Wed, Nov 25, 2020
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

SP Funds launches suite of Sharia compliant ETFs

Tuesday, December 31, 2019
Opalesque Industry Update - SP Funds, a boutique asset management firm specializing in socially responsible and halal investing, has launched the first family of Sharia-compliant equity and fixed income ETFs.

Initially made up two funds, SP Funds' ETF family is designed to provide investors of all types with exposures that can help diversify both equity and fixed income portfolios and help investors avoid the types of over-levered companies that may be particularly susceptible to volatile performance during a market downturn.

The SP Funds S&P 500 Sharia Industry Exclusions ETF (ticker: SPUS), which launched on the New York Stock Exchange on December 18th, tracks the S&P 500 Sharia Industry Exclusions Index, which is designed to provide value-conscious exposure to those S&P 500 companies that meet the guidelines of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The ETF and its underlying index use an exclusion methodology to arrive at the underlying portfolio. All of the following are removed from consideration:

Alcohol

Gambling

Defense/Weapons

Tobacco

Adult Entertainment

Pork Products

Credit Cards

Music, Cinema and Broadcasting

Interest-Based Businesses

Highly Leveraged Businesses

"We designed our initial equity ETF not only for investors who might be looking for halal exposure, but for any investor who looks at their portfolio through a value-focused lens as well as those who seek to avoid over-levered enterprises, which can encounter serious turbulence in choppy markets," said Naushad Virji, CEO of SP Funds.

SP Funds has also launched a first-of-its-kind income-focused ETF, the SP Funds Dow Jones Global Sukuk ETF (ticker: SPSK). This fund is the first to provide targeted exposure to sukuks, which are financial certificates, similar to bonds, issued in the global markets and structured to comply with Islamic religious law and investment principles. Unlike conventional bonds, sukuks are based on a variety of contracts to create financial obligations and the returns to investors are considered to be profit sharing, not interest. At the end of 2018, global sukuk issuance stood at $123.2 billion up 5.5% from the previous year.

SPSK seeks to track the performance, before fees and expenses, of the Dow Jones Sukuk Total Return (ex-Reinvestment) Index. The index is currently comprised of 85 constituents, all of which are investment grade and denominated in U.S. Dollars, representing investments in seven foreign countries, and had an average weighted maturity of 5.92 years. To be eligible for inclusion, sukuks must have an outstanding issue size of at least U.S. $200 million, a minimum time to maturity of one year, and a credit quality rating of at least BBB-/Baa# by S&P, Moody's or Fitch Ratings.

"The global sukuk marketplace is very robust but to this point there had not been an ETF solution for investors looking to add this type of exposure to their income-focused portfolios. We're very pleased to be first to market with this approach," added Virji. "Not only is this a diversifier in terms of the underlying holdings in SPSK, but the fund is also designed to provide investors with decreased exposure to duration risk and interest rate risk, important considerations as investors are finding it ever more difficult to access yield from the traditional sources."

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing: Where EcoR1 stands to profit from healthy deal making, Top 10 stocks billionaire George Soros just bought, Bill Ackman likely lost more money on Warren Buffett's Berkshire Hathaway than 'anyone in the world', JPMorgan's quant chief shares 5 trade recommendations following Pfizer's vaccine 'game-changer'[more]

    Where EcoR1 stands to profit from healthy deal making From Institutional Investor: These are busy times for the folks at Oleg Nodelman's EcoR1 Capital, an investment firm focused on therapeutic companies in the biotechnology sector. Silverback Therapeutics, a clinical-stage biopharmaceu

  2. SPACs: Seth Klarman bets big on Bill Ackman, other SPACs, CRE firms join the SPAC boom[more]

    Seth Klarman bets big on Bill Ackman, other SPACs From MSN: Hedge fund manager Seth Klarman revealed several investments in SPACs during the third quarter, including a big bet on the largest SPAC from Bill Ackman. A 13F filing from the third quarter reveals Klarman's Baupost Fund to

  3. Renaissance, Two Sigma see losses as quant giants navigate chaos, Hedge fund run by BofA veterans trounces 99% of Brazil peers, Amid a tough year, CQS makes changes - and sees a rebound[more]

    Renaissance, Two Sigma see losses as quant giants navigate chaos From Bloomberg: Two of the hedge fund industry's quantitative powerhouses are getting tripped up this year as wild markets throw off their investing models. Renaissance Technologies, which manages the world's biggest q

  4. Investing: Hedge funds bet on tech ahead of unpredictable fourth quarter, The Tiger crowd's fresh buys, raises Uber stake, David Einhorn adds Twitter and Intel shares, keeps big bets on inflation, Palantir stock rockets to record highs as hedge funds disclose stakes, Trian dumped GE stock, but Druckenmiller stood pat in Q3 as SEC probe heated up[more]

    Hedge funds bet on tech ahead of unpredictable fourth quarter From Bloomberg: Hedge funds mostly stuck with the safety of technology stocks during the third quarter as they headed toward the uncertainty of this month's U.S. election. If they're still holding on to those wagers, it will

  5. SPACs: As Ackman hunts blockbuster deal, he counts on big backers[more]

    From Reuters: Hedge fund veteran William Ackman has the support of some of Wall Street's top investors as he tries to pull off the biggest-ever deal carried out by a blank-check acquisition company, according to regulatory filings published in the last few days. Among the heavy hitters rounded u