Sharia-compliant ETFs launch on ASX

Yasmine Raso

Senior Journalist

18 October 2022

In an Australian first, Hejaz Financial Services has launched two Sharia-compliant exchange traded funds (ETFs) on the Australian Securities Exchange (ASX), the Hejaz Equities Fund and Hejaz Property Fund.

Hejaz works to provide Muslims and other ethically conscious investors access to funds and investment options that are compliant with Sharia law and avoid investing in activities or sectors considered to be “morally or socially injurious” such as tobacco, gambling, adult entertainment and weapons.

The Hejaz Equities Fund provides investors exposure to a diversified portfolio of Sharia-compliant global equities mainly in Europe, North America and selected Asian markets. It seeks to return 15 per cent and targets the MSCI World Islamic Index benchmark.

The Hejaz Property Fund uses an ethical framework to invest in globally listed real estate investment trusts (REITs), applying Sharia principles as negative screens to exclude assets based on their business activities and failure to meet financial thresholds relating to debt, liquidity and income. It targets a 10 per cent return and is benchmarked to the MSCI World REITs Index.

“While Islamic ETF products are widely available overseas, this will be the first time Islamic Finance products are listed on the ASX,” Muzzammil Dhedhy, COO at Hejaz Financial Services, said.

“By making it simple for retail investors to access our award-winning funds, we are taking an important step towards our goal of providing high-performing, ethical financial products to Australian Muslims.

“Hejaz is also planning to launch a third ETF before the end of the year, providing retail investors with greater access to the Hejaz Income Fund, Australia’s highest returning Islamic Income Fund.”

Equity Trustees has also been appointed Responsible Entity (RE) for the two ETFs.

“We are excited to be involved in the creation of Australia’s first Sharia Compliant ETFs and look forward to applying our funds governance expertise to both,” Russell Beasley, Executive General Manager, Corporate Trustee Services at Equity Trustees, said.

“We congratulate Hejaz Financial Services on delivering this milestone, and for their initiative in servicing an important, growing segment of the market.”