SP Funds has added a new fund to its lineup of Sharia-compliant ETFs. The SP Funds S&P World ex-US ETF seeks to track the performance, before fees and expenses, of the S&P DM Ex-U.S. & EM 50/50 Shariah Index.
The index is designed to measure the performance of Sharia-compliant components of emerging market and developed market stocks. The index excludes U.S. stocks.
As of December 20, the Index comprises 500 constituents, representing investments in 42 foreign countries. The index had a mean market cap of $14 billion.
SP Funds expect the fund’s constituent companies to benefit from growth in emerging market and Europe, Australia, and Far East (EAFE) economies. This expectation stems from inflation tending to be lower and the growth rate being higher in these regions.
SPWO is composed in accordance with Islamic law as agreed upon through Accounting and Auditing Organization for Islamic Financial Institutions principles. It excludes non-Islamic businesses and screens out the companies with higher leverage and noncompliant income.
The fund charges 45 basis points.
A Growing Suite of Sharia-Compliant ETFs
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 launch of SPWO comes hot off the heels of SP Funds listing the SP Funds S&P Global Technology ETF (SPTE ). 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.
SPWO joins SP Funds’ lineup of Sharia-compliant ETFs that includes SPTE, 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 ).
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