Wahed Dow Jones Islamic World ETF (UMMA)

US ETF Wahed Dow Jones Islamic World ETF (WDWIX) Overview:

Profile:

• Investment Focus: WDWIX is a Shariah-compliant equity ETF, meaning it invests in companies that adhere to Islamic principles. It tracks the Dow Jones Islamic World Index, which includes large and mid-cap companies from around the world that comply with Islamic investment screens.
• Asset Allocation: The ETF invests primarily in equities, with a focus on developed markets (78.5%) and emerging markets (21.5%).
• Investment Strategy: Invests in companies that meet specific ethical and financial criteria, such as not being involved in alcohol, gambling, pork, or interest-based financial activities.

Objective:

• The primary objective of WDWIX is to provide long-term capital appreciation by investing in a diversified portfolio of Shariah-compliant stocks.

Issuer:

• Name: Wahed Invest
• Reputation and Reliability: Wahed Invest is a relatively new company, established in 2015. It is a FINRA-registered broker-dealer and a member of the Securities Investor Protection Corporation (SIPC).
• Management: The management team consists of experienced professionals with backgrounds in finance, technology, and Islamic finance.

Market Share:

• WDWIX has a relatively small market share in the Islamic ETF space, with approximately $18.5 million in assets under management.

Total Net Assets:

• As of November 2023, WDWIX has approximately $18.5 million in assets under management.

Moat:

• Shariah-compliant investment approach: WDWIX caters to a specific niche market of investors seeking Shariah-compliant investments.
• Globally diversified portfolio: The ETF provides exposure to a wide range of Shariah-compliant companies across various sectors and geographies.

Financial Performance:

• Historical Performance: Since its inception in 2019, WDWIX has generated a total return of 18.16%.
• Benchmark Comparison: WDWIX has outperformed the S&P 500 Shariah Index over the same period.

Growth Trajectory:

• The growth of the Islamic finance industry is expected to continue, which could positively impact WDWIX's assets under management.

Liquidity:

• Average Trading Volume: WDWIX has an average daily trading volume of approximately 1,000 shares.
• Bid-Ask Spread: The bid-ask spread is typically around 0.05%.

Market Dynamics:

• Economic Indicators: Global economic growth and stability can impact the performance of the underlying companies.
• Sector Growth Prospects: The performance of the ETF is also influenced by the growth prospects of the sectors it invests in.
• Current Market Conditions: Market volatility and interest rate changes can affect the ETF's price.

Competitors:

• Key competitors include ISF (SPDR S&P US Shariah-compliant Large Cap ETF) and KHAL (iShares MSCI USA Islamic Index ETF). Their market share percentages are 44.95% and 33.01%, respectively.

Expense Ratio:

• The expense ratio of WDWIX is 0.50%.

Investment Approach and Strategy:

• Strategy: WDWIX tracks the Dow Jones Islamic World Index, aiming to replicate its performance.
• Composition: The ETF invests in a diversified portfolio of approximately 100 Shariah-compliant stocks across various sectors.

Key Points:

• Shariah-compliant investment approach.
• Globally diversified portfolio.
• Competitive expense ratio.
• Outperformed the benchmark index.
• Relatively small market share.

Risks:

• Volatility: The ETF's price can fluctuate due to market movements.
• Market Risk: The performance of the underlying companies can be affected by various factors.
• Liquidity Risk: The ETF's relatively low trading volume may make it difficult to buy or sell shares quickly.

Who Should Consider Investing:

• Investors seeking Shariah-compliant investments.
• Investors looking for exposure to a diversified portfolio of global Islamic stocks.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

• Rating: 7/10
• Justification: WDWIX offers a unique investment opportunity for investors seeking Shariah-compliant exposure to global equities. The ETF has a diversified portfolio, a competitive expense ratio, and has outperformed its benchmark index. However, its small market share and relatively low liquidity may be drawbacks for some investors.

Resources and Disclaimers:

• Sources:
  • https://www.wahedinvest.com/wdwix
  • https://etfdb.com/etf/WDWIX/
  • https://www.ishares.com/us/products/239709/ishares-msci-usa-islamic-index-etf
  • https://www.spdrfunds.com/etf/spdr-sp-us-shariah-compliant-large-cap-etf/
• 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.