ETF Hearsay
Thursday, October 15, 2020

Shariah Global REIT ETF - new filing alert

Sharia Global REIT ETF



Ticker (tentative): SPRE

Expense Ratio: Not available yet

Effective date: January 11, 2021 (Monday)

Index: S&P Global Sharia [sic] All REIT Capped Index

Trust: Tidal ETF Trust

Sub-Adviser: Naushad Virji of ShariaPortfolio, Inc. "Comprehensive Halal Wealth Management"

Sub-adviser already launched two other ETFs:

  1. SPUS The SP Funds S&P 500 Sharia Industry Exclusions ETF
    • AUM: $33M
    • Inception: 12/18/2019
    • Expense Ratio 0.49%
    • 30 day SEC yield 0.83%)
  2. SPSK The SP Funds Dow Jones Global Sukuk ETF
    • AUM: $30M
    • Inception: 12/30/2019
    • Expense Ratio 0.65%
    • 30 day SEC yield 1.14%)


INDEX INFORMATION

S&P Global Sharia [sic] All REIT Capped Index: includes all real estate investment trust (“REIT”) securities listed in developed and emerging markets and included as constituents of the S&P Global BMI Shariah Index.


S&P Global BMI Shariah Index - (Methodology)


Universe index overview (3 main steps)

Screens provided by Ratings Intelligence Partners, an independent London/Kuwait-based consulting company.

1. First Screening

Companies that receive more than 5% revenue from Sharia-prohibited business activities are removed. These activities include:

  • Advertising of all non-Islamic activities
  • Media & Entertainment (certain producers, distributors and broadcasters of music, movies, television shows and musical radio shows and cinema operators)
  • Alcohol production or sale
  • Cloning
  • Conventional Finance (except: Islamic Banks, Islamic Financial Institutions and Islamic Insurance Companies)
  • Casino management and gambling
  • Pork-related products or production, packaging, and process or any other activity related to pork
  • Pornography
  • Tobacco manufacturing or sale
  • Trading of gold and silver as cash on deferred basis


2. Second screening

Remaining companies’ finances are further examined to ensure they are Sharia compliant. Only those companies that satisfy the following financial ratios will be considered Sharia compliant:

  • Debt is less than 33.333% of total assets;
  • Cash and interest-bearing items are less than 33.333% of total assets;
  • Accounts receivable and cash are less than 50% of total assets; and
  • Total interest and non-compliant activities income are less than 5% of total revenue.


3. Dividend Purification

Sub-adviser will publish per share amount of dividends that requires purification. Investors may purify that portion by absolving an equivalent amount to charitable purposes.


INDEX PAGE

Not available. Here is the page for a non-capped Global REIT index. Name doesn't match the one in the prospectus, so it may still be under development and not actively calculated and published yet. There's a mismatch in the name of the index in the prospectus as well, as it's missing an "h" at the end of "Sharia", which is how S&P names it's Shariah indices.





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About Henry Jim Henry is a senior ETF Product Developer who has launched over 100 ETFs in the USA, Canada, Latin America, and the UK. He has launched global equity and fixed income, non-indexed , currency-hedged, factor ETFs, and tax-sheltered private equity / venture capital funds. HEARSAY stands for Henry’s ETF Alert, Research, and Strategic Analysis sYstem.

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