The stocks are selected from global developed, US, developed Europe, emerging markets, and Asia ex-Japan equity universes.

Five new ETFs from HSBC aim to provide investors with exposure to ESG-enhanced, Shariah-compliant exposure to stocks. Two of the new ETFs are already listed on the London Stock Exchange, SIX Swiss Exchange, or Euronext Paris. (ETF Strategy)

The HSBC MSCI USA Islamic ESG UCITS ETF has been listed on London Stock Exchange in US dollars and pound sterling, on Euronext Paris in euros, and on SIX Swiss Exchange in Swiss francs.

The HSBC MSCI Europe Islamic ESG UCITS ETF, meanwhile, has been listed on LSE in US dollars and pound sterling and on Euronext Paris in euros.

Both the above ETFs have an expense ratio of 0.30%.

The ETFs are linked to MSCI Islamic Universal ESG Screened Indices, which are based on larger, regional equity universes.

Thereafter they are screened for Shariah compliance and companies engaged in businesses prohibited by Shariah are excluded.

Other screening factors include excessive leverage and the extent of income derived from interest or prohibited activities, as well as a dividend adjustment factor. Further adjustments are made to apply for the firm’s performance on ESG.

Fundspeak

Olga de Tapia, Global Head of ETF and Indexing Sales at HSBC Asset Management, said: “There is a growing appetite for a range of Islamic passive products as investors look to build Shariah-compliant multi-asset portfolios. We are proud of our long-term commitment to serving Islamic investors worldwide and are excited to bring innovative solutions to these clients.”

“We see a natural overlap between faith-based screening and standard SRI filters and this set of toolkit funds will provide investors with a pathway to gain holistic risk-profiled market exposure in compliance with Shariah law.”

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