HSBC MSCI USA Islamic ESG UCITS ETF (Acc)

Issuer: HSBC

Asset Class: Equity

TER: 30bps

Trading Currency: USD

Pays Income: False

Listing Date: 18 Nov 2022

Ticker: HIUA

ISIN: IE000I5NV504

This investment product offers targeted exposure to the U.S. equity market, specifically focusing on companies that comply with Islamic investment principles. It aims to replicate the performance of an index composed of large and mid-capitalization U.S. companies that have been rigorously screened to ensure they are Shariah-compliant. This screening process excludes businesses involved in sectors such as alcohol, tobacco, gambling, pork-related products, and conventional financial services that involve interest (riba). Additionally, the underlying index incorporates Environmental, Social, and Governance (ESG) criteria, further refining the selection to include companies that demonstrate strong sustainability practices alongside their Shariah compliance.

For investors seeking to align their portfolios with their faith, this fund provides a crucial building block for accessing the world's largest and most dynamic stock market. By utilizing a physical replication strategy, the fund holds the actual shares of the constituent companies, offering transparency and direct ownership. As an accumulating share class, any dividends paid by the underlying companies are automatically reinvested back into the fund. This strategy is highly beneficial for long-term investors focused on capital appreciation, as it leverages the power of compounding to potentially enhance returns over time without creating regular taxable income events from dividend distributions.

In a broader portfolio context, this fund can serve as a core allocation to U.S. equities for individuals and institutions requiring adherence to Islamic finance principles. It offers a convenient, transparent, and cost-effective vehicle to gain diversified exposure to a pre-screened universe of American corporations. This approach removes the complexity of individual stock selection and compliance checks, providing a systematic way to participate in the growth potential of the U.S. economy while remaining true to specific ethical and religious values.