StructureSPUS tracks the S&P 500 Shariah Industry Exclusions Index (~200 names, excluding e.g. Aerospace & Defense, Financial Exchanges & Data, Data Processing). SPSK tracks the Dow Jones Sukuk Total Return Index (Shariah fixed income). SPRE tracks an S&P Global Shariah REIT index. SP Funds publishes a Purification Calculator for dividend purification.
A family of US-listed Shariah ETFs managed per AAOIFI rules by ShariaPortfolio, with a published purification calculator. Structurally investment products that clear the lens more cleanly than home finance. Verify each fund's named Shariah committee, expense ratio, and how the industry-exclusion overlay shifts risk versus the parent index.
Read the contract →Contract-grade public documents were read directly (e.g. a full Terms & Conditions or a scholar-reviewed contract). This rates our certainty, not the provider’s compliance.
Established & regulatory standing
The verifiable facts
Established
SP Funds launched its first Shariah-compliant ETFs in December 2019; the sponsor/adviser group is ShariaPortfolio (founded 2003 by Naushad Virji). NYSE-listed.
Regulatory standing
US-listed '40 Act ETFs (SEC-regulated); ShariaPortfolio, Inc. is an SEC-registered investment adviser (CRD #173937). Market risk applies; no deposit insurance.
Shariah board
Who certifies it
Managed per AAOIFI rules; ShariaPortfolio cites AAOIFI as the governing standards body. The named Shariah advisory committee for each fund is best confirmed on its prospectus.
A named, credentialled board is a real signal — but a provider’s own board certifying its own product is not the same as arm’s-length review. Weigh it alongside the independent commentary below.
How the structure works
The mechanics, in principle
SPUS tracks the S&P 500 Shariah Industry Exclusions Index (~200 names, excluding e.g. Aerospace & Defense, Financial Exchanges & Data, Data Processing). SPSK tracks the Dow Jones Sukuk Total Return Index (Shariah fixed income). SPRE tracks an S&P Global Shariah REIT index. SP Funds publishes a Purification Calculator for dividend purification.
This describes the structure in principle — it is not a verdict on the executed contract. How the contract actually behaves is what the checklist below tests.
From the public documents
How the contract actually works
Read from SP Funds (SPUS / SPSK / SPRE)’s own public materials — white papers, product pages, FAQs and fatāwā — not its executed contract, which is generally not published. Where a point is undisclosed, it is said plainly rather than guessed. Sources are listed below.
Audit V2 (methodology-grounded, from S&P Dow Jones Indices' published Shariah methodology — the screen these funds actually track). Structurally these are screened equity/REIT/sukuk products, not debt instruments, so the lens that troubles home finance does not apply: a shareholder owns a slice of the underlying businesses. What is auditable here is the rigour of the screen, and S&P's is public and AAOIFI-derived in two layers. (1) Business-activity screen — companies are excluded for involvement in alcohol, tobacco, pork, gambling, conventional (interest-based) financial services, weapons/defence and adult entertainment; SPUS layers on further sub-industry exclusions (Aerospace & Defense, Financial Exchanges & Data, Data Processing). (2) Accounting screen — a company is dropped if total/interest-bearing debt exceeds 33% of its trailing-average market capitalisation, if cash plus interest-bearing securities exceeds 33%, or if accounts receivable exceeds 49% of that market cap; residual non-permissible (chiefly interest) income must stay under 5% of revenue, and the portion that slips through is what the published Purification Calculator quantifies for the investor to give away. Honest limits worth weighing: S&P's receivables threshold (49%) is more lenient than stricter AAOIFI readings (~30%), and its denominator is a market-cap average rather than total assets — a live point of scholarly disagreement on screen conservatism, not a defect we can assert; the named individual scholars on SP Funds' own Shariah committee are not surfaced (the funds state they are 'managed per AAOIFI rules' rather than naming a board); and the exact current thresholds, index names and rebalancing cadence should be confirmed against the live prospectus, as index methodologies are periodically revised.
The Six-Pillar test
The questions that decide it
This is the universal lens this site applies to every home-finance contract, anywhere. Read each pillar as a question to put to SP Funds (SPUS / SPSK / SPRE)’s executed contract — not its brochure.
- 1
Real ownership
Does the financier genuinely take ownership of the asset — even briefly — and bear a real owner's risk, rather than only ever holding a debt secured against it?
- 2
Risk-sharing
If the asset is destroyed or its value collapses, does the financier share that loss in proportion to its stake, or is the customer left bearing it alone?
- 3
Rent vs interest
In a lease/co-ownership, is the rent benchmarked to a genuine market rent for the property — or is it calibrated to an interest rate (a base-rate + margin) in disguise?
- 4
Default mechanism
On default, does the contract behave like the end of a real lease/partnership — or does it accelerate like a loan, demanding the full outstanding 'principal' plus charges?
- 5
No guaranteed pre-fixed return
Is the financier's return tied to real ownership and risk, or is it a pre-fixed, guaranteed sum that arrives regardless of what happens to the asset?
- 6
Substance over form
Strip away the Arabic labels: does the cashflow, risk, and outcome differ from a conventional loan — or is it the same economics wearing a compliant name (ḥiyal)?
Before you sign
What to ask SP Funds (SPUS / SPSK / SPRE), in writing
Put these to the provider in writing and keep the answers. The reply — not the marketing — is what tells you whether the structure holds.
Who sits on SP Funds' named Shariah supervisory board, and how often do they audit holdings?
How should I use the purification calculator, and what income is deemed impure?
What are each fund's expense ratio, liquidity, and tracking error?
How does the industry-exclusion overlay change SPUS's risk/sector profile vs the S&P 500?
The honest gap
What we have not verified
- Named individual Shariah scholars for SP Funds were not surfaced — verify on the prospectus.
- Index names (SPRE/SPSK) should be checked against the latest prospectus as indices can be renamed.
Sources
What this read is built on
The verifiable references behind this page — provider documents and independent scholarly resolutions. Read them yourself; do not take our summary on trust.