New Listing

Invesco launches developed markets Shariah-compliant ETF

IGDA will track Dow Jones Islamic Market Develop Market index

Theo Andrew

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Invesco has launched an Islamic developed market ETF, its first tracking stocks that are compliant with Shariah investment rules.

The Invesco Dow Jones Islamic Global Developed Markets UCITS ETF (IGDA) is listed on the London Stock Exchange and the SIX Swiss Exchange yesterday, 10 January, with a total expense ratio of 0.40%.

IGDA will track the Dow Jones Islamic Market Develop Market index of over 1,600 stocks that pass rules-based screens for Shariah investment guidelines. Portfolio managers will then use sampling techniques to physically replicate the index.

It will exclude and stocks involved in alcohol, tobacco, pork-related products, non-Islamic financial services, weapons and defence and entertainment.

In addition, several financial screens will be added that will assess the levels of debt or “impure interest income” which will be overseen by a committee of Shariah scholars.

It is the first Shariah compliant UCITS ETF launched by Invesco – in a European market that is currently dominated by BlackRock – and was brought to market in partnership with a single large investor.

Christopher Mellor, head of EMEA ETF equity and commodity product management at Invesco, said: “We have launched the Invesco Dow Jones Islamic Global Developed Markets UCITS ETF after in-depth conversations with one large investor but with the intention it would be suitable for anyone wanting global equity exposure adhering to strict Shariah investment guidelines.

“This is another example of how investors are turning to passive ETFs to meet their specific needs.”

The world’s largest asset manager has three Shariah-compliant ETFs in Europe, the iShares MSCI Emerging Markets Islamic UCITS ETF (IDSE), the iShares MSCI USA Islamic UCITS ETF (ISUS) and the iShares MSCI World Islamic UCITS ETF (ISWD).

In 2020, financial services group Almalia launched the world’s first actively-managed global equity ETF which is compliant with Shariah laws using the services of white-label platform HANetf.

In December, Almalia was replaced by Saturna Capital as the manager of the ETF.

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