SP Funds has expanded its suite of Sharia-compliant ETFs with the SP Funds S&P Global Technology ETF (SPTE ). The new fund trades on the New York Stock Exchange.
SPTE seeks to provide access to global technology companies through large- and midcap stocks. It invests in rapidly evolving areas of the economy such as artificial intelligence, e-commerce, cloud computing, and healthcare.
See more: Wahed Launches Nasdaq’s First Shariah-Compliant ESG ETF, UMMA
SPTE seeks to track the performance, before fees and expenses, of the S&P Global 1200 Shariah Information Technology (Sector) Capped index. The Index is designed to measure members of the S&P Global 1200 Shariah that are classified within the GICS Information Technology sector. It incorporates a constituent and country cap.
As of October 31, the index comprised 99 constituents from 15 foreign countries.
In a news release, SP Funds CEO Naushad Virji emphasized the importance of “investors to hedge against leverage.” He argued that SPTE can offer “financial stability, reduced risk exposure, and the potential for higher returns exposure to companies amidst significant debt obligations.”
The Benefits of Sharia-Compliant Investing
SP Funds describes itself as “North America’s largest family of Sharia-compliant ETFs.” According to the issuer, Sharia-compliant ETFs offer benefits such as diversification, competitive costs, transparency, and trading flexibility. They can also potentially avoid risky allocations to highly leveraged instruments.
The ETF is composed in accordance with Islamic law as agreed upon through AAOIFI principles. It excludes non-Islamic businesses and screens out the companies with higher leverage and noncompliant income.
SPTE joins SP Funds’ lineup of Sharia-compliant ETFs that includes the SP Funds S&P 500 Sharia Industry Exclusions ETF (SPUS ), the SP Funds Dow Jones Global Sukuk ETF (SPSK ), and the SP Funds S&P Global REIT Sharia ETF (SPRE ). SPTE charges 55 basis points.
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