HSBC MSCI Europe Islamic ESG UCITS ETF (Acc)
| Issuer: HSBC |
| Asset Class: Equity |
| TER: 30bps |
| Trading Currency: USD |
| Pays Income: False |
| Listing Date: 06 Dec 2022 |
| Ticker: HIEU |
| ISIN: IE000AGFZM58 |
This investment product is designed to offer exposure to a portfolio of large and mid-capitalisation companies from developed European equity markets that adhere to Islamic investment principles. It achieves this by tracking a specialised benchmark that employs a dual-screening process. First, potential constituents are assessed for Shariah compliance, which excludes businesses involved in activities such as alcohol, tobacco, gambling, pork-related products, and conventional financial services. Subsequently, the remaining companies are subjected to an ESG screening, ensuring they meet specific environmental, social, and governance criteria. The result is a concentrated portfolio of 35 securities that align with both Islamic values and broader sustainability goals.
The fund is suitable for investors seeking to build a core European equity allocation while adhering to specific ethical and religious guidelines. By using a physical replication method, the fund holds the actual underlying stocks of the index, which provides transparency and direct ownership for the investor. As an accumulating share class, any dividends paid by the underlying companies are not distributed to shareholders but are instead reinvested back into the fund. This strategy can enhance long-term returns through the power of compounding and is often more tax-efficient for investors focused on capital appreciation over income generation.
Investing in this strategy provides access to a mature and stable economic region, home to many globally recognised industry leaders, through a unique ethical lens. It represents a compelling intersection of faith-based investing and the rapidly growing trend of sustainable finance. By focusing on a select group of companies that pass both rigorous Shariah and ESG filters, the portfolio offers a concentrated bet on what are deemed to be high-quality, ethically sound businesses. This makes it an attractive option for conscientious investors who want their capital to generate competitive returns without compromising their core principles and values.
