You own VOO. You know it's not halal. But switching feels risky — will you sacrifice returns? Is the halal alternative actually comparable? Let's compare VOO (Vanguard S&P 500) and SPUS (SP Funds S&P 500 Sharia) with real data.
Head-to-Head Comparison
| Metric | VOO | SPUS |
|---|---|---|
| Index | S&P 500 | S&P 500 Shariah |
| Holdings | 503 | ~235 |
| Shariah Compliance | 67% (NOT compliant) | 100% compliant |
| Expense Ratio | 0.03% | 0.49% |
| AUM | $430B | $1.1B |
| 1-Year Return | +24.1% | +27.3% |
| 3-Year Annualized | +10.8% | +12.1% |
| 5-Year Annualized | +13.5% | +15.2% |
| Purification Required | N/A (not halal) | ~1.2% |
| Dividend Yield | ~1.3% | ~0.9% |
The Performance Surprise
SPUS has outperformed VOO over 1, 3, and 5-year periods. This isn't an anomaly — it's structural. When you remove banks, insurance companies, and tobacco/alcohol stocks from the S&P 500, you're left with a portfolio that's:
- Tech-heavy (~45%) — technology has been the best-performing sector
- Low-debt — Shariah screening is a quality filter that selects for financially conservative companies
- No financial drag — banks have underperformed since 2008
For a deep dive into the performance data, see our S&P 500 Shariah vs Conventional performance analysis.
The Cost Gap
The elephant in the room: VOO charges 0.03% vs SPUS at 0.49%. That's a 0.46% annual cost difference. On a $100,000 portfolio, that's $460/year more for SPUS.
However, SPUS has outperformed VOO by 1.3-1.7% annually — more than enough to offset the higher expense ratio. You're paying 0.46% more but earning 1.3%+ more. Net positive.
What You Lose (and Gain) by Switching
| You Lose | You Gain |
|---|---|
| Banks (JPM, BAC, WFC, GS) | Full Shariah compliance |
| Insurance (BRK.B, TRV) | Higher historical returns |
| Tobacco/Alcohol (PM, STZ) | Peace of mind |
| Lower expense ratio | Lower-debt quality portfolio |
| Higher dividend yield | No purification needed (already 100% clean) |
How to Switch
- Tax consideration: If VOO is in a taxable account, selling triggers capital gains tax. Consider switching in a tax-advantaged account (IRA, 401k) first.
- Sell VOO, buy SPUS — both are available at all major brokerages
- Set up automatic investing in SPUS just like you would with VOO
- Track purification: SPUS's ~1.2% purification rate means donating $12 per $1,000 of dividends to charity
Two ways to screen
Halal Terminal
Screen any ETF holding-by-holding and compare side-by-side with the Halal Terminal.
Key Takeaways
- SPUS has outperformed VOO over all major time periods — switching doesn't sacrifice returns
- SPUS costs 0.46% more but earns 1.3%+ more — net positive
- You lose banks and tobacco — sectors that have underperformed anyway
- Switch in tax-advantaged accounts first to avoid capital gains
- SPUS is 100% Shariah-compliant vs VOO's 67%
Important Disclaimer
Not financial advice. The information provided on this page is for educational and informational purposes only and should not be construed as financial advice, investment advice, trading advice, or any other type of advice. You should not make any financial decisions based solely on the information presented here.
Not a fatwa. Shariah compliance screening results are generated using automated data analysis based on publicly available financial data. These results do not constitute a religious ruling (fatwa) and should not be treated as one. Always consult a qualified Islamic scholar or Shariah advisor for guidance specific to your situation.
Do your own research. Past performance and current compliance status do not guarantee future results or continued compliance. Screening data may contain errors or become outdated. Always verify information independently and consult with a qualified financial advisor before making any investment decisions.