Is SPY Halal?Why the S&P 500 ETF Fails Shariah Screening

"SPDR S&P 500 ETF Trust (SPY)" tracks the S&P 500 index and is one of the most popular ETFs in the world with $570B in assets. But is it halal? We screened every single holding — all 503 stocks — against Shariah standards to give you a definitive, data-backed answer.

Screening Results at a Glance

Why SPY Fails Shariah Screening

SPY fails Shariah screening primarily because the S&P 500 includes major financial institutions (JPMorgan, Bank of America, Wells Fargo, Goldman Sachs), insurance companies (Berkshire Hathaway), alcohol producers (Constellation Brands), and gambling/entertainment companies. These sectors are fundamentally non-compliant regardless of financial ratios. Even with 67% of holdings being individually compliant, the presence of explicitly prohibited businesses makes SPY unsuitable as a Shariah-compliant investment.

Top Compliant Holdings

These SPY holdings pass Shariah screening:

1. AAPL
2. MSFT
3. NVDA
4. AMZN
5. META
6. GOOGL
7. TSLA
8. UNH
9. AVGO
10. LLY

Non-Compliant Holdings

These holdings fail Shariah screening and are the reason SPY is not compliant:

1. JPM (banking)
2. BAC (banking)
3. WFC (banking)
4. GS (banking)
5. BRK.B (insurance/finance)
6. V (financial services)
7. MA (financial services)

Halal Alternatives to SPY

If you want similar market exposure with full Shariah compliance, consider these alternatives:

• SPUS (SP Funds S&P 500 Sharia ETF) — Shariah-screened version of the S&P 500
• HLAL (Wahed FTSE USA Shariah ETF)
• UMMA (Wahed Dow Jones Islamic World ETF)

For a detailed comparison of halal ETFs, see our Best Halal ETFs for 2026 guide.

Screen SPY Yourself via API

Get the full per-holding compliance breakdown for SPY using the Halal Terminal API:

curl https://api.halalterminal.com/api/etf/SPY/screening \
  -H "X-API-Key: YOUR_KEY"

The response includes compliance status for every holding, the overall compliance rate, weighted compliance by portfolio weight, and the aggregate purification rate.

import requests

resp = requests.get(
    "https://api.halalterminal.com/api/etf/SPY/screening",
    headers={"X-API-Key": "YOUR_KEY"}
)
data = resp.json()

print(f"Compliance Rate: {data['compliance_rate']}%")
print(f"Compliant: {data['compliant_holdings']}/{data['total_holdings']}")
print(f"Purification: {data['purification_rate']:.1%}")

# Show non-compliant holdings
for h in data["holdings"]:
    if h["compliance_status"] != "compliant":
        print(f"  FAIL: {h['symbol']} ({h['weight']:.1%} weight)")

Key Takeaways

• SPY is NOT Shariah-compliant — 67.0% of holdings pass screening
• Weighted compliance: 62.8% — non-compliant holdings have significant weight
• Purification rate: 4.5% — moderate purification needed on dividends
• Halal alternatives exist — SPUS and HLAL offer similar exposure with full compliance
• Screen any ETF holding-by-holding using the Halal Terminal API