The Shariah compliant robo-advisor fraternity has just gotten bigger with a new kid on the block: a Toronto-based digital investment manager has joined firms from the US and Malaysia in attempting to capture a slice of the 1.8 billion Muslim market with affordable and accessible investments.
Wealthsimple seems to have gotten the formula right with its new Muslim-friendly option allowing Shariah-conscious investors access to Halal investments for as low as CA$1 (82.15 US cents). Backed by Power Financial Group, which pumped in CA$100 million (US$82.15 million) in capital, the online platform, like New York-based Wahed, integrates the Modern Portfolio Theory in its passive investment strategy tracking exchange-traded funds instead of picking individual stocks. But unlike the US Islamic robo-advisor or even Labuan-based Farringdon Group, Wealthsimple has kept the entry level at CA$1 – Wahed’s stands at US$500 and Farringdon at US$4,000.
“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.”
Modeled similarly to its existing standard and socially responsible investing portfolios, the Halal investing portfolio does not carry an account minimum and fees remain a flat and transparent 0.4-0.5% of assets managed, depending on the amount invested. Investments can be managed through its digital platform, and investors have unlimited access to financial advisors whom they can contact via the phone, emails or text messages.
The firm’s investment methodology has gained the greenlight of MSCI’s Shariah committee, and provides investors from Canada and the US exposure to an all-equity portfolio of 50 stocks closely tracking the MSCI ACWI Islamic Index.