth-oriented. Complementing SPUS with a lower P/E fund like HLAL is one solution, but I think readers should consider the ten stocks listed below, selected for their fundamental characteristics. Generally, investors requiring adherence to Islamic investing principles should recognize that there are limited options available and start thinking about what it means to manage their own portfolio. Assisting with this is my primary aim, but I'll also provide an update on SPUS's fundamentals compared to four other ETFs: HLAL, SCHG, QQQ, and SPY.
SPUS: Navigating Sharia-Compliant Investments and Strategic Portfolio Enhancement
On July 17, 2025, a comprehensive analysis was conducted on the SP Funds S&P 500 Sharia Industry Exclusions ETF (SPUS), revealing its status as a robust option for Sharia-compliant U.S. equity investments. The ETF, which comprises approximately 200 stocks from the S&P 500 Index, manages a substantial $1.64 billion in assets and operates with an expense ratio of 0.45%. Despite its notable features, the review underscored that SPUS should not be considered a direct replacement for conventional S&P 500 Index ETFs like SPY, primarily due to its significant allocation to technology stocks, which inherently introduces higher risk and a more pronounced growth orientation.
The study highlights a strategic approach for investors aiming to balance risk and adhere to Islamic finance principles: complementing SPUS with other investment vehicles. One suggested method involves integrating funds with lower price-to-earnings ratios, such as HLAL. Furthermore, the analysis advocates for considering a curated selection of ten individual stocks chosen for their strong fundamental characteristics, providing a more tailored approach to Sharia-compliant investing. This guidance is particularly pertinent given the constrained landscape of available Sharia-compliant investment products. The overarching objective of the analysis is to empower investors to actively manage their portfolios in alignment with Islamic investment guidelines. The report also includes a comparative update on SPUS’s fundamental performance against four other prominent ETFs: HLAL, SCHG, QQQ, and SPY, offering a broad perspective on its market positioning and performance dynamics.
This detailed examination of SPUS offers a critical lesson for investors in specialized markets: understanding the nuances of an investment vehicle is paramount. While SPUS provides an invaluable avenue for Sharia-compliant investing, its inherent sector concentration necessitates a thoughtful, complementary strategy. The insight that a single ETF, even one designed for a specific ethical framework, may not offer sufficient diversification or risk profile highlights the importance of active portfolio management. This analysis encourages investors to look beyond simple categorization and delve into fundamental characteristics, suggesting that a blend of specialized funds and carefully selected individual stocks can create a more balanced and compliant portfolio. It underscores the perpetual challenge and opportunity in niche investment sectors: to innovate and adapt, ensuring both financial integrity and adherence to ethical mandates.