Wahed FTSE USA Shariah ETF (HLAL)

Overview

The Wahed FTSE USA Shariah ETF (ISDX) aims to provide investors with exposure to US large-cap equities that comply with Shariah investment principles. It follows the FTSE USA Shariah Titheable Index and focuses on companies that meet specific ethical screening criteria, excluding those involved in prohibited industries like alcohol, gambling, conventional finance, pork, and tobacco. The strategy is to offer diversified Shariah-compliant exposure to the US stock market.

Reputation and Reliability

Wahed Invest is a financial technology company focused on providing Shariah-compliant investment solutions. While a newer entrant compared to traditional asset managers, Wahed has established itself in the niche of Islamic finance, aiming to offer accessible and ethical investment options.

Management Expertise

Information regarding the specific management team's expertise for the Wahed FTSE USA Shariah ETF is not readily detailed in public financial reports. However, Wahed Invest as a whole aims to leverage expertise in both financial markets and Shariah compliance to construct its investment products.

Goal

The primary investment goal of the Wahed FTSE USA Shariah ETF is to track the performance of the FTSE USA Shariah Titheable Index, providing investors with capital appreciation that is compliant with Islamic finance principles.

Investment Approach and Strategy

Strategy: The ETF aims to replicate the performance of the FTSE USA Shariah Titheable Index. This involves investing in a portfolio of US-listed large-capitalization stocks that have passed rigorous Shariah compliance screenings.

Composition The ETF holds a diversified portfolio of US equities that are screened for Shariah compliance. This means it includes stocks of companies operating in sectors deemed permissible under Islamic law, while excluding those involved in industries considered haram (forbidden).

Market Share: Market share data for the Wahed FTSE USA Shariah ETF is not consistently available or widely reported as it operates in a specific niche within the broader US ETF market.

Total Net Assets (AUM): As of recent data, the Total Net Assets (AUM) for the Wahed FTSE USA Shariah ETF are approximately $50 million. (Note: AUM figures can fluctuate significantly and should be verified with real-time financial data providers.)

Key Competitors

• iShares MSCI USA Islamic ETF (MUSI)
• SPDR S&P Islamic ETF (SPIS)

Competitive Landscape

The landscape for Shariah-compliant US equity ETFs is relatively niche. Wahed FTSE USA Shariah ETF competes with other ETFs that also aim to provide Shariah-compliant exposure to US equities. Its advantage lies in its specific adherence to the FTSE USA Shariah Titheable Index, which may offer a different screening methodology than competitors. A potential disadvantage could be its relatively smaller AUM compared to some established competitors, which might impact liquidity.

Historical Performance: Historical performance data for the Wahed FTSE USA Shariah ETF is variable. For instance, over the past year, it has shown returns of approximately X%, and over three years, Y%. (Note: Specific numerical performance data requires real-time access and will vary. Placeholder values are used.)

Benchmark Comparison: The ETF's performance is benchmarked against the FTSE USA Shariah Titheable Index. Over various periods, its tracking difference will indicate how closely it has followed its benchmark, with minor deviations expected due to fees and operational expenses.

Expense Ratio: 0.55

Average Trading Volume

The ETF's average trading volume is generally moderate, indicating that it is reasonably liquid for most retail investors but may experience wider bid-ask spreads during periods of low trading activity.

Bid-Ask Spread

The bid-ask spread for the Wahed FTSE USA Shariah ETF can vary, but it typically reflects its trading volume and market conditions, with slightly wider spreads than highly liquid, broad-market ETFs.

Market Environment Factors

The ETF is influenced by the overall performance of the US equity market, investor sentiment towards Shariah-compliant investments, and any regulatory changes affecting ethical investing. Growth in the technology and healthcare sectors, provided companies therein meet Shariah criteria, can positively impact its performance.

Growth Trajectory

The growth trajectory of the Wahed FTSE USA Shariah ETF is tied to the increasing demand for ethical and Shariah-compliant investment products. As awareness and accessibility of such options grow, the ETF is positioned to benefit from this trend, potentially attracting new assets and maintaining or increasing its holdings in compliant companies.

Competitive Edge

The Wahed FTSE USA Shariah ETF's primary competitive edge lies in its specialized focus on Shariah-compliant investing in the US equity market. It caters to a specific investor demographic seeking ethical financial solutions. Its adherence to the FTSE USA Shariah Titheable Index provides a transparent and defined investment universe. The ETF offers diversification within this niche, allowing investors to access a broad range of US companies while respecting their ethical principles.

Volatility

The volatility of the Wahed FTSE USA Shariah ETF is generally in line with that of the broader US large-cap equity market, as it tracks a broad index. However, specific sector concentrations or the exclusion of certain high-growth but non-compliant industries could introduce unique volatility patterns.

Market Risk

Market risk for this ETF stems from the inherent volatility of the US stock market. Economic downturns, interest rate changes, geopolitical events, and industry-specific challenges can all impact the value of the underlying equities. Additionally, there's a risk associated with the specific Shariah screening process, as certain sectors or companies might be excluded, potentially limiting diversification or missing out on high-performing areas not deemed compliant.

Ideal Investor Profile

The ideal investor for the Wahed FTSE USA Shariah ETF is an individual or institution seeking exposure to the US stock market while adhering to Islamic financial principles. This includes investors who prioritize ethical investing, are looking for long-term growth, and understand the nuances of Shariah compliance in their investments.

Market Risk

This ETF is best suited for long-term investors who are committed to passive index tracking within a Shariah-compliant framework. It is not designed for active traders seeking short-term gains due to its indexing strategy and typical expense ratios.

The Wahed FTSE USA Shariah ETF (ISDX) offers a Shariah-compliant approach to investing in the US equity market, tracking the FTSE USA Shariah Titheable Index. It caters to a specific investor base prioritizing ethical and Islamic financial principles. While facing competition from other Shariah-focused ETFs, its strength lies in its transparent index methodology and specialized niche. Investors should consider its moderate AUM and associated liquidity when making investment decisions, alongside the inherent risks of equity investing and the specific limitations imposed by Shariah screening.

Data Sources:

• Financial data providers (e.g., Morningstar, ETF.com, fund prospectus)
• Wahed Invest official website
• FTSE Russell Index Methodology

Disclaimers:

This information is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions. AUM and performance data are subject to change and should be verified with real-time data sources.