Wahed Dow Jones Islamic World ETF (UMMA)

Overview

The Wahed Dow Jones Islamic World ETF (UMMA) seeks to track the performance of the Dow Jones Islamic Market World Index, providing exposure to Shariah-compliant stocks worldwide. It aims to offer investors a diversified portfolio of companies that adhere to Islamic principles, screening out businesses involved in activities such as alcohol, tobacco, gambling, and interest-based finance.

Reputation and Reliability

Wahed Invest LLC is a fintech company focusing on halal investing. While relatively new to the ETF market, it leverages its expertise in Islamic finance to offer specialized investment products.

Management Expertise

The management team combines expertise in both finance and Islamic law, ensuring adherence to Shariah principles in investment selection.

Goal

To provide investment results that closely correspond, before fees and expenses, to the performance of the Dow Jones Islamic Market World Index.

Investment Approach and Strategy

Strategy: Tracks a specific index: the Dow Jones Islamic Market World Index.

Composition Primarily holds stocks that meet Shariah compliance standards. The portfolio is diversified across various sectors and regions within the Islamic investment universe.

Market Share: UMMA's market share in the Islamic ETF sector is growing but remains relatively small compared to broader market ETFs.

Total Net Assets (AUM): 54075000

Key Competitors

• iShares MSCI KLD 400 Social ETF (DSI)
• SPDR S&P 500 Fossil Fuel Free ETF (SPYX)
• iShares ESG Aware MSCI USA ETF (ESGU)

Competitive Landscape

The Islamic ETF market is niche but growing. UMMA differentiates itself through its strict adherence to Shariah principles. Competitors offer broader ESG or socially responsible investing themes, potentially appealing to a wider investor base. UMMA's disadvantage is its smaller AUM and relatively higher expense ratio compared to some competitors.

Historical Performance: Historical performance data should be sourced from financial websites, the ETF's provider, or reliable data aggregators. Data includes total return for 1 year, 3 year, and 5 year periods, and since inception.

Benchmark Comparison: The ETF's performance is compared to the Dow Jones Islamic Market World Index. Differences may arise due to tracking error and expenses.

Expense Ratio: 0.5

Average Trading Volume

The ETF's average daily trading volume is relatively low, indicating moderate liquidity.

Bid-Ask Spread

The bid-ask spread can be moderate, depending on market conditions and trading activity, reflecting the ETF's liquidity.

Market Environment Factors

Economic indicators, global market trends, and investor sentiment towards ethical investing influence the ETF's performance. Specific factors affecting Shariah-compliant investments also play a role.

Growth Trajectory

Growth is tied to increasing interest in Islamic finance and ethical investing. Changes in strategy or holdings would be reported in fund prospectuses and filings.

Competitive Edge

UMMA's competitive advantage lies in its strict adherence to Shariah principles, catering specifically to investors seeking halal investment options. This focus differentiates it from broader ESG ETFs. The Wahed Invest brand also provides a recognized presence in the Islamic finance space. However, this niche focus also limits its potential market size.

Volatility

The ETF's volatility is reflective of the underlying equities in the Dow Jones Islamic Market World Index. Emerging market exposure can contribute to higher volatility.

Market Risk

Market risk is inherent in equity investments. Specific risks relate to the performance of companies adhering to Shariah principles and potential geopolitical events in regions where these companies operate.

Ideal Investor Profile

Ideal investors are those seeking Shariah-compliant investments, aligning their portfolios with Islamic ethical guidelines. Investors interested in global equity exposure with an ethical screen are also suitable.

Market Risk

UMMA is suitable for long-term investors seeking diversified exposure to Shariah-compliant equities and aligning their investments with Islamic principles.

Wahed Dow Jones Islamic World ETF (UMMA) provides exposure to a diversified portfolio of Shariah-compliant global equities. It is designed for investors seeking to align their investments with Islamic principles. While offering a unique niche, its smaller AUM and moderate liquidity should be considered. The ETF tracks the Dow Jones Islamic Market World Index, providing a benchmark for its performance.

Data Sources:

• Wahed Invest LLC
• Dow Jones Indexes
• Financial News Providers (e.g., Bloomberg, Yahoo Finance)

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on your own research and consultation with a qualified financial advisor. Market share data is based on available data and may not be exact.