Is HLAL Halal? The 2026 Shariah Verdict on the Wahed FTSE USA Shariah ETF (0.50% MER)

Quick Answer

Yes — HLAL is halal. The Wahed FTSE USA Shariah ETF tracks the FTSE Shariah USA Index, screened by Yasaar Limited and certified Shariah-compliant by fatwa, with annual Shariah Supervisory Board reports and published quarterly purification figures. It holds 211 US stocks at a 0.50% expense ratio. The one caveat is methodology: FTSE's 33.33% ratio ceilings are looser than strict AAOIFI's 30%.

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HLAL Is the Ticker, Not a Typo

If you searched "is HLAL halal" — yes, the fund literally named itself after the word. HLAL is the Wahed FTSE USA Shariah ETF, a Nasdaq-listed fund launched July 16, 2019 by Wahed Invest, the same firm behind the Wahed robo-advisor platform we compared in our Manzil vs Wahed breakdown. Unlike XEQT or VFV, where the halal question requires dissecting holdings to find the failures, HLAL was built for compliance from the index up. It charges a 0.50% expense ratio — $500 a year on a $100,000 position — and as of June 2026 holds roughly $900 million USD in assets across 211 US stocks.

Fund fact	Detail (issuer-verified, June 2026)
Full name / ticker	Wahed FTSE USA Shariah ETF (HLAL), Nasdaq-listed, USD
Index tracked	FTSE Shariah USA Index
Shariah screening	Yasaar Limited; index certified Shariah-compliant by fatwa
Total expense ratio	0.50%
Holdings	211 US stocks (as of June 5, 2026)
Rebalance / distributions	Quarterly rebalance; annual income distribution, yield ~0.45%
Compliance reporting	Annual Shariah Supervisory Board reports + quarterly dividend purification figures

Who Says It Is Halal — and Whether the Label Holds Up

The skeptical version of this question — "are halal ETFs actually halal, or is it marketing?" — deserves a real answer, because plenty of products wear the label thinly. HLAL's compliance trail has four layers, each independently checkable:

A named screening firm. Yasaar Limited, an independent Shariah advisory firm, screens every constituent of the FTSE Shariah USA Index against the business-activity and financial-ratio tests. Wahed does not self-certify.
A published fatwa. The FTSE Shariah index series has been fully certified as Shariah-compliant through a fatwa issued by Yasaar's principals — a formal Islamic legal opinion, not a compliance memo.
Annual Shariah Supervisory Board audits. Wahed posts the fund's board reports on its website — the 2021 through 2024 reports are publicly downloadable.
Quarterly purification disclosure. Wahed publishes the exact per-dividend purification amounts (the Q1 2026 file is live on the fund page), so holders know precisely what to donate.

That is the strongest documentation stack of any US-listed halal equity ETF. The verdict on the label: it is earned, not cosmetic. Where the honest nuance comes in is which screen the fatwa blesses — and that is the next section.

The Screen HLAL Passes: FTSE Shariah vs Strict AAOIFI

Every mainstream Shariah methodology runs the same two-stage logic. Stage one is business activity: a company is excluded if more than 5% of revenue comes from conventional finance, alcohol, tobacco, gambling, pork, adult entertainment, or weapons. Stage two applies financial-ratio tests to what survives. The standards diverge on the thresholds and the denominator:

Screen	AAOIFI Standard 21	FTSE Shariah (HLAL's index)
Interest-bearing debt	≤ 30% of market cap	≤ 33.33% of total assets
Cash + interest-bearing items	≤ 30% of market cap	≤ 33.33% of total assets
Receivables screen	—	Cash + accounts receivable ≤ 50% of total assets
Impermissible income	≤ 5% of total income	< 5% of revenue

Where the two standards can disagree

FTSE's use of total assets as the denominator makes its screen more stable — a stock does not flip in and out of compliance just because its share price moved. But the 33.33% ceilings sit above AAOIFI's 30%, which means a thin band of companies can pass FTSE while failing strict AAOIFI. This is the same methodology spread that decides whether any index fund can be halal at all: the answer turns on the screen, not the wrapper. For most investors, a fatwa-certified FTSE screen is sufficient. If you hold yourself to AAOIFI without buffer, run HLAL through Musaffa or Zoya, identify the handful of marginal names, and make the call deliberately rather than discovering it later.

What HLAL Holds Right Now (June 2026)

Verdicts about funds are only as good as the holdings data behind them, so here is the current top of the book, as of June 5, 2026:

Holding	Weight
Apple (AAPL)	13.5%
Microsoft (MSFT)	9.1%
Alphabet (GOOGL + GOOG)	11.5% combined
Broadcom (AVGO)	5.2%
Meta Platforms (META)	3.9%
Tesla (TSLA)	3.3%
Micron Technology (MU)	3.0%
Eli Lilly (LLY)	2.6%
AMD (AMD)	2.2%

Notice what is missing: no JPMorgan, no Bank of America, no Berkshire Hathaway, no Wells Fargo. The conventional financials that sink XEQT and the S&P 500 itself — financials are roughly 11-13% of that index — are screened out before HLAL buys a single share. That is the structural difference between a purpose-built Shariah fund and a broad index fund you hope to purify after the fact.

The concentration trade-off

The cost of removing banks, insurers, and leveraged firms from a US index is that what remains skews hard toward mega-cap technology. HLAL's top 10 positions are 54% of the entire fund; Apple alone is 13.5%. A conventional S&P 500 fund spreads the same dollars across more sectors. This is not a compliance problem — every name passed the screen — but it is a volatility profile you should accept consciously. In a tech-led drawdown, HLAL will fall harder than a diversified index. The fix, if you want one, is pairing it with a globally diversified screened fund rather than abandoning the screen.

The Purification Step Most Holders Skip

Passing the screen does not end the obligation. Even compliant companies earn trace non-permissible income — interest on corporate cash, mostly — and the investor's share of that must be donated to charity. AAOIFI requires purification regardless of whether dividends are paid; the more common practice purifies the dividend stream. Wahed makes this unusually easy: it publishes a quarterly purification file for HLAL showing the exact per-share amount. With the fund yielding roughly 0.45%, the numbers are small — a $100,000 position throws off about $450 a year in distributions, and the purifiable slice is a fraction of that — but small is not zero, and the published CSV removes any excuse for guessing.

Holding HLAL in Canada: the Account Math

HLAL trades on Nasdaq in US dollars, and for a Canadian investor the account you place it in changes the after-tax outcome more than the fee does.

RRSP: the clean home

US-listed ETFs held directly in an RRSP are exempt from the 15% US dividend withholding tax under the Canada-US treaty. HLAL in an RRSP loses nothing to the IRS. The 2026 RRSP dollar limit is $33,810 (or 18% of prior-year earned income, whichever is lower).

TFSA and FHSA: a small, permanent leak

The treaty exemption does not extend to TFSAs or FHSAs — the IRS withholds 15% of every HLAL dividend, and no foreign tax credit exists inside a registered account. At a ~0.45% yield, the leak is roughly $68 a year on a $100,000 position — real, but minor against the 0.50% MER. The 2026 TFSA limit is $7,000, with $109,000 of cumulative room for anyone eligible since 2009. If you want the full account-by-account playbook, our halal TFSA guide walks through it; the short version is that many Canadians put the Canadian-listed WSHR in the TFSA and reserve HLAL for the RRSP, where the treaty does the work.

Non-registered: withholding credit plus T1135

In a taxable account the 15% withholding still applies but you can recover it through the foreign tax credit. Two additional wrinkles: capital gains on sale are taxed at the 50% inclusion rate under section 38(a) of the Income Tax Act, and because HLAL is US-listed it counts as specified foreign property — once your total foreign property cost exceeds $100,000 CAD, you must file Form T1135 annually. A Canadian-listed fund avoids that form entirely.

HLAL vs the Other Halal Options Canadians Can Buy

Fund	Coverage / listing	Fee	Annual cost on $100K
HLAL (Wahed FTSE USA Shariah)	211 US stocks, Nasdaq (USD)	0.50%	$500
SPUS (SP Funds S&P 500 Shariah)	Screened S&P 500, US-listed (USD)	0.45%	$450
WSHR (Wealthsimple Shariah World Equity)	Global screened equity, Cboe Canada (CAD)	0.50% mgmt fee (0.56% MER)	$560
Wealthsimple Halal managed portfolio	Managed, Shariah-screened (CAD)	~0.9-1.0% all-in	~$900-$1,000

The fee spread between the three DIY ETFs is 11 basis points at most — $110 a year per $100,000 between the cheapest (SPUS at 0.45%) and the priciest all-in (WSHR at a 0.56% MER) — so the real decision drivers are listing currency, account placement, and geographic mix. WSHR is the only Canadian-dollar option and the only one with global (not just US) exposure; we reviewed the whole Wealthsimple halal lineup in our Wealthsimple halal review. For the full ranked field, including who each fund suits, see our best halal ETFs in Canada ranking and the broader Shariah-compliant ETF guide.

The Verdict

HLAL is halal — and unlike most rulings in this series, this one is not a close call. The fund was engineered for compliance: a fatwa-certified index, an independent screening firm, annual Shariah board audits, and published purification data. The two honest qualifications are method and shape. Method: FTSE's 33.33% thresholds are looser than AAOIFI's 30%, so strict-AAOIFI investors should screen the marginal holdings themselves. Shape: a 54% top-10 concentration means you are making a large, conscious bet on US mega-cap tech, and you are paying 0.50% — about $400 a year more per $100,000 than an unscreened S&P 500 fund at 0.09-0.10%. That premium is the price of not owning banks. For an investor who treats Shariah compliance as non-negotiable, it is one of the cheapest, most rigorously documented ways to own US equities in 2026.

Building a halal portfolio across your RRSP, TFSA, and taxable accounts?

The fund choice is the easy part — the account placement, withholding tax, T1135, and purification workflow are where money quietly leaks. Book a free 15-minute call with our halal investing team and we will map it against your actual accounts.

Disclaimer: This article applies the AAOIFI Shariah Standard No. 21 and FTSE Shariah screening methodologies to publicly reported fund data as of June 2026. Shariah-compliance rulings involve scholarly interpretation — for a binding ruling on your specific situation, consult a qualified Islamic finance scholar. Fund holdings and financial ratios change quarterly; verify current data via Musaffa or Zoya before acting. This is not a fatwa.

Related 2026 guides

Key Takeaways

1HLAL is halal — it tracks the FTSE Shariah USA Index, screened by Yasaar Limited and certified by fatwa, with annual Shariah Supervisory Board reports (2021-2024 published) and quarterly purification data on dividends
2The methodology caveat: FTSE Shariah caps debt and interest-bearing items at 33.33% of total assets, looser than AAOIFI Standard 21's 30%-of-market-cap ceilings — strict AAOIFI followers should screen the marginal holdings via Musaffa or Zoya
3As of June 5, 2026 HLAL holds 211 stocks but the top 10 are 54% of the fund — Apple 13.5%, Microsoft 9.1%, Alphabet 11.5% combined — so the real trade-off is concentration, not compliance
4Account placement matters for Canadians: RRSP avoids the 15% US dividend withholding entirely, a TFSA leaks roughly $68 a year per $100K at HLAL's ~0.45% yield, and a non-registered position above $100K cost triggers T1135 reporting
5At 0.50% HLAL costs $500 a year per $100K — versus $450 for SPUS, $560 all-in for the Canadian-listed WSHR (0.56% MER), and roughly $900-$1,000 all-in for the Wealthsimple Halal managed portfolio

Frequently Asked Questions

Q:Who actually certifies that HLAL is halal?

A:Yasaar Limited, an independent Shariah advisory firm, screens every constituent of the FTSE Shariah USA Index that HLAL tracks, and the index series has been fully certified as Shariah-compliant through the issue of a fatwa (Islamic legal opinion) by Yasaar's principals. On top of the index-level certification, Wahed publishes an annual Shariah Supervisory Board report for the fund — the 2021 through 2024 reports are posted on the fund page — plus quarterly purification figures on HLAL dividends. That is a meaningfully deeper compliance trail than most products carrying a halal label: a named screening firm, a published fatwa, annual board audits, and per-dividend purification data you can download as a CSV. If you want independent confirmation, both Musaffa and Zoya screen HLAL and its underlying holdings.

Q:What is the difference between the FTSE Shariah screen HLAL uses and the AAOIFI standard?

A:Both run a two-stage screen — business activity first, then financial ratios — but the thresholds and the denominator differ. AAOIFI Shari'ah Standard 21 caps interest-bearing debt at 30% of market capitalization, cash plus interest-bearing securities at 30% of market capitalization, and impermissible income at 5% of total income. The FTSE Shariah methodology caps debt at 33.33% of total assets, cash plus interest-bearing items at 33.33% of total assets, accounts receivable plus cash at 50% of total assets, and impure income at under 5% of revenue. Using total assets instead of market cap makes FTSE's screen more stable through market swings, but the 33.33% ceilings are looser than AAOIFI's 30%. The practical consequence: a small number of stocks can pass FTSE's screen while failing a strict AAOIFI screen. Most scholars accept FTSE Shariah as a legitimate methodology — it is fatwa-backed — but if you follow AAOIFI strictly, run HLAL's holdings through Musaffa or Zoya and decide whether the marginal names matter to you.

Q:Do I need to purify HLAL dividends?

A:Yes. Even a screened, certified fund earns trace amounts of non-permissible income — interest on operational cash at portfolio companies, for example — and that fraction must be purified by donating it to charity. HLAL distributes income annually and yields roughly 0.45%, so the dollar amounts are small: on a $100,000 position the full year's distributions are about $450, and the purifiable fraction is a small slice of that. Wahed does the math for you — it publishes a quarterly purification file on HLAL dividends (the Q1 2026 figures are posted on the fund page as a CSV) showing the per-share amount to donate. Note the purification donation is a religious obligation, not a CRA-recognized offset — you cannot deduct it against investment income unless it independently qualifies as a charitable donation to a registered Canadian charity.

Q:Can I hold HLAL in a TFSA or RRSP in Canada?

A:Yes — HLAL is a US-listed ETF (Nasdaq) and is a qualified investment for TFSAs, RRSPs, FHSAs, and RESPs. The account choice changes the tax outcome. In an RRSP, US dividends are exempt from US withholding tax under the Canada-US treaty, so HLAL is clean. In a TFSA or FHSA, the IRS withholds 15% of every dividend and that money is gone — there is no foreign tax credit inside a registered account. Because HLAL yields only about 0.45%, the leak is small: roughly $68 a year on a $100,000 position. In a non-registered account the 15% withholding also applies but you can claim a foreign tax credit, and a position with a cost above $100,000 CAD triggers Form T1135 foreign-property reporting. You will also need US dollars to buy it, which means a currency conversion cost unless your brokerage supports a cheap conversion route.

Q:Is HLAL better than WSHR or SPUS for a Canadian investor?

A:They solve different problems. HLAL (0.50% expense ratio) gives you 211 US stocks screened against the FTSE Shariah USA Index — it is the broadest pure-US halal equity fund. SPUS (0.45%) screens the S&P 500 down to its compliant members, so it is large-cap US with a slightly lower fee. WSHR (0.50% management fee, 0.56% MER all-in) is the only one of the three listed in Canada — it trades in Canadian dollars on Cboe Canada, holds a globally diversified Shariah-screened portfolio, avoids the USD conversion cost, and sidesteps T1135 reporting in non-registered accounts because Canadian-listed funds are not specified foreign property. A common structure: WSHR in the TFSA (no USD conversion, no US-listed withholding complication), HLAL or SPUS in the RRSP where the treaty exemption applies. The fee difference between the three is at most 11 basis points — $110 a year on $100,000 between SPUS and WSHR's all-in MER — so account logistics matter more than the fee gap.

Q:Is HLAL too concentrated in technology?

A:It is concentrated, and you should hold it knowing that. As of June 5, 2026, the top 10 holdings are 54% of the fund: Apple alone is 13.5%, Microsoft 9.1%, and Alphabet's two share classes combine to 11.5%. That is the structural consequence of Shariah screening a US index — when you remove conventional banks, insurers, and highly leveraged firms, the surviving universe skews hard toward large-cap technology and healthcare. This is a risk profile question, not a compliance question: HLAL passes the screen, but it will swing harder than a diversified conventional index in a tech drawdown. If concentration worries you, pairing HLAL with a globally diversified screened fund like WSHR reduces the single-sector exposure while keeping the portfolio compliant.

Q:Why not just buy XEQT or VFV and purify the haram portion instead?

A:Because purification cannot fix a structurally non-compliant fund. Purification exists for trace impermissible income inside holdings that already pass the screen — the under-5% fraction. XEQT and VFV hold conventional banks and insurers as core positions; financials are roughly 11-13% of the S&P 500 and more than that in broad Canadian indexes. You cannot donate away 15% of a portfolio and call the rest halal — no mainstream screening methodology (AAOIFI, FTSE, S&P/DJIM, or MSCI Islamic) endorses purify-and-hold for funds that fail the business-activity screen. HLAL solves the problem at the index level: the prohibited businesses are excluded before the fund buys anything, and what remains is certified by fatwa. The honest cost of that is a higher fee — 0.50% versus roughly 0.09-0.10% for an unscreened S&P 500 ETF like XUS — which is about $400 more per year on $100,000.

Question: Who actually certifies that HLAL is halal?

Answer: Yasaar Limited, an independent Shariah advisory firm, screens every constituent of the FTSE Shariah USA Index that HLAL tracks, and the index series has been fully certified as Shariah-compliant through the issue of a fatwa (Islamic legal opinion) by Yasaar's principals. On top of the index-level certification, Wahed publishes an annual Shariah Supervisory Board report for the fund — the 2021 through 2024 reports are posted on the fund page — plus quarterly purification figures on HLAL dividends. That is a meaningfully deeper compliance trail than most products carrying a halal label: a named screening firm, a published fatwa, annual board audits, and per-dividend purification data you can download as a CSV. If you want independent confirmation, both Musaffa and Zoya screen HLAL and its underlying holdings.

Question: What is the difference between the FTSE Shariah screen HLAL uses and the AAOIFI standard?

Answer: Both run a two-stage screen — business activity first, then financial ratios — but the thresholds and the denominator differ. AAOIFI Shari'ah Standard 21 caps interest-bearing debt at 30% of market capitalization, cash plus interest-bearing securities at 30% of market capitalization, and impermissible income at 5% of total income. The FTSE Shariah methodology caps debt at 33.33% of total assets, cash plus interest-bearing items at 33.33% of total assets, accounts receivable plus cash at 50% of total assets, and impure income at under 5% of revenue. Using total assets instead of market cap makes FTSE's screen more stable through market swings, but the 33.33% ceilings are looser than AAOIFI's 30%. The practical consequence: a small number of stocks can pass FTSE's screen while failing a strict AAOIFI screen. Most scholars accept FTSE Shariah as a legitimate methodology — it is fatwa-backed — but if you follow AAOIFI strictly, run HLAL's holdings through Musaffa or Zoya and decide whether the marginal names matter to you.

Question: Do I need to purify HLAL dividends?

Answer: Yes. Even a screened, certified fund earns trace amounts of non-permissible income — interest on operational cash at portfolio companies, for example — and that fraction must be purified by donating it to charity. HLAL distributes income annually and yields roughly 0.45%, so the dollar amounts are small: on a $100,000 position the full year's distributions are about $450, and the purifiable fraction is a small slice of that. Wahed does the math for you — it publishes a quarterly purification file on HLAL dividends (the Q1 2026 figures are posted on the fund page as a CSV) showing the per-share amount to donate. Note the purification donation is a religious obligation, not a CRA-recognized offset — you cannot deduct it against investment income unless it independently qualifies as a charitable donation to a registered Canadian charity.

Question: Can I hold HLAL in a TFSA or RRSP in Canada?

Answer: Yes — HLAL is a US-listed ETF (Nasdaq) and is a qualified investment for TFSAs, RRSPs, FHSAs, and RESPs. The account choice changes the tax outcome. In an RRSP, US dividends are exempt from US withholding tax under the Canada-US treaty, so HLAL is clean. In a TFSA or FHSA, the IRS withholds 15% of every dividend and that money is gone — there is no foreign tax credit inside a registered account. Because HLAL yields only about 0.45%, the leak is small: roughly $68 a year on a $100,000 position. In a non-registered account the 15% withholding also applies but you can claim a foreign tax credit, and a position with a cost above $100,000 CAD triggers Form T1135 foreign-property reporting. You will also need US dollars to buy it, which means a currency conversion cost unless your brokerage supports a cheap conversion route.

Question: Is HLAL better than WSHR or SPUS for a Canadian investor?

Answer: They solve different problems. HLAL (0.50% expense ratio) gives you 211 US stocks screened against the FTSE Shariah USA Index — it is the broadest pure-US halal equity fund. SPUS (0.45%) screens the S&P 500 down to its compliant members, so it is large-cap US with a slightly lower fee. WSHR (0.50% management fee, 0.56% MER all-in) is the only one of the three listed in Canada — it trades in Canadian dollars on Cboe Canada, holds a globally diversified Shariah-screened portfolio, avoids the USD conversion cost, and sidesteps T1135 reporting in non-registered accounts because Canadian-listed funds are not specified foreign property. A common structure: WSHR in the TFSA (no USD conversion, no US-listed withholding complication), HLAL or SPUS in the RRSP where the treaty exemption applies. The fee difference between the three is at most 11 basis points — $110 a year on $100,000 between SPUS and WSHR's all-in MER — so account logistics matter more than the fee gap.

Question: Is HLAL too concentrated in technology?

Answer: It is concentrated, and you should hold it knowing that. As of June 5, 2026, the top 10 holdings are 54% of the fund: Apple alone is 13.5%, Microsoft 9.1%, and Alphabet's two share classes combine to 11.5%. That is the structural consequence of Shariah screening a US index — when you remove conventional banks, insurers, and highly leveraged firms, the surviving universe skews hard toward large-cap technology and healthcare. This is a risk profile question, not a compliance question: HLAL passes the screen, but it will swing harder than a diversified conventional index in a tech drawdown. If concentration worries you, pairing HLAL with a globally diversified screened fund like WSHR reduces the single-sector exposure while keeping the portfolio compliant.

Question: Why not just buy XEQT or VFV and purify the haram portion instead?

Answer: Because purification cannot fix a structurally non-compliant fund. Purification exists for trace impermissible income inside holdings that already pass the screen — the under-5% fraction. XEQT and VFV hold conventional banks and insurers as core positions; financials are roughly 11-13% of the S&P 500 and more than that in broad Canadian indexes. You cannot donate away 15% of a portfolio and call the rest halal — no mainstream screening methodology (AAOIFI, FTSE, S&P/DJIM, or MSCI Islamic) endorses purify-and-hold for funds that fail the business-activity screen. HLAL solves the problem at the index level: the prohibited businesses are excluded before the fund buys anything, and what remains is certified by fatwa. The honest cost of that is a higher fee — 0.50% versus roughly 0.09-0.10% for an unscreened S&P 500 ETF like XUS — which is about $400 more per year on $100,000.