iShares MSCI EM Islamic UCITS ETF USD (Dist)

Issuer: iShares

Asset Class: Equity

TER: 85bps

Trading Currency: USD

Pays Income: False

Listing Date: 10 Dec 2007

Ticker: ISDE

ISIN: IE00B27YCP72

This fund offers targeted exposure to a diversified portfolio of large and mid-capitalization stocks across numerous emerging market countries, with a distinct focus on adhering to Sharia investment principles. The underlying index screens potential constituents to exclude companies whose primary business activities are considered non-compliant with Islamic law. This typically involves sectors such as alcohol, tobacco, gambling, conventional interest-based finance, and certain food production. The result is a unique investment vehicle that allows for participation in the growth potential of developing economies while simultaneously aligning with specific ethical, moral, or religious values. The strategy is designed for those looking to build a portfolio that reflects their principles without foregoing global equity diversification.

By investing in this product, one can gain access to the potentially higher growth trajectories characteristic of emerging economies, driven by factors like favorable demographics, increasing urbanization, and a growing middle class. The portfolio is spread across various countries and sectors that pass the Islamic screening, such as technology, materials, and energy, offering a degree of diversification. However, potential investors must consider the specific risks associated with emerging markets, which include greater currency volatility, political instability, and regulatory changes. Furthermore, the Sharia-compliant screening process can lead to significant sector deviations compared to conventional emerging market benchmarks, which may influence performance. This makes the fund suitable for long-term investors comfortable with emerging market risk and who prioritize a values-based investment approach.