Wahed Invest, New York-based Shariah compliant robo-advisor, is listing its first ETF. The Wahed FTSE USA Shariah ETF (HLAL) will track the FTSE USA Shariah Index. It starts with the universe of US large and mid-caps.
Companies that make alcohol, porn, tobacco, weapons and gambling devices, are immediately excluded. So are those that make non-halal food and non-Islamic financial products. HLAL then only buys companies that meet the following ratios:
- Debt is less than 33.3% of total assets;
- Cash and interest-bearing items are less than 33.3% of total assets;
- Accounts receivable and cash are less than 50% of total assets; and
- Total interest and non-compliant activities income should not exceed 5% of total revenue.
The fund charges 0.50%.