Wahed FTSE USA Shariah ETF (HLAL)

Overview

The Wahed FTSE USA Shariah ETF (HLAL) aims to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE USA Shariah Index. It primarily focuses on US Shariah-compliant equities, adhering to Islamic investment principles. The fund seeks to replicate the index by investing in its constituent securities in proportion to their index weights.

Reputation and Reliability

Wahed Invest is a relatively new player in the ETF market, specializing in Shariah-compliant investment products. Their reputation is growing, but their track record is shorter compared to established ETF providers.

Management Expertise

Wahed Invest's management team includes professionals with expertise in Islamic finance and investment management.

Goal

The primary investment goal is to track the performance of the FTSE USA Shariah Index, providing investors with exposure to Shariah-compliant U.S. equities.

Investment Approach and Strategy

Strategy: The ETF employs a passive investment strategy, seeking to replicate the FTSE USA Shariah Index.

Composition The ETF holds stocks that meet the index's Shariah compliance criteria, excluding companies involved in activities such as conventional finance, alcohol, tobacco, and gambling.

Market Share: HLAL's market share within the Shariah-compliant ETF market is growing but remains a smaller percentage of the overall ETF market.

Total Net Assets (AUM): 143000000

Key Competitors

• SP Funds S&P 500 Sharia Industry Exclusions ETF (SPUS)

Competitive Landscape

The Shariah-compliant ETF market is relatively niche. HLAL and SPUS are primary competitors. HLAL's advantage is its specific focus on the FTSE USA Shariah Index, while SPUS is much larger. HLAL can be comparatively expensive.

Historical Performance: Historical performance can be viewed on any finance website. As performance varies depending on market conditions, a direct numerical representation isn't appropriate in this static data structure.

Benchmark Comparison: HLAL's performance closely tracks the FTSE USA Shariah Index. Tracking error is generally low.

Expense Ratio: 0.5

Average Trading Volume

The average trading volume for HLAL is moderate, which can affect trade execution costs.

Bid-Ask Spread

The bid-ask spread for HLAL can fluctuate, potentially increasing transaction costs, particularly during periods of low trading volume.

Market Environment Factors

HLAL is affected by broad market trends, sector performance (particularly technology, which often has a high weighting in Shariah-compliant indices), and interest rate movements. Changes in Islamic finance regulations can also impact the fund.

Growth Trajectory

HLAL's growth trajectory is dependent on investor interest in Shariah-compliant investments and overall market conditions. Increased awareness and adoption of Islamic finance principles could drive growth.

Competitive Edge

HLAL's primary advantage lies in its specific focus on providing access to Shariah-compliant U.S. equities through a passively managed ETF. This caters to a niche market of investors seeking investments aligned with Islamic principles. Its low tracking error to the FTSE USA Shariah Index makes it attractive. However, higher expenses may deter some investors. Further, greater investor demand for sharia compliant ETFs could drive growth.

Volatility

HLAL's volatility is generally in line with the broader U.S. equity market, as represented by its benchmark index.

Market Risk

HLAL is subject to market risk, including the potential for losses due to economic downturns, geopolitical events, and changes in investor sentiment. Risks specific to Shariah-compliant investing include the exclusion of certain sectors that may outperform the broader market.

Ideal Investor Profile

The ideal investor for HLAL is someone seeking Shariah-compliant investment options in the U.S. equity market. This includes individuals, institutions, and financial advisors looking to align their investments with Islamic principles.

Market Risk

HLAL is suitable for long-term investors seeking passive exposure to U.S. Shariah-compliant equities. It is also appropriate for those looking to diversify their portfolios with investments that adhere to specific ethical or religious guidelines.

The Wahed FTSE USA Shariah ETF (HLAL) provides access to Shariah-compliant U.S. equities, tracking the FTSE USA Shariah Index. It appeals to investors seeking investments aligned with Islamic principles. While the expense ratio is higher than some broad market ETFs, the fund offers a targeted approach to Shariah-compliant investing. It faces competition from SPUS and requires more promotion to increase market share. Its volatility is similar to its benchmark which helps maintain its portfolio goals.

• SPUS
• ISHD

Data Sources:

• Wahed Invest Website
• FTSE Russell Index Data
• ETF.com
• Morningstar

Disclaimers:

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