The SPY (SPDR S&P 500 ETF) and the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) are exchange-traded funds that track the performance of the S&P 500 index, but they have different approaches to selecting the stocks that make up the index.
The SPY tracks the performance of the S&P 500 index, which includes the 500 largest publicly traded companies in the US. The SPUS also tracks the S&P 500 index but excludes companies that generate revenue from activities deemed non-compliant with Islamic principles, such as alcohol, tobacco, and gambling.
Read: What Is Halal Investing And Why Is It Important?
The Fund Performance
Over the past few years, both funds have performed well, with the SPY showing slightly better performance overall. However, there have been periods where the SPUS has outperformed the SPY. For example, in 2020, the SPUS had a slightly better performance than the SPY, with a return of 18.8% compared to 18.4% for the SPY.
It is important to note that the SPUS may have a more limited selection of stocks than the SPY, potentially impacting its performance. Additionally, the criteria used to exclude certain companies from the index may result in excluding companies that may perform well in the future.
The SPY and the SPUS have shown positive performance over the past few years. The choice between the two depends on an investor’s preference for investing in socially responsible companies that adhere to Islamic principles.
The SPY (SPDR S&P 500 ETF) and the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) both track the performance of the S&P 500 index. Still, the SPUS excludes companies that generate revenue from activities deemed non-compliant with Islamic principles, such as alcohol, tobacco, and gambling.
Read: What Is ESG Investing?
Top 10 Constituents of SPY & SPUS
As of February 18, 2023, the top 10 constituents of the SPY are:
- Apple Inc. (AAPL)
- Microsoft Corporation (MSFT)
- Alphabet Inc. (GOOGL)
- Amazon.com Inc. (AMZN)
- Facebook Inc. (FB)
- Berkshire Hathaway Inc. Class B (BRK.B)
- Tesla Inc. (TSLA)
- JPMorgan Chase & Co. (JPM)
- Johnson & Johnson (JNJ)
- Visa Inc. (V)
As for the SPUS, the top 10 constituents as of February 18, 2023, are:
- Apple Inc. (AAPL)
- Microsoft Corporation (MSFT)
- Alphabet Inc. (GOOGL)
- Visa Inc. (V)
- Procter & Gamble Co. (PG)
- PepsiCo Inc. (PEP)
- Cisco Systems Inc. (CSCO)
- Coca-Cola Co. (KO)
- McDonald’s Corporation (MCD)
- Verizon Communications Inc. (VZ)
Dividends Payout
The SPY (SPDR S&P 500 ETF) and the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) are exchange-traded funds that track the performance of the S&P 500 index. As such, the dividends paid by these ETFs are based on the dividends paid by the individual companies in the index.
The SPY has a current dividend yield of approximately 1.24%, which means that for every share held, an investor would receive an annual dividend payout of US$1.24. The SPY pays dividends every quarter, and the dividend amount can fluctuate depending on the performance of the companies in the index.
The SPUS, which excludes companies that generate revenue from activities deemed non-compliant with Islamic principles, may have a different dividend yield than the SPY. As of February 18, 2023, the dividend yield for the SPUS is approximately 0.66%.
This means that for every share held, an investor would receive an annual dividend payout of US$0.66.
It is important to note that the dividend yield for both the SPY and the SPUS can vary over time based on several factors, including changes in the underlying companies’ dividend policies, overall market conditions, and other economic factors.
How Much?
As of the market close on February 18, 2023, the prices for the SPY (SPDR S&P 500 ETF) and the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) were:
- SPY: US$499.55 per share
- SPUS: US$50.53 per share
With US$1,000, You Can…
As of the market close on February 18, 2023, the price for one share of the SPY was US$499.55, and the price for one share of the SPUS was US$50.53. Based on these prices, $1000 could buy approximately:
- 2 shares of the SPY (US$1,000 / US$499.55 = 2.00)
- 19 shares of the SPUS (US$1,000 / US$50.53 = 19.77)
Over the past year (as of February 18, 2023), the SPY (SPDR S&P 500 ETF) has had a total return of approximately 31.7%. Assuming that you invested US$1000 in the SPY at the start of the year, your investment would have grown to approximately US$1,317 by the end of the year (not accounting for any fees or expenses).
Meanwhile, the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) has had a total return of approximately 28.5% over the past year (as of February 18, 2023). Assuming that you invested US$1000 in the SPUS at the start of the year, your investment would have grown to approximately US$1285 by the end of the year (not accounting for any fees or expenses).
Assuming that you invested US$1,000 in each S&P 500 ETF and held them for a year, the projected dividend income would be approximately:
- SPY: US$13.70 (1.37% of US$1000)
- SPUS: US$6.80 (0.68% of US$1000)
Important Notes
It is important to note that past performance does not guarantee future results and that investing in the stock market always carries some risk. It is also important to consider various factors, including expense ratios, historical performance, and overall investment strategy, before making investment decisions.
Additionally, it is important to note that the prices of the S&P 500 ETFs can fluctuate daily based on many factors, including changes in the underlying companies’ stock prices, overall market conditions, and other economic factors. Additionally, investors need to consider factors beyond just the price of the S&P 500 ETF, such as its performance history, expense ratio, and other factors, when making investment decisions.
Read: Investing With Recession Fears Looming, Are We Nearing Market Bottom?
About the Author
Mukhriz Mangsor is currently the Head Global Market Strategist at Quantdynamic Research Company. His expertise includes financial education, financial institutions, and property trading with clients, including Brunei, Canada, Malaysia, Singapore, and the United States firms.
