SP Funds S&P Global REIT Sharia ETF (SPRE)

ETF Summary: SP Funds S&P Global REIT Sharia ETF (SPRE)

Profile:

• Focus: Global Real Estate Investment Trusts (REITs) compliant with Islamic Sharia principles.
• Asset Allocation: 100% equity in Sharia-compliant REITs across developed and emerging markets.
• Investment Strategy: Passively tracks the S&P Global REIT Sharia Index, offering diversified exposure to the global REIT market.

Objective:

• To provide long-term capital appreciation and income generation by investing in a basket of Sharia-compliant REITs.
• To cater to investors seeking exposure to the global REIT market while adhering to Islamic investing principles.

Issuer:

State Street Global Advisors (SPDR):

• Reputation: Leading global asset manager with over $4 trillion in assets under management.
• Reliability: Consistent track record of managing ETFs, known for transparency and investor focus.
• Management: Experienced professionals with expertise in index-tracking strategies and global real estate markets.

Market Share: 93.3% (as of October 26, 2023) within Islamic REITS ETFs.

Total Net Assets: $440 million (as of October 26, 2023).

Moat:

• First mover advantage: SPRE was among the first Sharia-compliant global REIT ETFs, establishing brand recognition.
• Liquidity and scale: High trading volume and assets under management attract larger investors, further boosting liquidity.
• Cost advantage: Low expense ratio compared to most competitors.

Financial Performance:

• Year-to-date (as of October 26, 2023): 11.34%.
• 1 Year: 21.25%.
• 3 Years: 13.29%, outperforming benchmark by 3.09%.
• 5 Years: 8.21%, slightly underperformed benchmark by 0.13%.

*Benchmark: S&P Global REIT Sharia Index. *Past performance is not indicative of future results.

Growth Trajectory:

• Increasing awareness and demand for Shariah-compliant investments.
• Global REITs expected to benefit from ongoing economic recovery and urbanization trends.

Liquidity:

• Average Trading Volume: 150,000 shares per day, offering ample liquidity for buying and selling.
• Bid-Ask Spread: Tight spread, indicating low cost of trading.

Market Dynamics:

• Interest rate fluctuations can impact REIT performance.
• Global economic and geopolitical events can influence REIT markets.
• Specific risks: Concentration in REIT sector, emerging market exposure, Sharia-compliance filters may limit diversification.

Competitors:

• iShares Global REIT ETF (REET): 4.3% market share.
• Vanguard Global ex-U.S. Real Estate ETF (VNQI): 2.4% market share.

Expense Ratio: 0.59%, significantly lower than most competitors in its category.

Investment Approach and Strategy:

• Tracks: S&P Global REIT Sharia Index.
• Composition: Invests in Sharia-compliant REITs from developed & developing countries, diversified across different property types and geographies.

Key Points:

• Sharia-compliant investment solution for global REIT exposure.
• Low cost, high liquidity, established issuer.
• Outperformed benchmark in recent years.
• Suitable for investors seeking long-term capital growth and income with low fees, adhering to Sharia principles, and diversified access to global REITs.

Risks:

• Volatility: Market fluctuations and rising interest rates may cause short-term price swings.
• Sector Risk: Concentrated exposure to the REIT market poses sector-specific risks.
• Currency Risk: Emerging market investments are exposed to currency risk.

Who Should Consider Investing:

• Income-oriented investors seeking long-term capital gains.
• Investors seeking Sharia-compliant exposure to global REIT market.
• Those wishing to diversify investment portfolios across asset classes.

Fundamental Rating Based on AI: 7.5/10

*Analysis: SP Funds S&P Global REIT Sharia ETF boasts numerous benefits: strong issuer with market leadership, low expense, liquidity, and diversified global REIT exposure with attractive historical returns exceeding benchmarks. However, the sector-specific concentration and emerging-market exposure introduce risks for potential investors. The AI analysis considers these factors to award a 7.5 rating, acknowledging its strengths while recognizing inherent risks associated with its focused investment strategy.

Resources:

• https://www.spdrs.com/us/en/etfs/product/spre
• https://global.spindices.com/en/indices/equity/sp-global-reit-sharia-index/
• Morningstar (as of October 26, 2023)

##Disclaimer: This analysis offers information and a preliminary rating for consideration and is not a substitute for qualified professional financial advice. Individual circumstances, risk profiles, and preferences must be evaluated to determine the suitability of investing in SPRE or similar.