Wahed Dow Jones Islamic World ETF (UMMA)

Overview

The Wahed Dow Jones Islamic World ETF (WIDT) aims to provide investors with exposure to global equities that comply with Sharia investment principles. It tracks the Dow Jones Islamic Market World Index, focusing on companies screened for Islamic compliance. The ETF invests in a diversified portfolio of Sharia-compliant stocks across various sectors and geographies.

Reputation and Reliability

Wahed Invest is a company focused on providing Sharia-compliant financial products, aiming to make ethical investing accessible. Their reputation is built around adherence to Islamic finance principles.

Management Expertise

Wahed Invest's management team is committed to developing and offering financial solutions that align with Islamic values. Specific details on the ETF's day-to-day management expertise are typically managed by their appointed sub-advisors or the index provider.

Goal

To provide investors with an investment that is compliant with Islamic Sharia law while offering broad exposure to global equity markets.

Investment Approach and Strategy

Strategy: The ETF seeks to track the performance of the Dow Jones Islamic Market World Index. This involves investing in securities that meet the index's screening criteria for Sharia compliance.

Composition The ETF primarily holds equities. These equities are selected based on specific screening criteria that exclude companies involved in prohibited industries (e.g., alcohol, pork, gambling, conventional finance) and ensure financial ratios meet certain thresholds.

Market Share: Information on specific market share for niche ETFs like WIDT is often not as readily available or significant as for broad-market ETFs. Its market share would be within the Islamic finance ETF segment.

Total Net Assets (AUM): 73000000

Key Competitors

• iShares MSCI Global Sharia UCITS ETF (IUSQ)
• SPDR Dow Jones Global Islamic ETF (GDF)

Competitive Landscape

The competitive landscape for Islamic finance ETFs is growing but remains a niche segment. Competitors offer similar Sharia-compliant global equity exposure. WIDT's advantage lies in its specific tracking of the Dow Jones Islamic Market World Index, which is a well-established benchmark. A potential disadvantage could be its smaller AUM compared to some larger global ETFs, which might affect liquidity or trading costs.

Historical Performance: Performance data for WIDT can be accessed via financial data providers. It aims to mirror the performance of its underlying index, subject to tracking differences and fees. Recent performance should be reviewed for 1-year, 3-year, and 5-year periods.

Benchmark Comparison: WIDT's performance is benchmarked against the Dow Jones Islamic Market World Index. Investors should compare the ETF's returns against this index to assess its tracking efficiency.

Expense Ratio: 0.5

Average Trading Volume

The ETF's average trading volume is typically moderate, indicating reasonable liquidity for institutional and retail investors.

Bid-Ask Spread

The bid-ask spread for WIDT is generally tight enough for most investors, reflecting adequate trading activity in the ETF.

Market Environment Factors

The ETF is influenced by global equity market performance, investor demand for Sharia-compliant investments, and the performance of specific sectors represented in the Dow Jones Islamic Market World Index. Geopolitical events and economic growth in developed and emerging markets also play a role.

Growth Trajectory

The growth of WIDT is tied to the increasing interest in ethical and Islamic finance. Expansion of its investor base and potential rebalancing of its underlying index holdings can influence its trajectory.

Competitive Edge

WIDT's primary competitive edge is its explicit focus on Sharia-compliant investing, catering to a specific and growing investor segment. By tracking the Dow Jones Islamic Market World Index, it offers a globally diversified portfolio that adheres to strict ethical screening, differentiating it from conventional ETFs. Its existence provides a convenient and accessible vehicle for investors seeking to align their financial goals with their religious and ethical values.

Volatility

The ETF's volatility is expected to be similar to that of the global equity markets it tracks, reflecting the inherent risks of stock investments. Specific volatility metrics can be found in its fact sheet.

Market Risk

Market risk for WIDT includes the general risk of stock market downturns, interest rate fluctuations, currency exchange rate movements, and country-specific political and economic risks in the regions where its underlying companies are located.

Ideal Investor Profile

The ideal investor for the Wahed Dow Jones Islamic World ETF is an individual or institution seeking broad global equity exposure while adhering to Islamic Sharia investment principles. This includes investors who prioritize ethical or religious compliance in their investment decisions.

Market Risk

This ETF is best suited for long-term investors who are looking for diversified exposure to global markets and are committed to Islamic finance principles. It is less suited for short-term traders seeking high-frequency gains.

The Wahed Dow Jones Islamic World ETF (WIDT) offers a Sharia-compliant pathway to global equity markets, tracking the Dow Jones Islamic Market World Index. It provides diversification across geographies and sectors, adhering to strict ethical screening criteria. While operating in a niche market, it caters to a growing demand for ethical investments. Investors should consider its moderate liquidity and expense ratio in conjunction with its specific investment mandate.

Data Sources:

• ETF Issuer Website (Wahed Invest)
• Financial Data Providers (e.g., Bloomberg, Morningstar)
• Index Provider Information (S&P Dow Jones Indices)

Disclaimers:

This information is for educational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions. Data accuracy is subject to the availability and updates from the sources.