We’ve long had a local Shariah-compliant ETF issued by Absa and now owned by Satrix. This uses the Top40 as its starting index and then removes non-compliant stocks.
Now Satrix is listing a global Shariah-compliant ETF that tracks large and mid-cap stocks across 23 markets.
The IPO is open
- Closes: 10 October
- Listing: 22 October
- JSE code: STXWIS
- TER: 0.55%
- Dividends: Twice a year
- Benchmark: MSCI World Islamic
“Business activity screening means no investment in companies which are directly active in or derive more than 5% of their revenues from the following (“prohibitive activities”): Adult entertainment, alcohol, cinema, conventional financial services, defence/weapons, hotels, gambling/casinos, music, pork-related products and tobacco.”
“Financial ratio screening: No investment in companies deriving significant income from interest or companies that have excessive leverage. Three financial ratios are used to screen such companies: Total debt over total assets, the sum of a company’s cash and interest-bearing securities over total assets, and The sum of a company’s accounts receivables and cash over total assets. None of these financial ratios may exceed 33.33% and 30% for new inclusions to the indices.”
“Dividend Purification Process: In line with Shariah principles, any income derived from interest or prohibited activities will be deducted from dividends and donated to a charity. The MSCI World Islamic Index includes a “dividend adjustment factor” to purify reinvested dividends.”
ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
