SP Funds Launches First Sharia REIT ETF ... as Family of Sharia-Compliant ETFs grows.
SP Funds’ approach is geared towards advisors with clients focused on faith-based investing, and others who are seeking unique, socially responsible and ethical investing solutions.
Lake Mary, FL, Jan. 04, 2021 (GLOBE NEWSWIRE) -- SP Funds, home of North America’s largest family of Sharia-compliant ETFs launches North America’s first Sharia-compliant REIT ETF - SP Funds S&P Global REIT Sharia ETF (ticker: SPRE).
SP Funds’ growing family of ETFs offers investors a suite of products to assist them in diversifying their portfolios across equity, fixed income, and now, the real estate asset class. These ETFs also help investors avoid the types of over-levered entities that may be particularly susceptible to volatile performance during a market downturn.
The SP Funds S&P Global REIT Sharia ETF (ticker: SPRE), which launched on the New York Stock Exchange on December 30, tracks the S&P Global Shariah All REIT Capped Index which is designed to measure all Sharia-compliant constituents of the S&P Global REIT Index, a comprehensive benchmark of publicly traded equity REITs listed in both developed and emerging markets.
“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 Sharia-compliant REIT ETF will certainly be welcomed especially given its stability and performance in turbulent market conditions,” added Naushad Virji.
SPRE is based on the S&P Global Shariah All REIT Capped Index. The index follows Sharia-compliance parameters based on the S&P Shariah Supervisory Board. The fund avoids REITs that cater to industries like alcohol, tobacco, pork-related products, conventional financial services (banking, insurance, etc.), weapons and defense, entertainment (hotels, casinos/gambling, cinema, pornography, music, etc.) and companies engaged in interest-based financial services.
Financials are considered eligible if the company is incorporated as an Islamic Financial Institution, such as Islamic banks and Takaful insurance companies. Further, income from impure sources as included in the industries above cannot exceed 5% of revenue. After removing REITs with unacceptable primary business activities, the remaining REITs are evaluated according to several financial ratio filters. The filters are based on criteria determined by Sharia excluding the REITs having a total debt divided by average market capitalization, and accounts receivables divided by average market capitalization of more than 30%.
Non-sharia components also include interest-based financial transactions used by REITs, such as conventional loans, undertaken for new property acquisitions.
The SPRE ETF has strong ESG characteristics like carbon intensity per value invested (Million tons Carbon e/1 million $ invested) at only 11.21.
SPRE has an expense ratio of 0.69%. SP Funds partnered with the team at Tidal ETF Services to bring its funds to market.
The SPRE launch coincided with the first anniversary of SP Funds initial family of ETFs whose performance lived up to expectations despite the COVID-19 global pandemic. The initial ETFs were the SP Funds Dow Jones Global Sukuk ETF (ticker: SPSK) the world’s first Sukuk ETF; and the SP Funds S&P 500 Sharia Industry Exclusions ETF (ticker: SPUS), which tracks the performance of around 200 Sharia-compliant stocks from the S&P 500 Index.
Additional information can be found at sp-funds.com.
# # #
About SP Funds
SP Funds is dedicated to offering an ethical approach to investing that avoids companies with significant debt. By adhering to AAOIFI guidelines, SP Funds ensures that the securities in its ETFs avoid investments in businesses such as tobacco, pornography, gambling and interest-based finance. This results in a collection of socially responsible investments that are in well capitalized companies. For more information, visit sp-funds.com.
About Tidal ETF Services
Formed by ETF industry pioneers and thought leaders, Tidal sets out to disrupt the way ETFs have historically been developed, launched, marketed and sold. With a transparent, partnership approach, Tidal offers a comprehensive suite of services, proprietary tools, and methodologies designed to bring lasting ideas to market. As advocates for ETF innovation, Tidal helps institutions and organizations launch the most interesting and viable ETFs available today. For more information, visit tidaletfservices.com.
Before investing you should carefully consider each Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus. A prospectus may be obtained by visiting sp-funds.com or calling (425)409-9500. Please read the prospectus carefully before you invest.
As with all ETFs, Fund shares may be bought and sold in the secondary market at market prices. The market price normally should approximate the Fund’s net asset value per share (NAV), but the market price sometimes may be higher or lower than the NAV.
The Funds are new with a limited operating history.
Islamic religious law commonly known as Sharia has certain restrictions regarding finance and commercial activities permitted for Muslims, including interest restrictions and prohibited industries, which reduces the size of the overall universe in which the Fund can invest. The strategy to reduce the investable universe may limit investment opportunities and adversely affect the Fund’s performance, especially in comparison to a more diversified fund.
A real estate investment trust (REIT) is a security of a company that invests in real estate, either through real estate property, mortgages and similar real estate investments, or all of the foregoing. The Fund is expected to be concentrated in REITs. Through its investments in REITs, the Fund is subject to the risks of investing in the real estate market, including decreases in property revenues, increases in interest rates, increases in property taxes and operating expenses, legal and regulatory changes, a lack of credit or capital, defaults by borrowers or tenants, environmental problems and natural disasters.
It is not possible to invest directly in an index. Investments in emerging markets may be more volatile and less liquid than more developed markets and therefore may involve greater risks.
Diversification does not ensure a profit or protect against loss in declining markets.
Shares of the Fund are distributed by Foreside Fund Services, LLC.