SPUS vs HLAL vs UMMA vs SPSK: The Ultimate Shariah ETF Guide
Exchange-Traded Funds (ETFs) have revolutionized ethical investing by allowing individuals to buy hundreds of Shariah-certified equities in a single trade. In the US and international markets, four major ETFs dominate the ethical landscape: SPUS, HLAL, UMMA, and SPSK. Understanding their index methodologies, sector tilts, and historical risk-adjusted returns is essential for optimal portfolio construction.
Overview of the Top Four Shariah ETFs
| Ticker | Fund Name | Benchmark Index | Expense Ratio | Primary Asset Class |
|---|---|---|---|---|
| SPUS | SP Funds S&P 500 Shariah Industry ETF | S&P 500 Shariah Index | 0.45% | US Large-Cap Equities |
| HLAL | Wahed FTSE USA Shariah ETF | FTSE USA Shariah Index | 0.50% | US Large & Mid-Cap Equities |
| UMMA | Wahed Dow Jones Islamic World ETF | Dow Jones Islamic Market International | 0.65% | Developed & Emerging (ex-US) |
| SPSK | SP Funds Dow Jones Global Sukuk ETF | Dow Jones Sukuk Total Return Index | 0.55% | Investment-Grade Sovereign Sukuk |
1. SPUS: S&P 500 Shariah Deep Dive
SPUS screens the standard S&P 500 universe using the S&P Shariah methodology. Because conventional financials (JPMorgan, Bank of America, Berkshire Hathaway) are completely excluded, SPUS carries a natural structural overweight toward Technology (approx. 40%–45%) and Healthcare (approx. 15%–18%).
Top holdings typically include Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), Alphabet (GOOGL), and Eli Lilly (LLY). Over the 2020–2025 bull run, SPUS frequently outperformed the standard S&P 500 due to its tech concentration.
2. HLAL: FTSE USA Shariah Analysis
Managed by Wahed, HLAL tracks the FTSE USA Shariah Index. While similar to SPUS, its underlying universe includes US mid-cap stocks alongside large caps. Furthermore, FTSE uses total assets rather than market capitalization for certain debt screening ratios, leading to minor divergence in stock inclusions and weighting compared to SPUS.
3. UMMA: The International Diversifier
Home-country bias is a significant risk for US investors. UMMA invests strictly outside the United States, targeting high-quality enterprises across Europe, Japan, Canada, Taiwan, and emerging markets. It tracks the Dow Jones Islamic Market International Titans 100 Index, including leaders like Taiwan Semiconductor (TSMC), ASML Holding, Novo Nordisk, and Tencent.
4. SPSK: The Interest-Free Fixed Income Anchor
Unlike conventional bond ETFs that hold debt contracts yielding interest, SPSK invests in dollar-denominated investment-grade Sukuk (Islamic trust certificates) issued by sovereign states (e.g., Saudi Arabia, UAE, Qatar) and multilateral entities (Islamic Development Bank). Sukuk holders own undivided undivided equity shares in revenue-generating physical assets or infrastructure, receiving periodic rental yields rather than usurious interest.
Sample Portfolio Models
Aggressive Growth Portfolio (Ages 20–35)
70% SPUS / HLAL • 20% UMMA • 10% Allocated Physical Gold
Balanced Wealth Accumulator (Ages 35–50)
50% SPUS • 15% UMMA • 25% SPSK (Sukuk) • 10% Physical Gold
Conservative Capital Preservation (Ages 50+)
30% SPUS • 50% SPSK (Sukuk) • 20% Physical Gold Bullion
Frequently Asked Questions
Which is better: SPUS or HLAL?
Both are Tier-1, highly liquid Shariah ETFs. SPUS strictly follows the S&P 500 universe (large cap only) with a slightly lower expense ratio (0.45%), while HLAL includes US mid-caps (0.50% expense ratio). Many investors hold both or choose SPUS for its slightly lower fee.
Do Shariah ETFs automatically purify dividends?
No. Shariah ETFs pass through the gross dividend income received from underlying portfolio companies. The fund managers publish annual dividend purification factors, which investors must apply to donate the impure fraction to charity.
Can non-US residents purchase SPUS and HLAL?
Yes, international investors can purchase SPUS, HLAL, UMMA, and SPSK through international brokerages like Interactive Brokers that offer access to US equity exchanges.
Written by Md Mamunur Rasid
Md Mamunur Rasid is the founder and lead financial systems researcher at EthicVestor. He specializes in algorithmic compliance for Islamic capital markets, Shariah equity screening (AAOIFI Standard 21), and quantitative personal wealth modeling.
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