AAOIFI Shari'a screening · Reviewed July 20, 2026
Is VOO halal in 2026?
No. The Vanguard S&P 500 ETF (VOO) fails Shariah screening: about 22.6% of the basket by weight is non-compliant against a 5% tolerance. The real holdings data and the halal alternatives that track similar exposure.
No. The Vanguard S&P 500 ETF (VOO) is not halal. Under the AAOIFI approach a fund is compliant only when non-compliant holdings stay under 5% of the basket by weight, and VOO fails that test decisively: as of the July 2026 screening, roughly 22.6% of the basket is non-compliant, including conventional banks, insurers, and other prohibited businesses baked into the S&P 500. Shariah-screened alternatives such as SPUS and HLAL offer similar US large-cap exposure and pass.
AAOIFI ratio breakdown
| Ratio | Value | Threshold | Verdict |
|---|---|---|---|
| Non-compliant holdings / basket weight | ~22.6% | <5% | Fail |
| Individually halal holdings / basket weight | ~73% | Pass |
VOO replicates the S&P 500, so it owns whatever the index owns. That includes the large conventional financials (JPMorgan, Bank of America, Wells Fargo, Berkshire Hathaway with its insurance core), plus alcohol, gambling, and other prohibited names. In HalalScreener's July 2026 holdings screening, about 73% of VOO's basket by weight was individually halal, 3% doubtful, and roughly 23% non-compliant, with about 1% unscreened.
The 5% basket tolerance is the deciding test. Scholars tolerate a small incidental share of non-compliant holdings inside a diversified fund, provided that share stays under 5% by weight and its income is purified. At roughly 22.6% non-compliant weight, VOO is more than four times over the line. No reasonable methodology gets it to pass; this is not a borderline call like some individual stocks.
Owning VOO is different from owning its halal components. Buying the fund means owning a slice of every constituent, including the banks, which is direct ownership of prohibited business. If you want the strategy (cheap, passive US large-cap exposure), the screened equivalents deliver it: SPUS tracks the S&P 500 with prohibited industries removed, HLAL tracks a FTSE Shariah-screened US index, and Amana's funds offer an actively managed route. Our answer on halal alternatives to the S&P 500 compares them in detail, and HalalScreener screens any US-listed ETF's basket free.
Methodology
Verdict applies the methodology of AAOIFI Shari'a Standard No. 21: Financial Papers (Shares and Bonds): qualitative screening for prohibited business activities, plus three quantitative caps. Interest-bearing debt < 30% of market cap, interest-bearing securities < 30%, and non-permissible income < 5% of revenue.
Sources and scholars
- AAOIFI Shari'a Standard No. 21: Financial Papers (Shares and Bonds)
- Contemporary Shariah boards on the 5% basket tolerance for funds
- SP Funds Shari'a Board (SPUS) and Wahed Invest Shari'a Supervisory Board (HLAL) for the screened alternatives
Frequently asked
Is VOO halal in 2026?
No. About 22.6% of VOO's basket by weight is non-compliant as of July 2026, against the 5% tolerance scholars allow for funds. The S&P 500 it tracks includes conventional banks, insurers, and other prohibited businesses, so every S&P 500 fund fails the same way.
What is the halal version of VOO?
SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) is the closest like-for-like: the same parent index with prohibited industries removed. HLAL (Wahed FTSE USA Shariah ETF) offers similar US large-cap exposure on a different screened index. Both publish Shariah audits.
Most of VOO is halal companies, so why is the fund haram?
Because buying the fund buys everything in it. Roughly 73% of the basket is individually halal, but the roughly 23% that is not (banks, insurers, and similar) is direct ownership of prohibited business, far beyond the 5% incidental tolerance. Own the halal companies directly or through a screened fund instead.
Is SPY halal then?
No. SPY, IVV, and VOO all replicate the same S&P 500 index, so they fail identically. The verdict follows the index, not the fund provider.