Growing Universe of Shariah-Compliant ETFs Opens Up Investing Opportunities for Muslims

Singapore (27 July 2019) – The growing number of Shariah-compliant exchange-traded funds (ETFs) in the market has opened up the investment universe available to Muslim investors.

There are now a total of 18 ETFs from 11 issuers in the Shariah-compliant universe with a total asset under management reaching more than USD 500mln, Khairi Shahrin Arief Baki, chief executive officer of Malaysia-based i-VCap Management said in a recent presentation in Singapore.

ETF Masraf Al Rayan , which gives investors exposure to Qatar, boasts the largest AUM at USD 162.7mln, he said.

I-Vcap’s last addition to the ETF universe was its issuance of MyETF–US50 – short for MyETF Dow Jones US Titans – offering investors exposure to the 50 largest Shariah-compliant companies listed in the US.

Launched in January 2018 and listed on Bursa Malaysia on 28 February 2018, MyETF-US50 returned since its inception 16.87% in June 2019, he said.

According to Khairi, ETFs are the fastest growing investment product globally with total assets at USD 5.395trn. An ETF is an open-ended investment fund listed and traded on a stock exchange. Combining features of an index fund and a stock, ETFs are passively managed, making them cheaper than unit trusts.  An investor incurs a brokerage fee and management fee of less than 1% respectively, while unit trusts sales fee is between 3%-5% and pays a management fee of 1%-2%.

I-VCap is the largest issuer of Shariah-compliant ETFs. Its parent is ValueCap, in turn owned by Khazanah Nasional (33.3%), KWAP (33.3%) and PNB (33.3%).

Below is a list of the global Shariah-compliant ETFs

List of Global Islamic ETFs

Source: I-VCap Management
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