#London #United Kingdom #Wahed #UCITS ETFs #Islamic Finance

Wahed's Groundbreaking UCITS ETFs

Wahed, a leader in Islamic fintech, has taken a monumental step in the investment landscape with the launch of its new suite of UCITS equity ETFs. These funds not only adhere to Shariah principles but also introduce an innovative ethical screening process focused on human rights and injustice. This evolution makes Wahed's offerings unique in the European ETF market, melding established Islamic finance practices with a broader commitment to ethical investing.

What are UCITS ETFs?

UCITS, or Undertakings for Collective Investment in Transferable Securities, are investment vehicles in Europe that provide safe and regulated investment options, allowing for cross-border marketing. Wahed's latest ETFs are notable for integrating Shariah compliance with an additional layer of ethical scrutiny, ensuring that investments align with both Islamic values and fundamental human rights considerations.

Key Principles of the New ETFs

The ETFs comprise two flagship funds, both rigorously vetted for Shariah compliance. This ensures the exclusion of industries such as alcohol, gambling, and conventional banking, which are considered non-compliant with Islamic law. What sets Wahed apart is its emphasis on an Ethical and Human Rights Review based on three core dimensions:

1. Salience: Assessing the potential severity of human harm related to the investment.
2. Responsibility: Evaluating a company’s involvement or profit derived from harm.
3. Responsiveness: Gauging how a company addresses and commits to improving its ethical practices.

These assessments ensure that the investment choices made are not only compliant with Shariah but also promote a more expansive understanding of moral responsibility in business practices.

Leveraging Established Human Rights Frameworks

Wahed's framework integrates respected international human rights standards, such as those set by the UN's Office of the High Commissioner for Human Rights and various implications stemming from the Uyghur Forced Labor Prevention Act. This multilayered approach reinforces Wahed's commitment to protecting human rights and addresses pressing global issues through ethical investment.

Insights from Wahed's CEO

Mohsin Siddiqui, the CEO of Wahed, articulated the essence of this new venture by stating, “This added layer is a natural extension of Islamic values. Principles like responsibility, the protection of human dignity, and the pursuit of good are all grounded in the very spirit of Shariah.” This remark underscores the company's dedication to aligning its financial products with the higher moral standards espoused in Islamic teachings.

Innovation in Islamic Finance

Wahed's influence in the Islamic finance sector is noteworthy. The company has already launched the first Shariah-compliant ETFs on the Nasdaq and has built a substantial client base of over 450,000 investors globally, managing assets exceeding $1 billion. By broadening its offerings to the European market, Wahed reinforces its status as a pioneering force dedicated to democratizing access to ethical finance.

Active Management for Ethical Investments

A significant aspect of Wahed’s UCITS ETFs is their classification as actively managed funds. This enables Wahed to swiftly adapt to new information or humanitarian concerns, ensuring ongoing alignment with Islamic values and a steadfast commitment to justice and human dignity. This model marks a transformative approach to ethical investing, particularly for Muslim investors seeking to align their financial goals with their ethical convictions.

Conclusion

With the launch of these groundbreaking UCITS ETFs, Wahed not only reaffirms its leadership in Islamic finance but also takes a vital step towards integrating human rights considerations into the financial sphere. As investors increasingly demand accountability and ethical practices from their financial institutions, Wahed's innovative products are poised to set new standards for responsible investing in Europe and beyond.