Shariah-compliant stocks and ETFs?

“Are there any Muslim-friendly/Shariah-compliant investments in the US stock market?”

Short answer is, yes – but you’ll need to do some digging.

Long answer:

Yes, a stock is Shariah-compliant if it avoids prohibited activities (e.g., alcohol, gambling, pork, interest-based financial services) and adheres to specific financial ratios.

Key criteria include total debt and cash/interest-bearing securities being less than 33% of total assets, and interest income below 5% of total revenue (usually certified by Shariah boards or advisory committees).

Popular Shariah-compliant ETFs include the HLAL and SPUS ETF.

The HLAL ETF tracks the FTSE USA Shariah Index, which consists of US companies meeting Shariah compliance standards, providing exposure to a diversified set of US equities aligned with Islamic principles.

Meanwhile, the SPUS ETF tracks the S&P 500 Shariah Industry Exclusions Index, excluding companies involved in non-permissible industries under Shariah law, thereby focusing on compliant businesses within the broader S&P 500.

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