Alternative Investments/ESG: The SP Funds S&P Global REIT Sharia ETF For Exposure To Shariah-Compliant Real Estate
This is a new faith-based ETF from SP Funds, home of North America’s largest family of Shariah-compliant ETFs.
SP Funds has a solution for investors looking for Shariah-compliant exposure to real estate using the ETF vehicle. The asset manager has launched North America’s first Shariah-compliant REIT ETF. The SP Funds S&P Global REIT Sharia ETF (NYSEARCA: SPRE) launched on the New York Stock Exchange on December 30.
SP Funds S&P Global REIT Sharia ETF
The new ETF tracks the S&P Global Shariah All REIT Capped Index. This index measures all Shariah-compliant constituents of the S&P Global REIT Index which is a benchmark of listed equity REITs in both developed and emerging markets.
The S&P Global Shariah All REIT Capped Index complies with all Shariah parameters recommended by the S&P Shariah Supervisory Board. Accordingly, the fund will not invest in REITs affiliated to industries such as alcohol, tobacco, pork-related products, financial services such as banking and insurance, weapons and defense, entertainment including hotels, casinos, cinema, pornography, music et cetera, and companies engaged in interest-based financial services.
Unsuitable REITs are therefore removed. The remaining population of REITS undergoes filtering through various financial ratio filters according to Shariah criteria.
Thus, REITs having a total debt by average market capitalization, and accounts receivables by average market capitalization of more than 30% would not find a place in the portfolio.
The ETF has an expense ratio of 0.69%.
Suited for investors seeking halal, real estate exposure
“The SP Funds S&P Global REIT Sharia ETF has joined our family of ETFs which are designed not only for investors who might be looking for Halal exposure but for any investor who is seeking a value-focused portfolio as well as those who seek to avoid over-levered enterprises,” said Naushad Virji, CEO of SP Funds.
“Real Estate has always been a preferred asset class for value investors. This Shariah-compliant REIT ETF will certainly be welcome especially for its stability and performance in turbulent market conditions,” Virji added.
SP Funds partnered with Tidal ETF Services for the launch of this ETF.
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