World's first active sharia-compliant global equity ETF lists on London Stock Exchange - The National

World's first active sharia-compliant global equity ETF lists on London Stock Exchange - The National:

The world’s first actively managed global equity Sharia-compliant exchange traded fund (ETF) will list on the London Stock Exchange on Wednesday, as it looks to capture investor interest from the Middle East and UAE.

The ETF from UK financial services group Almalia aims to achieve capital growth over the medium to long by investing in companies with high returns on capital and low leverage. The asset management and investment screening – to ensure the product remains Sharia-compliant – will be supervised by Sanlam Investments UK, which oversees £5.3 billion in funds.

“The status quo in the ETF market has always been to track some sort of index but actively managed will allow us to outperform the MSCI Islamic Global Equity Index. Our long-term track record has demonstrated a significant outperformance over time,” Pieter Fourie, global head of equities at Sanlam, told The National. “The ability for an active manager to add value versus the global equity Islamic index is something the market needs – it’s an underserved market.”

ETFs are bought and sold like shares but typically operate as index-tracking funds, passively following a chosen index, such as the S&P 500 or a commodity like gold. The financial products come with zero upfront fee and annual charges as low as 0.07 per cent, giving investors more of a return as actively managed funds charge around 1.5 per cent to 2 per cent.