XLF
Financial Select Sector SPDR Fund
Is XLF Halal?
Financial sector ETF — banks and insurance companies are impermissible.
What You Should Know
State Street's March 31, 2026 report shows XLF concentrated in banks, financial services, capital markets, insurance and consumer finance, with $48.282 billion of total assets. The sector's conventional interest-based activity makes the qualitative and overall screens fail even though fund-level balance-sheet ratios are low.
⚠️ Concerns
- •Banks earn interest (riba)
- •Insurance involves gharar
- •Capital markets and consumer finance exposure
- •Full financial-sector exposure
Current quantitative Sharia screen
Based on Semiannual Shareholder Report figures for the period ended 2026-03-31; calculated 2026-07-14.
0 / 48,282.129
370.131 / 48,282.129
802.745 / 48,282.129
0.283 / 455.661
- Financial
- Pass
- Overall
- Fails
Fund-level debt/assets is 0.00%, liquidity/assets is 0.77%, receivables-plus-cash/assets is 1.66% and disclosed incidental non-compliant income is 0.06%; the core financial-sector activity fails qualitatively.
- Financial
- Pass
- Overall
- Fails
Fund-level debt, liquidity and receivables-plus-cash are below examined MSCI limits, but the fund is concentrated in conventional financial institutions.
- Financial
- Pass
- Overall
- Fails
Fund-level financial ratios are below the examined Malaysia limits, but the core financial-sector activity is not permissible under the qualitative screen.
- Financial
- Not calculated
- Overall
- Fails
Market-cap methods are not used for this fund-level sector screen; core activity already fails qualitatively.
Business-activity disclosure
XLF is designed to provide direct exposure to banks, financial services, capital markets, insurance and consumer finance companies; conventional interest-based financial activity is the fund's defining sector exposure.
Limitation: The report provides fund-level holdings and income, but not a universal prohibited-revenue allocation for every underlying financial institution; the conservative upper-bound input is used for the fund-level display.
Purification
Small fund-level interest and securities-lending income does not cure the fund's core exposure to conventional banks, insurers and finance companies.
Inputs, assumptions and primary sources
- Amounts are USD millions converted from XLF's unaudited March 31, 2026 semiannual statements.
- XLF reports $48,256.702059 million of investments, including $365.957369 million of affiliated investments, $4.173723 million of net cash at broker, $798.571312 million of dividend and securities-lending receivables and $48,282.128644 million of total assets.
- Six-month investment income totals $455.661443 million, including $50,844 of interest and $231,910 of securities-lending income; the conservative prohibited-revenue input treats the fund's pass-through financial-sector income as non-compliant core exposure rather than claiming issuer-level revenue precision.
- The fund's holdings are concentrated in banks, financial services, capital markets, insurance and consumer finance; a fund-level dividend denominator is not a substitute for issuer-level revenue analysis.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
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