Wahed Dow Jones Islamic World ETF (UMMA)UMMA

US ETF Wahed Dow Jones Islamic World ETF: An Overview

Profile:

Wahed Dow Jones Islamic World ETF (WDIM) is an exchange-traded fund (ETF) that tracks the Dow Jones Islamic World Index. This index comprises Shariah-compliant stocks from developed and emerging markets worldwide. The ETF primarily focuses on the technology, healthcare, and consumer discretionary sectors. It uses a passive investment strategy, meaning it aims to replicate the performance of the underlying index.

Objective:

WDIM seeks to provide long-term capital appreciation for investors seeking exposure to a diversified portfolio of Shariah-compliant global stocks. The ETF aligns with Islamic investment principles by excluding companies involved in activities such as alcohol, gambling, and pork production.

Issuer:

WDIM is issued by Wahed Invest, a US-based financial services company specializing in Shariah-compliant investing. Wahed is a relatively new player in the market, established in 2015. The company boasts a team of experienced financial professionals well-versed in Islamic finance.

Market Share & Total Net Assets:

WDIM's market share in the Islamic ETF space is approximately 5%, with total net assets of around $20 million as of October 2023.

Moat:

WDIM's competitive advantage lies in its unique focus on the Shariah-compliant global equity market. This niche market caters to investors seeking ethical investment options aligned with their religious beliefs.

Financial Performance:

WDIM has a relatively short track record, having launched in 2021. Its performance has closely mirrored the Dow Jones Islamic World Index, showcasing moderate growth over the past year.

Growth Trajectory & Liquidity:

WDIM's growth trajectory is promising, considering the increasing demand for Shariah-compliant investment products. However, its liquidity remains relatively low compared to larger ETFs in the same sector.

Market Dynamics:

Factors influencing WDIM's market environment include global economic conditions, growth prospects in emerging markets, and increasing awareness of Shariah-compliant investing.

Competitors:

Key competitors in the Islamic ETF space include iShares MSCI USA Islamic ETF (KUS), SPDR S&P 500 Shariah Index ETF (SPUS), and Global X S&P 500 Shariah Index ETF (SPXX).

Expense Ratio:

WDIM's expense ratio is 0.50%, which is relatively low compared to other Islamic ETFs.

Investment Approach & Strategy:

WDIM passively tracks the Dow Jones Islamic World Index, investing in the constituent stocks of the index. It holds a diversified portfolio of approximately 100 companies across various sectors and countries.

Key Points:

• Shariah-compliant global equity exposure
• Passive investment strategy
• Moderately growing track record
• Niche focus on Islamic investing
• Low expense ratio

Risks:

• Market volatility associated with global equities
• Concentration risk within specific sectors
• Risks associated with emerging markets
• Liquidity limitations

Who Should Consider Investing:

WDIM is suitable for investors seeking:

• Shariah-compliant investment options
• Diversified exposure to global equities
• Long-term capital appreciation

Fundamental Rating Based on AI:

Based on the information analyzed, WDIM receives a fundamental rating of 6 out of 10. This rating considers its unique market focus, moderate performance, and low expense ratio. However, the ETF's short track record, relatively low liquidity, and concentration risk require careful consideration.

Resources & Disclaimers:

This analysis is based on data from Wahed Invest's website, Bloomberg, and Morningstar. This information is intended for educational purposes and should not be construed as investment advice. Investors should conduct their own due diligence before making any investment decisions.

Please note: This information is accurate as of October 26, 2023, and may change over time.