This article was first published in Islamic Finance news Volume 17 Issue 8 dated the 26th February 2020.

Aliredha Walji, Vice President, USA, examines the new Halal ETFs, in this article to Islamic Finance news.

Last year brought the launch of three new products to the Islamic financing market in the US: HLAL, SPUS and SPSK. All three are exchange-traded funds (ETFs) which hold assets — like a mutual fund — but can be traded like stocks, making them more liquid. How are these new players performing in the market and how do they compare with other options and benchmarks?

It is interesting to note that while equity investors have long touted the S&P 500 Index as the benchmark to beat, the five-year performance of the S&P 500 Shariah Industry Exclusions Index (established to adhere to AAOIFI scholarly guidelines) has actually been better than the S&P 500 itself. This may come as a surprise to those who doubt the ability of Shariah compliant investments to deliver returns comparable to the broader market.