Wahed Dow Jones Islamic World ETF (UMMA)

Overview

The Wahed Dow Jones Islamic World ETF (UMMA) seeks to track the performance, before fees and expenses, of the Dow Jones Islamic Market World Index, which is designed to measure the investment return of Shariah-compliant companies.

Reputation and Reliability

Wahed Invest LLC is a robo-advisor known for offering Shariah-compliant investment solutions. While relatively new compared to established ETF providers, they are recognized within the Islamic finance sector.

Management Expertise

Wahed Invest has a team with expertise in both finance and Islamic law, ensuring compliance with Shariah principles in their investment offerings.

Goal

The ETF aims to provide investment results that, before fees and expenses, correspond generally to the performance of the Dow Jones Islamic Market World Index.

Investment Approach and Strategy

Strategy: The ETF employs a passive management strategy, seeking to replicate the performance of the Dow Jones Islamic Market World Index.

Composition The ETF primarily holds stocks of companies that adhere to Islamic principles, excluding those involved in activities such as gambling, alcohol, tobacco, and interest-based finance.

Market Share: UMMA's market share within the Islamic ETF sector is moderate but growing, competing with more established players and other specialized ETFs.

Total Net Assets (AUM): 104800000

Key Competitors

• HLAL
• SPUS
• ISDU

Competitive Landscape

The Islamic ETF market is still developing. UMMA offers a focused approach on Shariah-compliant global equities, while competitors like HLAL and SPUS may have different index tracking or broader market exposure. UMMA's competitive advantage lies in its robo-advisor parentage and global reach, but it faces challenges in terms of scale and brand recognition compared to larger ETF providers.

Historical Performance: The ETF's historical performance mirrors the Dow Jones Islamic Market World Index, with returns fluctuating based on global market conditions.

Benchmark Comparison: The ETF is designed to closely track the Dow Jones Islamic Market World Index, so deviations in performance would primarily be due to tracking error and fund expenses.

Expense Ratio: 0.49

Average Trading Volume

UMMA exhibits a moderate average trading volume, implying reasonable liquidity for investors, but large trades may impact prices slightly more than highly liquid ETFs.

Bid-Ask Spread

The bid-ask spread for UMMA varies but is generally competitive, representing a manageable transaction cost for most investors.

Market Environment Factors

Economic growth, interest rate changes, and global trade policies can affect the underlying companies held by UMMA; Shariah compliance also filters the investment universe.

Growth Trajectory

UMMA's growth is tied to the increasing demand for Shariah-compliant investment options; strategic partnerships and broader market acceptance will influence its expansion.

Competitive Edge

UMMA's primary competitive edge is its dedicated focus on Shariah-compliant global equities, catering to a specific and growing investor base. The robo-advisor parentage of Wahed Invest offers a tech-forward approach and potential for integration with other financial services. UMMA's index provides access to a diversified portfolio that adheres to Islamic investment principles, making it an attractive option for investors seeking ethical and faith-based investments. This differentiation helps UMMA stand out in a crowded ETF market.

Volatility

UMMA's volatility is similar to that of global equity markets, indicating exposure to market fluctuations.

Market Risk

The ETF is susceptible to market risk associated with global equities, including economic downturns, geopolitical events, and sector-specific challenges affecting the companies in the Dow Jones Islamic Market World Index.

Ideal Investor Profile

The ideal investor for UMMA is one who seeks Shariah-compliant investment options, desires exposure to global equities, and is comfortable with moderate market risk.

Market Risk

UMMA is suitable for long-term investors looking for diversified exposure to global Islamic equities, as well as potentially for passive index followers interested in ethical investing.

Wahed Dow Jones Islamic World ETF (UMMA) offers a Shariah-compliant approach to investing in global equities, tracking the Dow Jones Islamic Market World Index. Its passive management strategy and adherence to Islamic principles make it appealing to investors seeking ethical and faith-based investments. While UMMA's market share is still relatively small, it benefits from its association with Wahed Invest and the growing demand for Shariah-compliant investment options. The ETF's performance closely mirrors its benchmark, and its risk profile is similar to that of global equity markets.

Data Sources:

• Wahed Invest LLC
• Dow Jones
• ETF.com
• Yahoo Finance

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor. Market data is subject to change.