Portfolio Construction · Halal ETF Analysis · Model Portfolios
A quantitative comparison of the five Shariah-compliant ETFs available to Canadian investors across performance, cost, diversification and risk — then six model portfolios, each pairing a different ETF core with the individual stocks I cover (the satellites) to show how the same satellites behave on different foundations.
Account note: SPUS, HLAL, MNZL and SPSK are US-listed and denominated in USD — a Canadian investor needs a USD investment account to hold them. WSHR is denominated in CAD and trades on Cboe Canada, so it is the one core here that needs no USD account.
Quantitative Comparison
The five Shariah-compliant ETFs accessible to Canadian investors. Note the currency column: only WSHR is CAD-denominated; the other four require a USD account. Data sourced from fund providers, SEC filings, stockanalysis.com, and portfolioslab.com. AUM as of May 2026. Returns are total return (price + dividends reinvested).
| ETF | Full Name | Index Tracked | Inception | AUM | Currency | Expense Ratio | Holdings | Exchange | Divs | CAGR Since Inception |
|---|---|---|---|---|---|---|---|---|---|---|
| SPUS | SP Funds S&P 500 Sharia Industry Exclusions ETF | S&P 500 Shariah Industry Exclusions Index | Dec 2019 | ~$1.93B | USD | 0.45% | ~215 | NYSE Arca (US) | Distributes | 17.16% p.a. |
| HLAL | Wahed FTSE USA Shariah ETF | FTSE Shariah USA Index | Jul 2019 | ~$700M | USD | 0.50% | ~197 | NASDAQ (US) | Distributes | 16.48% p.a. |
| MNZL | Manzil Russell Halal USA Broad Market ETF | Russell IdealRatings Manzil Halal USA Broad Market Index | Nov 2025 | <$50M | USD | 0.40% | ~450 | NASDAQ (US) | Distributes | Insufficient history |
| SPSK | SP Funds Dow Jones Global Sukuk ETF (Islamic bonds) | Dow Jones Sukuk Total Return Index | Dec 2019 | ~$100M | USD | 0.55% | ~50 | NYSE Arca (US) | Distributes monthly | ~3–4% p.a. |
| WSHR | Wealthsimple Shariah World Equity Index ETF (Mackenzie) | DJ Islamic Mkt Developed Markets Quality & Low Volatility Index | May 2021 | ~$450M CAD | CAD | 0.57% | ~162 | Cboe Canada | Distributes quarterly | ~6–7% p.a. |
Historical Performance
All total returns including dividends reinvested. S&P 500 included as conventional benchmark.
Both halal US ETFs outperformed the index — a heavy tech weighting was the tailwind.
SPUS's larger mega-cap tech overweight produced exceptional outperformance. HLAL slightly underperformed vs S&P 500 due to different index composition.
Key finding: WSHR's low-volatility, globally diversified design gave it the shallowest drawdown of all (−11.3%). HLAL beat SPUS too (−17.6% vs −22.8%). SPUS's heavier tech concentration hurt most.
Both US halal ETFs outperformed the S&P 500 as Nvidia, Microsoft, Apple, and Meta drove the recovery. WSHR's low-vol, defensive tilt meant it sat out most of the AI rally (+11.9%) — the mirror image of its 2022 resilience.
SPUS narrowly outperformed. HLAL and WSHR both lagged the mega-cap-led market — WSHR by design, as its low-vol screen steers away from the high-beta names that drove the year.
SPUS and HLAL converged and both edged out the S&P 500 as returns broadened. WSHR trailed again (+5.4%) — three straight years confirm its profile: shallow losses, muted gains, lowest beta of the set.
📊 Since-Inception CAGR — Total Return
⚠ Period bias: SPUS and HLAL inceptions (2019–2026) coincide with a tech-heavy bull market, so their 16–17% since-inception CAGRs flatter the asset class. A more honest long-run expectation for halal US equity is closer to the ~10% range once a full cycle — including a 2008-style drawdown — is accounted for. WSHR's ~6–7% reflects its deliberate low-volatility design, not weakness — it trades upside for resilience. MNZL is too new to judge.
Individual Assessments
Critical Analysis
SPUS vs HLAL — Key Difference
Despite a 0.94 correlation, they track different indices with meaningfully different exclusions. SPUS explicitly excludes aerospace/defense AND financial data companies (S&P Global, ICE, FactSet). HLAL includes those. This makes SPUS the purer halal screen. HLAL's better 2022 drawdown (−17.6% vs −22.8%) suggests its mid-cap inclusion provides a genuine diversification benefit during growth sell-offs.
Period Bias Warning
SPUS and HLAL's since-inception CAGRs of 17% and 16% are exceptional — but their inception in 2019–2020 coincides with one of the strongest tech bull markets in history. The 14–16% annualised returns came predominantly from technology sector overweight and quality factor loadings. A full market cycle that includes a 2008-style drawdown would almost certainly pull the long-run figure down toward the ~10% range — the more honest planning assumption.
HLAL's Quiet Case
HLAL is more than an SPUS clone. It tracks a different index (FTSE Shariah USA), includes some names SPUS screens out, and reaches a little further down the cap spectrum. That cost it ground in the mega-cap-led years of 2024–2025 — but it also delivered a meaningfully softer 2022 drawdown (−17.6% vs −22.8%). For a Canadian investor who wants US halal beta without doubling down entirely on the same top-ten tech names SPUS leans on, pairing the two is the cleanest available diversification.
Concentration Risk
SPUS (57% in top 10) and HLAL (54%) are both heavily concentrated in Nvidia, Apple, Microsoft, Amazon, Alphabet, and Meta — the same names that dominate any US large-cap index. This tech concentration was a return tailwind in 2020–2025 and a real risk in 2022. The mitigations now run three ways: pair SPUS with HLAL to vary the index methodology; add WSHR for genuinely different, globally diversified, low-concentration exposure (its top-10 is only ~9%); and lean on the satellites — individually chosen names that can deliberately reduce overlap with those top-ten holdings.
WSHR — The Different One
WSHR is the structural outlier of the five. It is the only CAD-denominated fund (no USD account required), the only globally diversified one, and the only one that weights by risk rather than market cap — its top holdings are defensive staples like Coca-Cola, Nestlé, J&J and Roche, not mega-cap tech. The result is the lowest beta (~0.66), the lowest concentration (~9% top-10), and the shallowest 2022 drawdown (−11.3%) of the set — paid for with muted upside in tech-led rallies and the highest fee (0.57%). It is less a competitor to SPUS than a complement to it.
Portfolio Construction
The plan: six portfolios I intend to build, simulate, and back-test. In each of the first five, the investor picks one of the five ETFs as their core holding and adds the satellites — the individual stocks I cover — on top. The satellites may or may not come from the same index the chosen ETF tracks, so each ETF-core-plus-satellite combination produces a genuinely different portfolio. The sixth combines all five ETFs and all the satellites at optimal weights.
Status: the weights below are illustrative starting points. The simulations and back-tests that will set the actual weights — especially the optimal blend in Model 6 — are planned work, not yet complete. This page lays out the structure; the empirical results will follow.
Model 1 · SPUS Core + Satellites
Character: the highest-beta, most growth-tilted core. Best historical returns, most exposed to a tech-led drawdown. The simplest one-fund core for an investor who wants pure US large-cap halal beta.
Overlap to manage: several satellites (Alphabet, Microsoft) already sit near the top of SPUS. On this core, weight them down — the satellites earn their keep through the names SPUS doesn't emphasise.
Model 2 · HLAL Core + Satellites
Character: a more defensive twin of Model 1. Gives up some of SPUS's bull-market upside for better downside behaviour. For an investor who wants US halal beta with a gentler ride.
Pairs well with: the small-cap value satellites. HLAL's defensiveness and the SMB tilt reinforce each other in a sell-off.
Model 3 · MNZL Core + Satellites
Character: the most diversified US core — and the most speculative as a fund, given its <6-month record and sub-$50M AUM. A slightly lower core weight reflects that liquidity caveat until the fund scales.
Watch item: revisit the core weight as MNZL's AUM grows. At $200M+ and a longer record, this becomes a much stronger standalone core.
Model 4 · SPSK Core + Satellites (income-tilted)
Character: the outlier. A sukuk core trades equity upside for income and stability, so this model behaves nothing like the equity-cored ones. It suits an investor near or in drawdown — capital preservation and cash flow first, with the satellites providing measured growth.
Honest caveat: with a bond core, expected total return is well below the equity-cored models. This is a risk-reduction structure, not a return-maximising one.
Model 5 · WSHR Core + Satellites (CAD account)
Character: the only model a Canadian can run in a plain CAD account, and the most defensive equity core. Global staples instead of US mega-cap tech means the shallowest drawdowns but muted upside in tech rallies. The natural choice for an investor who wants halal equity exposure without a USD account or a tech-concentration bet.
Most complementary pairing: a defensive global core plus a concentrated US-quality satellite book may be the cleanest core-and-satellite split of the five — least overlap, most distinct roles.
Model 6 · Optimal Blend — All Five ETFs + All Satellites
Why blend: no single ETF wins on every axis — SPUS on return, HLAL on drawdown, WSHR on diversification and currency, MNZL on breadth, SPSK on stability. Weighting all five lets each contribute its strength while the others offset its weakness. These weights are placeholders — the optimisation that sets them is the back-testing work still to come.
The fullest expression: the model that uses everything — diversified ETF beta across two currencies, an income cushion, and a concentrated quality satellite book. Also the most work to maintain. Models 1, 2 and 5 are simpler and most of the way there.
The Six Models at a Glance
| Model | ETF Core | Account | Core % | Satellites % | Character |
|---|---|---|---|---|---|
| Model 1 | SPUS only | USD | 65% | 35% | Highest beta, highest historical return, most tech-concentrated |
| Model 2 | HLAL only | USD | 65% | 35% | More defensive twin of Model 1; softer drawdowns |
| Model 3 | MNZL only | USD | 60% | 40% | Broadest, lowest-concentration US core; liquidity caveat |
| Model 4 | SPSK only | USD | 60% | 40% | Income / capital-preservation tilt; lowest expected return |
| Model 5 | WSHR only | CAD | 65% | 35% | Global, low-vol, CAD-denominated; most complementary to satellites |
| Model 6 | All five, weighted | USD + CAD | 65% | 35% | Fullest expression; each ETF contributes its strength (weights TBD by back-test) |
All six share the same satellites — the constant across every model; only the core changes. Direct stocks carry no management fee, just brokerage commissions, so a larger satellite weight lowers blended cost. Every weight here is an illustrative starting point pending simulation and back-testing. Not investment advice.
Ongoing Management
Rebalancing Trigger
Rebalance when any holding drifts more than ±5 percentage points from target (e.g., the core reaches 42% or falls to 28%). Annual review minimum. The S&P Shariah and FTSE Shariah indices rebalance quarterly — your ETFs self-adjust, but your satellite stocks need active monitoring against the three screens (sin, lending, CFO quality).
What to Monitor Quarterly
1. CFO trend per satellite stock (latest 10-K/Q on EDGAR). 2. Confirm no new lending/interest revenue segment in satellite holdings. 3. ETF AUM and tracking error (MNZL and SPSK are still building scale). 4. Run the FF5 regression on the portfolio — does the RMW loading hold above +0.25? If it drifts toward zero, the quality tilt is eroding.
When to Increase Satellite Weight
Raise the satellite allocation toward 40% when: (a) 3+ years of live tracking confirm satellite alpha vs the ETF core; (b) you have high conviction in 3–5 specific names that cannot be replicated by the ETF; (c) you have time to monitor 20+ positions quarterly. Otherwise, start closer to 20% satellites and 80% core.
Not investment advice. This analysis is for informational and educational purposes only. Past performance of any ETF does not guarantee future returns. The model portfolios above are illustrative frameworks — not personalised recommendations. ETF performance data sourced from stockanalysis.com, portfolioslab.com, and fund provider websites; verify against primary prospectuses before investing. All halal screening determinations should be independently verified against current S&P Shariah, FTSE Shariah, AAOIFI, or equivalent methodology. Consult a licensed financial advisor before making any investment decision.