HSBC MSCI Emerging Markets Islamic ESG UCITS ETF (Acc)

Issuer: HSBC

Asset Class: Equity

TER: 35bps

Trading Currency: USD

Pays Income: False

Listing Date: 13 Jan 2023

Ticker: HIEM

ISIN: IE0009BC6K22

This financial product offers a unique way to invest in the growth potential of developing economies while adhering to specific ethical and religious principles. It provides targeted exposure to a diversified basket of large and mid-capitalization stocks from various emerging market countries. The core of the strategy lies in its rigorous screening process, which ensures that all underlying investments are compliant with Shariah law. This means the portfolio excludes companies involved in industries such as alcohol, tobacco, gambling, and conventional financial services that deal with interest. This makes it a suitable option for investors seeking to align their financial goals with Islamic values.

Beyond its Shariah compliance, the fund incorporates an additional layer of environmental, social, and governance (ESG) screening. This dual-filter approach results in a portfolio that not only avoids religiously prohibited activities but also favors companies with strong sustainability practices and responsible corporate behavior. By investing in this instrument, individuals can gain access to high-growth regions like Asia, Latin America, and the Middle East, which are often underrepresented in standard portfolios. The strategy aims to capture the long-term capital appreciation associated with the economic expansion of these regions, driven by favorable demographics, rising consumer classes, and technological innovation.

This investment vehicle is designed for those who want a convenient, single-instrument solution to access a values-based emerging markets equity strategy. It is particularly compelling for Shariah-conscious investors but also appeals to a broader audience of ethical investors who prioritize ESG factors. By using a physical replication method, the product directly holds the underlying securities, providing transparency and closely tracking the performance of its specialized benchmark index. It serves as a core holding or a satellite position for diversifying a global equity portfolio with an ethical and growth-oriented focus.