Sharia Compliant

Islamic robo-advisor Wahed lists Shariah compliant ETF

Wahed Invest, New York-based Shariah compliant robo-advisor, is listing its first ETF. The Wahed FTSE USA Shariah ETF (HLAL) will track the FTSE USA Shariah Index. it starts with the universe of US large and mid-caps. 

Companies that make alcohol, porn, tobacco, weapons and gambling devices, are immediately excluded. So are those that make non-halal food and non-Islamic financial products. HLAL then only buys companies that meet the following ratios:

  • Debt is less than 33.333% of total assets;
  • Cash and interest-bearing items are less than 33.333% of total assets;
  • Accounts receivable and cash are less than 50% of total assets; and
  • Total interest and non-compliant activities income should not exceed 5% of total revenue.

The fund charges 0.50%.

Total return bond ETF from WBI

Absolute Shares Trust is listing total return fixed income ETF, that uses a proprietary model to pick investments. The WBI BullBear Trend Switch US Total Return ETF (WBIN) will use various macroeconomic indicators, including commodity prices, interest rates, sentiment scores, etc., to see which securities give good value given their credit quality and duration.

The fund is relatively unconstrained in what fixed income instruments it can buy. The prospectus indicates it can buy anything from junk bonds, to ETNs to treasuries. As the fund is proprietary, not much is given away.

The fund charges 0.77%. 

Actively managed short duration from newcomer Sit

Sit Fixed Income Advisors and ETF Managers Group are listing an actively managed short duration ETF, for those looking to time the yield curve or manage interest rate risk. ETFMG Sit Ultra Short ETF (VALT) will invest in high quality short term USD-denominated debts. The portfolio will target a weighted average maturity of less than 3 years and expects to maintain a duration of less than 1 year. The prospectus indicates the fund will mostly buy commercial paper, bank debts, government debts and some MBS and ABS.

VALT charges 0.30%, which is quite cheap for a white labelled fund.