Barclays Global Investors' ETF arm, iShares, has listed three new Shari'ah-compliant offerings on the London Stock Exchange (LSE).
The iShares have been successfully approved and a Fatwah has been issued by Barclays’ newly created Shari’ah panel.
Seeding partners for the initial three Shari'ah iShares include Citigroup and Susquehanna International Securities.
The new LSE listed iShares funds are:
- iShares MSCI World Islamic – providing exposure to 793 stocks at 0.60%
- iShares MSCI Emerging Markets Islamic – providing exposure to 306 stocks at 0.85%
- iShares MSCI USA Islamic – providing exposure to 276 stocks at 0.50%
Unlike conventional MSCI indices, iShares says the new ETFs have a higher exposure to the energy, materials and technology sectors than the financial sector due to the Shari’ah screens.
The iShares are not restricted to Islamic investors.
Rory Tobin, iShares Europe CEO, says the company has responded to the demand from Islamic and non-Islamic investors who seek the core benefits of ETFs aligned with Shari’ah principles.
“Managing investments according to Shari’ah principles is typically time inefficient for most professional investors since the vast majority of investment decisions need to be pre-approved by Islamic Scholars,” he says.
“ETFs provide diversification and multi-dealer liquidity of Shari’ah compliant securities in one, simple trade and give access to more complex markets by way of the iShares MSCI Emerging Markets Islamic fund.”
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