SPUS vs SPY: Sharia Screening Versus Broad Market Exposure

Key Takeaways

• SPUS tracks a Sharia-compliant subset of the S&P 500, holding roughly 215–220 stocks, while SPY fully replicates the broad S&P 500 Index with about 500 holdings.
• SPUS carries a materially higher expense ratio (0.45%) than SPY (about 0.09%), making SPY the structurally cheaper core holding.
• SPUS excludes financials, defense, and interest-based businesses, leaving a heavy technology tilt of roughly 58–60%, versus about 41% for SPY.
• SPUS is far more concentrated, with top-10 positions around 57% of assets, compared with about 38% for SPY.
• SPY is a unit investment trust (UIT) with decades of trading history and exceptional liquidity; SPUS is a younger, non-diversified fund launched in December 2019.
• The two funds overlap in mega-cap technology but serve different goals: broad market exposure (SPY) versus faith-aligned, growth-leaning exposure (SPUS).

Why Compare SPUS and SPY

Investors increasingly weigh both broad market efficiency and values-based screening when building portfolios, which is why an ETF comparison between SPUS and SPY is timely. The two funds do not compete directly: SPY is a benchmark-replicating core of the U.S. large-cap market, while SPUS applies Sharia-compliant filters that remove entire industries and re-weight the remainder. Yet both draw from the same S&P 500 universe, so their relative positioning reveals how screening, sector concentration, and cost shape fund performance. Understanding their structural differences helps investors decide whether to hold the full index, a faith-aligned alternative, or a combination of both. I also checked this using Tickeron’s AI Screener to see how the two line up on momentum and sector metrics.

A Closer Look at SPUS

SPUS seeks to track the S&P 500 Shariah Industry Exclusions Index. The index begins with S&P 500 constituents, removes businesses deemed non-compliant with Islamic principles, and additionally excludes three sub-industries: Aerospace & Defense, Financial Exchanges & Data, and Data Processing & Outsourced Services. The result is a market-cap-weighted, non-diversified portfolio of roughly 215–220 holdings. Because interest-based financials are screened out, the fund has effectively no financial sector exposure and a pronounced tilt toward technology, which represents about 58–60% of assets. The fund charges a 0.45% expense ratio and is structured as a passive ETF, rebalancing to match its index.

Its largest positions include NVDA (around 13–14%), AAPL (about 12–13%), MSFT (about 9–10%), GOOGL, AVGO, MU, TSLA, LLY, AMD, and XOM. Healthcare is the second-largest sector at around 11%, with smaller allocations to communication services, industrials, and consumer cyclical names.

SPY’s Established Profile

SPY is the oldest and most heavily traded ETF listed in the United States, launched in January 1993. It seeks to track the S&P 500 Index by holding substantially all of its component stocks, weighted to match the index, across approximately 500 holdings. Unlike a typical open-end fund, SPY is organized as a unit investment trust (UIT), a structure that requires full replication of the index and generally precludes securities lending and reinvesting dividends intra-period.

SPY's expense ratio is about 0.09%, among the lowest for widely traded index funds. Sector exposure is more balanced than SPUS: technology is the largest sector at roughly 41%, followed by financials (about 11%), communication services, healthcare, and consumer cyclicals. Top holdings include NVDA, AAPL, MSFT, AMZN, GOOGL, AVGO, GOOG, META, MU, and TSLA. With assets in the hundreds of billions of dollars, SPY offers exceptional liquidity and tight bid-ask spreads.

Shared Industry Backdrop

Both funds are heavily shaped by the same macro forces: artificial intelligence (AI) capital spending, semiconductor demand, and the earnings trajectory of mega-cap technology companies. This concentration has supported growth-oriented equity returns in recent market cycles, though it also raises sensitivity to interest rate expectations and valuation multiples. SPUS amplifies this dynamic because removing financials and defense names shifts even more weight into technology and growth stocks. Broader regulatory developments, including scrutiny of large technology platforms and debates over concentration risk, affect both portfolios. Meanwhile, SPY retains exposure to banks, insurers, and payment networks, sectors that respond to credit conditions and monetary policy in ways SPUS does not capture. For faith-driven investors, SPUS's screening process also reflects evolving demand for Sharia-compliant and values-based products, a trend that has supported steady capital inflows in recent years.

Performance and Positioning Differences

In recent weeks and months, both ETFs have moved in tandem with U.S. large-cap technology leadership, but their relative positioning diverges. SPUS's heavier tech weighting and exclusion of lower-multiple financial stocks have historically made it more volatile and more responsive to semiconductor and AI momentum, giving it a stronger growth tilt during risk-on periods. SPY's broader diversification, including financials and a wider mix of sectors, generally moderates drawdowns and provides more balanced exposure when leadership rotates away from technology. On cost, SPY holds a clear structural advantage: its 0.09% expense ratio is roughly one-fifth of SPUS's 0.45% fee, a gap that compounds over long holding periods. Liquidity also favors SPY, whose enormous trading volume supports institutional-scale transactions, whereas SPUS has more modest daily volume and wider spreads. In short, SPUS offers concentrated growth potential; SPY offers diversification, cost efficiency, and liquidity.

Exploring Tickeron’s AI Screener

I frequently use Tickeron’s AI Screener when evaluating ETFs such as SPUS and SPY. The tool lets me apply filters for technical patterns, fundamentals, volatility, and AI signals to quickly compare thousands of funds and surface relevant ideas. It provides a structured way to assess momentum and relative positioning that complements traditional analysis. Explore the AI Screener to refine your next research step.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

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Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.

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