ShariaShares Seeks Sharia Law Compliant U.S. ETFs

ShariaShares FTSE USA Fund and the ShariaShares FTSE Developed ex-U.S. Fund will invest in foreign and domestic companies that meet the stringent requirements of Sharia law.

ShariaShares FTSE USA Fund will track the FTSE Sharia USA Index, which comprises 241 mid- and large-cap U.S.-traded shares.

ShariaShares FTSE Developed ex-U.S. Fund will track the FTSE Sharia Developed ex-U.S. Index, a market-cap weighted index which comprises stocks from 25 of the 48 countries in the FTSE GEIS Index Series.

The exchange-traded funds will be permitted to invest 80 percent of their assets in underlying securities, and 20 percent in futures and options contracts

In keeping with Sharia law, the funds will not be allowed to invest in non-Islamic banks, finance, insurance, alcohol, entertainment, or tobacco companies. Moreover, the funds cannot purchase shares in food producers of non-halal or pork products, or weapons manufacturers.

In order to meet the investment criteria of the funds, companies will also have to show debt, cash and interest-bearing items less than 30 percent of total assets, and accounts receivable less than 50 percent of total assets. In addition, they must meet specific revenue and dividend guidelines.

The fund’s advisor is California-based Florentez Capital Management.

Sharia-screened ETFs are popular in Europe. These would be the first in the U.S.

Original Post

Comments

[Ron Rowland:]

JVS

Sep 22 03:36 PM

[Paul Harper:]

if only all funds were run along the same stringent lines.

Sep 22 04:08 PM

[searcher:]

"if only all funds were run along the same stringent lines." Stay tuned, I'm sure there'll be a law, or at least hearings, addressing each and every one of these strictures safeguarding sound investment markets.

Sep 23 02:52 PM