Building Halal S&P500 composition in sectors / individual companies

Has anyone tried to build a composition of S&P 500 sectors or individual companies but considering only the (mostly) halal sectors and excluding non-sharia compliant sectors or individual companies just to minimalize the non-sharia compliant percentage. I’m trying to do so but I find it so hard to implement.

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Assalaamu Alykum Issalem, welcome to the community! Great to have you with us.

This would be really cool. I’m thinking maybe if you start from SPUS holdings and then check what sector those holdings are in. There are about 200 stocks in it right now, so it I don’t think it’ll take too long.

How have you tried doing it? What are the issues you’ve been coming across?

Wa Alaykum El Salam,

I’m using broker Trading212 and it has a feature to set up a pie for investments so I am trying instead of adding individual companies to add SP500 sectors ETFs as it’s easier (also this pie feature can’t have more than 50 items).

but I’m still thinking about how can I evaluate the sharia-compliant percentage for each of these sectors also I’m not sure if it’s a good idea as still these sectors ETFs aren’t fully sharia-compliant.

also, another option I’m thinking about is to add the top 50 halal companies in the S&P 500 similar to this index

so I would like to see if someone has done something similar to avoid the high expenses ratio of the islamic ETFs also to be always updated with the S&P 500.

If you’re open to adding the top 50 ish halal companies, I really think SPUS is a good place to start. That way you won’t need to screen for shariah compliance since the SPUS is doing that already* (some community members disagree). You can always check the fund in Zoya and double-check as well.

I’m not familiar with Tradind212, but I’m sure other Zoyans based on the UK would be more familiar.

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Thanks a lot for your help :slight_smile:

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I’ve kinda of tried this but with stocks that only give out dividends. Used Vanguards SP500 ETF when thru their list starting from largest cap then cross checking with Zoya which one is shariah compliant.

Wa’alaykumus Salaam, yes I have filtered out the non-shariah compliant companies from the S&P 500 list to create my own “Halal S&P 100” list. The compliant count was higher than 100, but then I picked the top 100 based on their market cap. Then I created a cap weighted portfolio. Buying and selling 100 symbols is time consuming so is the regular maintenance of the list, which I try to do every quarter.

Currently I’m testing the performance of this “Halal S&P 100” vs. S&P 500 since June and while the former was performing all along but lately I see it has gone worst than the latter. I need to check if I’m not missing any corporate action, e.g. split, which is skewing the Halal S&P 100 results.