…as Family of Sharia-Compliant ETFs grows.
SP Funds S&P Global REIT Sharia ETF (SPRE) provides exposure to the Sharia-compliant Real Estate asset class through REITs which meets Sharia screening requirements, including compliant business activities, lower debt levels, and permissible income within acceptable levels.
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 (December 30, 2020) – SP Funds, home of North America’s largest family of Sharia-compliant ETFs launches North America’sfirst 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 FundsS&P Global REIT Sharia ETFhas 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.
