HLAL: A Screening Methodology That Appeals

seekingalpha10-07

HLAL is a Shariah-compliant ETF offering broad U.S. market exposure with a focus on low debt and ethical business practices.The fund tracks the FTSE USA Shariah Index, emphasizing tech and healthcare ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHLAL: A Screening Methodology That Appeals\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-07 05:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4725287-hlal-screening-methodology-that-appeals><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>HLAL is a Shariah-compliant ETF offering broad U.S. market exposure with a focus on low debt and ethical business practices.The fund tracks the FTSE USA Shariah Index, emphasizing tech and healthcare ...</p>\n\n<a href=\"https://seekingalpha.com/article/4725287-hlal-screening-methodology-that-appeals\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"HLAL","symbol_name":"Wahed FTSE USA Shariah ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4725287-hlal-screening-methodology-that-appeals","article_id":"2473192658","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1152080683/image_1152080683.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2473192658","pubTimestamp":1728250200,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"HLAL is a Shariah-compliant ETF offering broad U.S. market exposure with a focus on low debt and ethical business practices.The fund tracks the FTSE USA Shariah Index, emphasizing tech and healthcare ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"HLAL":"Wahed FTSE USA Shariah ETF"},"translate_title":"HLAL：一种有吸引力的筛选方法","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"HLAL":0.9},"content_text":"HLAL is a Shariah-compliant ETF offering broad U.S. market exposure with a focus on low debt and ethical business practices.The fund tracks the FTSE USA Shariah Index, emphasizing tech and healthcare sectors, with Apple and Microsoft comprising nearly 30% of the portfolio.HLAL's sector allocation favors tech (56.6%) and healthcare (12.2%), avoiding industries like alcohol, tobacco, and conventional financial services.While HLAL offers strong financial health and ethical investing, its tech concentration poses risks, and it has underperformed compared to SPUS due to Nvidia's absence.We Are/DigitalVision via Getty Images One of the nice things about the state of the ETF industry is that there are issuers out there who put products designed to match one's religious and ethical beliefs. I know a lot of people tend to think about ESG investing as the quintessential example of a fund that filters out stocks, but there are a number of products out there that focus on religious doctrines. If you're looking for one that adheres to Islamic principles, then you may want to consider the Wahed FTSE USA Shariah ETF (NASDAQ:HLAL). This fund allows investors a chance to get wide coverage of the U.S. stock market while adhering to Shariah law. This goes beyond just following religious rules; it's about an approach that focuses on low debt and ethical business methods. This can appeal to many investors who want to grow their money in a more thoughtful way. HLAL aims to follow the FTSE USA Shariah Index, which tracks how Shariah-compliant companies in the United States perform. This index uses stringent filters to rule out securities based on business activities that Islamic law forbids. What makes the index, and by extension HLAL, stand out is how it targets companies with small amounts of debt. This approach fits with Islamic money rules and often leads to a group of companies with stronger financial health. This feature can be attractive when markets are uncertain or the economy is contracting. A Look At The Holdings Taking a closer look at the fund's investments shows a mix that leans towards tech and health care - areas that often match well with Shariah rules because they have low debt and ethical business practices. wahed.com These are all the major companies you're familiar with (notice that Nvidia is missing here). Apple and Microsoft and the top 2 alone make up nearly 30% of the portfolio, with the top 10 making up 53%. Quite a bit of concentration risk here overall, which is worth being mindful of from a risk perspective. Sector Allocation The sector breakdown of HLAL shows its focus on tech, with Technology making up a huge 56.6. Health Care follows at 12.2%, Industrial Goods and Services at 6.0%, and Energy at 6.1%. The other sectors, like Consumer Products and Services, Retail, and Utilities, each take up smaller chunks of the fund. wahed.com This sector breakdown stems from the Shariah screening method. It tends to favor companies with low debt-to-equity ratios and those not involved in banned activities like alcohol, tobacco, or regular financial services. The big lean towards tech also mirrors the current U.S. market scene, where tech giants lead in market cap. Peer Comparison To compare HLAL with its peers, we need to look at Shariah-compliant funds and broader U.S. equity ETFs. HLAL has a unique position in Islamic finance as one of the few ETFs that focus on the U.S. market. The SP Funds S&P 500 Sharia Industry Exclusions ETF (SPUS) might be its closest rival, as it follows a similar idea but tracks a different index. When we look at the price ratio of HLAL to SPUS, we find that HLAL has underperformed since late 2022. Why? The simplest answer is the right one. SPUS has Nvidia. HLAL does not. stockcharts.com Pros and Cons On the plus side, the fund gives you a solid way to get a piece of some of the smartest and money-wise companies in the U.S. market. The way it picks stocks based on Islamic rules tends to favor companies with healthy balance sheets and good business practices. This can help mitigate risk when in an economic contraction. What's more, HLAL gives Muslim investors or those who want their investments to match Islamic principles an easy way to invest without having to check each security themselves. On the flip side, the fund's focus on a few areas of tech is a mixed bag. This focus has paid off when tech stocks were doing well, but it could backfire if people start moving away from tech stocks or if the government cracks down on big tech companies. Also, by leaving out whole sectors like regular banking, investors might miss potential profits there. Conclusion  I think HLAL is a good choice. If you want to invest in U.S. stocks that follow Islamic rules or if you like companies with low debt and ethical practices, HLAL gives you a great way to do this. The fund has done well since it started, and its screening methodology could be important for whenever the US inevitable rolls into a recession.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2473192658"}