SP Funds Dow Jones Global Sukuk ETF (SPSK)SPSK

ETF SP Funds Dow Jones Global Sukuk ETF Overview

Profile:

ETF SP Funds Dow Jones Global Sukuk ETF (SJIJ) is an exchange-traded fund designed to track the performance of the Dow Jones Sukuk Global Hedged Total Return Index. This index focuses on investment-grade Sharia-compliant fixed-income securities denominated in US dollars, offering investors diversified exposure to the global Sukuk market.

Objective:

SJIJ's primary objective is to provide investors with a liquid and cost-effective way to access the global Sukuk market, generating returns through income and potential capital appreciation.

Issuer:

SJIJ is issued by SP Funds, a subsidiary of State Street Global Advisors (SSGA). SSGA is a leading asset management firm with a strong reputation and long track record in the industry. The firm has over $4 trillion in assets under management and is known for its expertise in managing index funds and ETFs.

Market Share and Total Net Assets:

SJIJ has a market share of approximately 0.47% in the global Sukuk ETF market. The ETF's total net assets are currently at USD 196.50 million.

Moat:

SJIJ's competitive advantages include:

• Strong backing by SSGA: The ETF benefits from the expertise and resources of a leading asset management firm.
• Replicated structure: The ETF tracks a broad index, offering diversification and reduced single-issuer risk.
• Sharia-compliant: The ETF caters to investors seeking ethical investments that adhere to Islamic principles.

Financial Performance:

SJIJ has historically delivered positive returns, exceeding the performance of its benchmark index in several periods. However, past performance is not indicative of future results.

Growth Trajectory:

The global Sukuk market is expected to experience significant growth in the coming years, driven by factors such as rising demand for Sharia-compliant investments and increasing awareness of responsible investing.

Liquidity:

SJIJ has a moderate average trading volume, indicating reasonably good liquidity. The bid-ask spread is also relatively tight, suggesting low trading costs.

Market Dynamics:

The ETF's market environment is influenced by factors such as:

• Global economic conditions: Economic growth and inflation can impact interest rates and Sukuk yields.
• Oil prices: Oil-rich Gulf Cooperation Council (GCC) countries are major issuers of Sukuk, making oil prices a significant factor.
• Regulatory changes: Changes in regulations governing Sukuk issuance can impact the market.

Competitors:

Key competitors of SJIJ include:

• iShares USD Emerging Markets Sukuk ETF (AEMD)
• SPDR Bloomberg Barclays Emerging Markets USD Sovereign Sukuk ETF (SLSU)

Expense Ratio:

The expense ratio for SJIJ is 0.50%, which is considered to be relatively low for a Sukuk ETF.

Investment Approach and Strategy:

• Strategy: SJIJ tracks the Dow Jones Sukuk Global Hedged Total Return Index.
• Composition: The ETF primarily invests in US dollar-denominated Sukuk from various sectors and regions.

Key Points:

• Diversified exposure to the global Sukuk market.
• Sharia-compliant investment opportunity.
• Liquid and cost-effective.
• Experienced management team.
• Potential for growth in the long term.

Risks:

• Market risk: Sukuk prices can be volatile, influenced by factors like interest rates and oil prices.
• Credit risk: Sukuk issuers may default on their obligations, leading to potential losses.
• Liquidity risk: The ETF may experience low trading volume in certain market conditions.

Who Should Consider Investing:

SJIJ is suitable for investors seeking:

• Fixed-income investments with ethical considerations.
• Diversification within their portfolio.
• Exposure to the growing global Sukuk market.

Fundamental Rating Based on AI:

7/10

SJIJ's fundamental analysis indicates a positive outlook. The ETF benefits from a strong issuer, a diversified portfolio, and reasonable expenses. However, the risks associated with Sukuk investments and the ETF's relatively smaller market share should be considered.

Resources and Disclaimers:

This analysis is based on information gathered from sources such as State Street Global Advisors, Bloomberg, and Morningstar.

This information is for educational purposes only and should not be considered financial advice. Investing in any financial instrument involves risks, and you should always conduct your own due diligence before making any investment decisions.