Wealthsimple launches Sharia compliant robo-advice

The portfolio will allow Canadian and American Muslims to invest while following Sharia law.

The portfolio will allow Canadian and American Muslims to invest while following Sharia law.

Muslims in Canada and the US can now invest while being compliant with religious laws.

Wealthsimple, which is based in Canada and the US and is soon expanding to the UK, is offering a “Halal Investing” portfolio for those who follow Sharia law.

Islamic law (Sharia) forbids its followers from profiting from some forms of interest, as well as investing in activities like alcohol, tobacco, and gambling.

"We want to enable everyone to live their best financial lives by making really great financial products and advice simple and accessible," said Michael Katchen, CEO and co-founder of Wealthsimple. "A lot of the common financial products are off the table for observant Muslims, and many of the available options are expensive or have high minimums. We wanted to offer a portfolio that had all the benefits of our other portfolios while being compliant with Islamic investing practices."

With over a million Muslims in Canada, 3.3m in the US, and 2.7m in the UK, Sharia compliant investing is a growing area for financial firms. The niche investment has been slowly gaining momentum in the last few years.

Yielders, a property investment platform, was among the first UK fintech company to offer Sharia investing options in February. P2P platform Beehive has been offering Sharia compliant investment options since 2015.

Wealthsimple’s Sharia compliant portfolio will only be available in Canada and America. The service was designed using research index researcher MSCI and was approved by MSCI’s committee of Sharia scholars. The portfolio of 50 stocks closely tracks the MSCI ACWI Islamic Index and filters out companies that are active in or have over 5 per cent of their revenue from prohibited activities such as alcohol, gambling and tobacco. It also filters out companies that have significant income from interest or have considerable leverage.

Clients can invest as little as $1 in Wealthsimple, with fees at 0.4 per cent to 0.5 per cent of assets managed, depending on how much is invested. Users also have access to experienced financial advisers by phone, email or text message. 

This article first appeared on www.roboadvicenews.com