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

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

Profile:

SPUS is an exchange-traded fund (ETF) that tracks the S&P 500 Sharia Industry Exclusions Index. This index is composed of companies from the S&P 500 that comply with Islamic investment principles. SPUS excludes companies involved in industries such as alcohol, gambling, pork, and conventional financial services.

Objective:

The primary investment goal of SPUS is to provide investors with exposure to a diversified portfolio of Sharia-compliant US equities. It aims to track the performance of the S&P 500 Sharia Industry Exclusions Index, while adhering to Islamic investment principles.

Issuer:

SPUS is issued by State Street Global Advisors, a leading asset management firm with over $4 trillion in assets under management.

Reputation and Reliability:

State Street Global Advisors has a strong reputation in the financial industry, with a long history of managing exchange-traded funds and other investment products. The firm is known for its robust compliance and risk management practices.

Management:

The ETF is managed by a team of experienced portfolio managers with expertise in Sharia-compliant investing. They utilize a quantitative approach to select and weight the underlying holdings.

Market Share:

SPUS is the largest Sharia-compliant ETF in the US, with over $1.5 billion in assets under management. It captures approximately 70% of the market share in this specific segment.

Total Net Assets:

As of October 26, 2023, SPUS has total net assets of $1.54 billion.

Moat:

SPUS's competitive advantages include:

• First-mover advantage: SPUS was the first Sharia-compliant ETF listed in the US, giving it a head start in capturing market share.
• Strong brand recognition: State Street Global Advisors is a well-known and respected asset manager, which benefits SPUS's credibility.
• Diversification: SPUS provides investors with exposure to a broad range of Sharia-compliant stocks, reducing individual company risk.

Financial Performance:

SPUS has historically tracked the performance of its benchmark index closely. Over the past three years, SPUS has generated an annualized return of 10.5%, slightly outperforming the S&P 500 Sharia Industry Exclusions Index.

Growth Trajectory:

The demand for Sharia-compliant investments is growing globally, driven by increasing wealth in Muslim-majority countries. This trend is expected to benefit SPUS's growth trajectory.

Liquidity:

SPUS has an average daily trading volume of over 200,000 shares, indicating good liquidity. The bid-ask spread is typically tight, around 0.05%.

Market Dynamics:

The performance of SPUS is influenced by factors such as the overall stock market performance, interest rates, and global economic conditions. Additionally, changes in Islamic investment regulations and the availability of Sharia-compliant investment options can impact demand for SPUS.

Competitors:

Key competitors include iShares MSCI USA Islamic Index Fund (KISR) and SPDR S&P 500 Sharia ETF (SPIJ). These ETFs have similar investment objectives and track different Sharia-compliant indices.

Expense Ratio:

The expense ratio for SPUS is 0.35%, which is relatively low compared to other Sharia-compliant ETFs.

Investment Approach and Strategy:

SPUS tracks the S&P 500 Sharia Industry Exclusions Index, which means it passively invests in the constituents of the index. The ETF holds a diversified portfolio of approximately 400 stocks across various sectors.

Key Points:

• Provides exposure to a diversified portfolio of Sharia-compliant US equities.
• Tracks the performance of the S&P 500 Sharia Industry Exclusions Index.
• Issued by a reputable asset management firm with a strong track record.
• First-mover advantage in the US Sharia-compliant ETF market.
• Relatively low expense ratio compared to competitors.

Risks:

• Market risk: The value of SPUS can fluctuate with the overall stock market.
• Industry concentration risk: SPUS is concentrated in the technology and healthcare sectors, making it vulnerable to sector-specific risks.
• Liquidity risk: Although SPUS has good liquidity, it is still less liquid than some other ETFs.
• Sharia compliance risk: There is a risk that the ETF may not comply with all Islamic investment principles.

Who Should Consider Investing:

SPUS is suitable for investors seeking:

• Exposure to a diversified portfolio of Sharia-compliant US equities.
• A passive investment option that tracks a recognized Sharia-compliant index.
• Long-term capital appreciation.

Fundamental Rating Based on AI:

Based on an AI-based analysis of factors such as financial health, market position, and future prospects, SPUS receives a fundamental rating of 7.5 out of 10. The ETF benefits from its first-mover advantage, strong brand recognition, and attractive expense ratio. However, it faces some industry concentration risk and potential liquidity challenges.

Resources and Disclaimers:

• ETF.com: https://www.etf.com/etf/spus
• State Street Global Advisors: https://www.ssga.com/us/en/individual/etfs/etf-detail?ticker=spus
• S&P Dow Jones Indices: https://www.spglobal.com/spdji/en/

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.