Is the Wahed FTSE USA Shariah ETF (HLAL) Halal? A Published Fatwa, Four Annual Board Reports, and a Purification Rate That Is Flat 5 Percent in Every Quarter Since 2019: A Sharia Analysis for Muslim Investors (2026)

Author: Zaid Alissa, CTO and Halal Finance Researcher | Published: September 2026 | Updated: September 2026

No exchange traded fund trades under the ticker HALAL. The fund people mean when they say it is the Wahed FTSE USA Shariah ETF, Nasdaq ticker HLAL, and that is the fund this article examines.

It has something none of the other nine products in this series has: a published fatwa. The Shariah Certificate on Wahed's own product page is dated 5 September 2019, signed by four scholars of the Wahed Financial Ethics Review Board, and it says in terms what it reviewed and what it concluded. Alongside it sit Shariah Supervisory Board Reports for 2021, 2022, 2023 and 2024, and a quarterly purification file. That is a governance stack, not a marketing page, and it deserves to be recognised as one.

It also has something worth looking at closely. The purification file publishes a dividend and a purification amount for every quarter since 2019. Divide the second by the first in each of those quarters and the answer is the same every time: 5.00 percent. Not a computed figure that moves with the underlying companies' income, but a flat rate equal to the maximum non compliant income the index screen tolerates. Whether that is the right way to purify is a real question, and the file itself does not say which it is doing.

Fund facts from wahed.com and from stockanalysis.com as at 3 September 2026. The numbers reconcile: 13,000,000 shares at the 72.67 dollar previous close is 13,000,000 times 72.67, which is 944,710,000 dollars, against reported assets of 944.76 million, a difference of 0.005 percent.

The top ten are reported at 58.03 percent of assets: NVIDIA 12.90, Apple 11.05, Microsoft 9.24, Alphabet class A 5.05, Broadcom 4.87, Alphabet class C 4.09, Meta Platforms 3.27, Micron Technology 2.68, Tesla 2.49 and Eli Lilly 2.38. Add the published components and you get 12.90 plus 11.05 plus 9.24 plus 5.05 plus 4.87 plus 4.09 plus 3.27 plus 2.68 plus 2.49 plus 2.38, which is 58.02. The reported group figure is 58.03. The gap is a hundredth of a point of rounding across ten weights, and it is mentioned only because this series checks its arithmetic rather than copying it.

NVIDIA and Apple together are 12.90 plus 11.05, which is 23.95 percent of the fund. This is a concentrated holding.

Allah says in Surah Al-Baqarah, verse 275:

وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا

"But Allah has permitted trade and has forbidden interest [riba]." (Saheeh International)

A published opinion is not the same as a compliance claim on a factsheet, and the difference is that an opinion tells you what was examined.

Wahed's Shariah Certificate, dated 5 September 2019, sets out its own methodology. The board collected and reviewed the product's documentation, naming the prospectus, the Statement of Additional Information, the FTSE Shariah USA Index factsheet, the FTSE Global Equity Shariah Indices methodology and the index constituent equities list. It also reviewed third party agreements, naming the Wahed advisory agreement, the distribution agreement and the FTSE Russell framework agreement. Its conclusion is one sentence: "We find that it is permissible (halāl) to invest in (i.e. trade in shares of) the Product."

Read that methodology carefully, because it tells you the boundary of the opinion. The board reviewed the index rules and the fund's contracts. It did not re-screen the constituents itself; the screening is FTSE's, certified by FTSE's own Yasaar board. Two boards, two jobs, and neither certifies the other's work. That is normal practice in the industry and it is stated plainly here rather than presented as a gap.

The four annual Shariah Supervisory Board Reports add something the certificate cannot: evidence that somebody looked again after 2019. An investor comparing Islamic funds should weigh a provider that publishes a dated annual report against one that publishes a logo.

This is the part of the article that took the longest and it is the part worth reading.

Wahed publishes a purification file giving, for every quarter since the fund launched, the dividend per share and the purification amount per share. Take the most recent full pair. In the first quarter of 2026 the dividend was 0.077 dollars a share and the purification amount 0.00385 dollars a share. Divide: 0.00385 divided by 0.077 is 0.05, that is 5.00 percent.

Run the same division on every published quarter and it comes back 5.00 percent every time, in 2026, 2025, 2024 and 2023. The file itself removes any doubt about earlier years, because from 2019 to 2022 the rows are labelled "Purification (5%)".

So the number is not computed from the companies' interest income. It is a flat rate, and the rate chosen is 5 percent, which is exactly the maximum non compliant income the FTSE Yasaar screen permits a constituent to earn.

Compare the other fund in this series that publishes a figure. SP Funds computes a factor for SPUS that moves: 1.81 percent for the first quarter of 2026, and 2.20, 2.12, 2.04 and 1.97 for the four quarters of 2025. Wahed's flat 5.00 percent is 5.00 divided by 1.81, which is 2.76 times the most recent SPUS factor.

The practical consequence for a holder is straightforward and worth working. On 1,000 shares in the first quarter of 2026 the dividend was 1,000 times 0.077, which is 77 dollars, and the purification amount 1,000 times 0.00385, which is 3 dollars 85 cents. Confirm it the other way: 77 times 0.05 is 3.85.

Mufti Taqi Usmani, in "Principles of Shari'ah Governing Islamic Investment Funds", requires the proportion of impure income in the dividend to be given in charity and not retained. A flat 5 percent almost certainly exceeds that proportion, which means a holder following Wahed's figure gives away more than the duty strictly requires. That is the safe direction to err in, and nobody should be discouraged from it. It is still worth knowing that you are being handed a ceiling rather than a calculation, because the two answer different questions.

The index rules come from the Yasaar Shariah Supervisory Board Opinion for the FTSE Yasaar Global Equity Shariah Index Series, dated 3 February 2025 and signed by three scholars, published by LSEG.

The excluded activities are wider than most readers will expect. Interest bearing investments including loans and deposits based on interest. Forward currency transactions. Alcohol and tobacco. Gaming and gambling. Weapons and defence related products. Pork. Conventional banking, insurance and any other interest based financial services. Pornography. And, explicitly, derivatives, including futures, options and contracts for differences.

That last one is worth pausing on. Yasaar excludes companies whose core activity is derivatives, by name. MSCI's Islamic methodology names alcohol, tobacco, pork, conventional financial services, defence and weapons, gambling, music, hotels, cinema and adult entertainment, but does not name derivatives trading or forward currency dealing as separate categories. The two rulebooks are close on most of the list and not identical, and an investor choosing between funds is choosing between lists.

The financial ratios, all measured against total assets:

Companies are reviewed quarterly. One whose debt or cash ratio moves outside 33.333 percent plus or minus 5 percent, which the opinion states as below 31.667 percent or above 35 percent, is monitored, and its compliance changes only if it stays outside the band for two consecutive quarters.

AAOIFI's thresholds are as Mufti Faraz Adam sets them out in "Making Sense of the 30% Rule in Islamic Finance" (Amanah Advisors, 14 December 2020). AAOIFI Shari'ah Standard No. 21 on Financial Paper is the standard behind them.

The line that matters most is the third. FTSE Yasaar caps receivables and cash at less than 50 percent of total assets; MSCI's threshold is 70.00 percent. That is 70.00 minus 50.00, or 20 percentage points, and it is not a technicality. It is the index world's version of the classical condition that a company must hold enough real assets, rather than mostly cash and debts, for its shares to be traded at all. On that specific test, the rulebook behind HLAL is the strictest of the three. You can apply AAOIFI's version of these tests to any individual holding with our stock screener.

AAOIFI Shari'ah Standard No. 31 on Controls on Gharar in Financial Transactions asks whether the object of the contract is adequately knowable. Here it largely is. The index rules are published by LSEG with a dated board opinion, the fund's holdings are published, the fatwa states its own scope, and the purification file goes back to launch. Ferri's complaint about products where "not enough public information is available to determine" what the rule is (The ETF Book, 2008, p. 139) does not apply.

The one thing not stated is the one this article had to derive: that the purification figure is a flat rate rather than a computed one. A line on the page saying so would remove the ambiguity entirely.

On maysir there is nothing to report. Long only, physically held US equities, no derivatives, no leverage, no short positions. The behavioural risk sits with the investor, and Ferri's warning that intraday dealing "may cause some investors to trade too much" (p. 101) is the applicable one.

Cost. At 0.50 percent HLAL is the most expensive fund in this series of ten. Against Ferri's category averages, 0.21 percent for market index ETFs and 0.51 percent for custom index ETFs (p. 200), it sits essentially at the custom index average, 0.51 minus 0.50, that is 0.01 percentage points below it. Against the Vanguard S&P 500 ETF at 0.03 percent the gap is 0.50 minus 0.03, which is 0.47 percentage points, or 10,000 times 0.0047, that is 47 dollars a year on 10,000 dollars.

Scale. At 944.76 million dollars the fund is well past the point where Ferri's warning about a "critical level of assets needed to make a fund profitable" (p. 33) bites, though it is 3,128.73 divided by 944.76, which is 3.31 times smaller than SPUS.

Concentration. Top ten at 58.02 percent by the published components. Ferri's note that index caps are typically between 5 and 10 percent (p. 118) has no application here because there is no cap doing that work, and NVIDIA at 12.90 percent and Apple at 11.05 percent are both well above the range.

Index type. On Ferri's grid this is screened selection with capitalisation weighting, a custom index (p. 127, p. 134), and his cautions about concentration and about screening being "an active investment management decision" (p. 145) apply. So does his finding that there is "no academic evidence to indicate that screening securities will improve market performance in the long-term after adjusting for portfolio risk" (p. 146), which is a reason to buy this fund for compliance rather than for return. Our portfolio design article covers sizing a concentrated screened holding, and the crypto screener applies the same discipline to any digital asset sleeve.

Flat rate purification against computed purification. Wahed applies the screen's 5 percent ceiling to every dividend. SP Funds computes a figure that varies. A scholar who holds that the duty is discharged by giving away at least the impure proportion will find the flat rate perfectly adequate and safer than a computed one. A scholar who holds that purification must be of the actual amount, neither more nor less, will say that a ceiling is not a calculation even when it is larger, and that the surplus is a voluntary charity rather than a discharge of the obligation. Both views are held and this article does not choose between them.

The purification base. Both providers compute on dividends received. The stricter position is that the shareholder owes on his proportionate share of the company's impure income whether or not it was distributed, which for a fund yielding 0.44 percent would be a much larger number than any dividend based figure.

The scope of a product fatwa. The Wahed certificate reviews the index methodology and the fund's contracts. It does not re-screen constituents, and it says so. Whether a product level opinion that relies on an index level certification is sufficient assurance is a question on which practitioners differ, and the honest answer is that this is how the entire Islamic index fund industry works.

Read the fatwa and read its methodology section, not just its conclusion. The scope of an opinion is the most useful part of it.

Use the purification file, and understand what it gives you. Multiply your shares by the published purification per share. On 1,000 shares in the first quarter of 2026 that is 3 dollars 85 cents. If you would rather give the computed amount than the ceiling, you will need to do the work yourself, because the file does not give it.

Do not treat 0.50 percent as free. It is 47 dollars a year on 10,000 dollars more than the cheapest unscreened S&P 500 tracker. That is the price of the screen, the fatwa and the annual reports, and for many investors it is worth paying. It should still be named.

Size for the concentration. Fifty eight percent in ten names, with two of them near a quarter of the fund between them, is a concentrated equity position wearing an index fund's label.

Compare the receivables and cash limits, not just the debt limits, when you choose between screened funds. On that test the rulebook behind this fund is the strictest of the three covered in this series.

HLAL is the best governed product in this series. A dated fatwa that states its own scope, four annual board reports, a purification file going back to launch, and an index rulebook published with its own board opinion. That is more disclosure than most Muslim investors have ever been offered, and Wahed deserves the credit.

The two things to know before buying are that the purification figure is a flat 5 percent rather than a computed proportion, which is conservative but is not what most readers will assume it is, and that at 0.50 percent this is the most expensive fund covered here, holding 58 percent of its money in ten names.

This article is educational and is not a fatwa. Consult a qualified scholar for a ruling on your own circumstances.

No. No exchange traded fund trades under that ticker. The Wahed FTSE USA Shariah ETF trades on Nasdaq as HLAL, and that is the fund this article is about.

It is a flat 5.00 percent of the dividend. Dividing the published purification per share by the published dividend per share gives 5.00 percent in every quarter from 2019 to the second quarter of 2026, and the file's own rows for 2019 to 2022 are labelled "Purification (5%)". Five percent is the maximum non compliant income the FTSE Yasaar screen tolerates in a constituent, so the rate is the screen's ceiling rather than a computed proportion.

It is almost certainly more than enough in amount, because a computed factor for a comparable US screened fund was 1.81 percent for the same quarter, and 5.00 divided by 1.81 is 2.76. Whether giving more than the computed proportion discharges the obligation exactly, or discharges it and adds a voluntary charity, is a question scholars answer differently. Nobody holds that it is too little.

It states its own scope. The board reviewed the prospectus, the Statement of Additional Information, the FTSE index factsheet and methodology, the constituent list, and the advisory, distribution and FTSE Russell agreements, and concluded that it is permissible to invest in the product. It did not re-screen the constituent companies; that is FTSE's Yasaar board's work.

The debt and cash thresholds are close, 33.333 percent of total assets against 33.33 percent. The receivables and cash limit is not: Yasaar caps it at less than 50 percent of total assets while MSCI's threshold is 70.00 percent, a 20 percentage point difference. Yasaar also names derivatives and forward currency transactions as excluded core activities, which MSCI's list does not.

At 0.50 percent it is 0.05 percentage points above the 0.45 percent charged by the SP Funds S&P 500 Sharia Industry Exclusions ETF, and it is 3.31 times smaller by assets. Smaller funds spread fixed costs over less money. Ferri puts the average custom index ETF at 0.51 percent, so neither fund is out of line for its category.

HLAL is a US domiciled fund listed on Nasdaq, and US domiciled ETFs are generally not available to UK retail clients through UK brokers, quite apart from the different withholding and estate tax treatment. A UK investor wanting Sharia screened US equity exposure will normally be choosing among the UCITS funds covered elsewhere in this series.