We want to share with you some exciting news about our platform! Wahed started by revolutionizing the industry with the first ever halal digital investment advisor and today we are proud to announce the launch of our very own, and the first in North America, halal index funds – the Wahed S&P Shariah Fund and the Wahed S&P Dividend Growth Fund.
We sat with Samim Abedi, Wahed’s Global Head of Portfolios, to discuss these funds.
What is the S&P 500 Shariah index fund?
The S&P 500 Shariah index fund is an investment solution exclusively for Wahed clients, which allows investors to get exposure to a diversified portfolio of hundreds of stocks across sectors, such as technology, consumer products, healthcare, for a fraction of the fee of a comparable fund.
How does the S&P 500 Shariah index fund differ from the normal S&P 500 index fund?
The S&P 500 Shariah index fund takes the S&P 500, one of the most commonly used equity indices, and removes prohibited sectors such as gambling, alcohol, defense, and companies that derive a significant portion of their revenues from interest income, such as financials. The index also removes companies that don’t meet shariah-compliant financial screenings.
What is the S&P Dividend Growth Fund?
This is another passive investment solution that tracks companies that have raised dividends consistently over the past 20 years. This strategy has outperformed the broader market with a more selective, but still diversified, approach. Coupled with the core S&P 500 Shariah index fund, these two solutions are the first of their kind for shariah-compliant investors in the United States.
What does passive and active investing mean? And how is it related to the S&P 500 Shariah index funds?
Active investing is when a fund manager tries to beat the overall market by picking and choosing the right stocks. Research has shown that active fund managers doing this successfully and consistently over long periods of time (think 5, 10, 20 years) is highly unlikely, coupled with the fact that the fees on these funds tend to be quite high.
In the words of Vanguard founder John Bogle, we don’t think you should try to find the needle in the haystack, but rather buy the haystack and bank on the growth of the market and economy as a whole. And investing through a low cost vehicle is our recommended way to gain U.S. equity exposure, both in conventional investing, as well as shariah-compliant investing. Although, no market gains can be guaranteed, diversification of an investment portfolio is a healthy practices that can lessen risk of losses and is strongly advocated at Wahed.
How can Wahed clients invest in those two index funds?
Our platform is designed such that investing in line with your faith should not be restrictive based on your wealth. Our account minimums are $100 and opening an account is simple. Visit WahedInvest.com and sign-up today.
Wahed clients will automatically be allocated to these two funds, as well as other assets like gold and sukuks, according to their risk profile. With a platform that gives you a diversified portfolio customized to your needs, at a fraction of the cost of alternatives, it’s really a no brainer.