Javelin Investment Management
revealed last week that it has made the first offering in what the firm calls a series of new and compelling ETFs. The new Javelin Dow Jones Islamic Market International Index Fund
tracks the Dow Jones Islamic Market International Titans 100 Index
, which considers 100 international securities that pass industry and financial ratio screens for Islamic compliance.
Companies that participate in alcohol, tobacco, pork, finance, defense and entertainment related industries as well as those whose total debt, interest-bearing securities or account receivable exceed certain levels are excluded from the index. The index is maintained in conjunction with a five-member Islamic Market Index Shari’ah Supervisory Board to evaluate the compliance of its constituents.
Shari'ah compliant investing has been available to the over seven million Muslims that currently reside in the U.S. for several years through mutual funds such as the Amana Income and Growth Funds
(AMANX, AMAGX) and the Iman Fund
(IMANX), which tracks the Dow Jones Islamic Market US Index
. However, New Jersey-based Javelin claims to have created the first domestic, Shari’ah-compliant ETF.
The funds are being marketed based on both their religious basis and their potential for sound performance. Brint Frith
, president and founder of Javelin, touted the wider benefits of Islamic security screening.
“Adherence to Islamic law leads to a sound investment strategy with an emphasis on concrete assets and services,” Frith noted. “By avoiding such areas as gaming and alcohol, the results are often similar to those of the socially responsible investment funds.”
The Islamic fund could be the first in a wave of religious-based SRI index funds. FaithShares filed
with the SEC in April for a Catholic Values Fund
, a Methodist Values Fund
, a Baptist Values Fund
, a Lutheran Values Fund
and a Christian Values Fund
. Each fund will track a corresponding values index created by FTSE/KLD
. The eligible universe in each case will be the KLD Large Cap Social Index
, which draws from the 400 largest U.S. equities. Each index has an additional layer of screens that reflect the specific religious investing guidelines of each fund. For example, the Catholic Values Index
selects companies that operate in accordance with the U.S. Conference of Catholic Bishops’ Socially Responsible Investment Guidelines.
WALL STREET TO DRAW MUSLIM INVESTORS WITH NEW ETF
PRINCETON NJ, June 30, 2009 -- The first American ETF to adhere to
centuries-old Islamic beliefs about investing and finance is to begin trading on the
New York Stock Exchange today under the ticker symbol JVS.
Javelin Exchange Traded Funds (“JETS”) Dow Jones Islamic Market
International Index Fund will seek to match the performance of the Dow Jones Islamic
Market (“DJIM”) Titans 100 Index. The index is composed of 100 companies located
outside the United States, comprising some twenty-three countries and exposure to
eighteen different trading currencies. The fund anticipates a gross expense ratio of
“Adherence to Islamic law leads to a sound investment strategy with an
emphasis on concrete assets and services” notes Javelin President and Founder Brint
Frith. “By avoiding such areas as gaming and alcohol, the results are often similar to
those of the socially responsible investment funds.” Islamic finance rules are said to
originate with the Prophet Mohammed in the 7th century.
In addition to alcohol and gaming, Islamic law prohibits investment in pork
products and certain forms of entertainment. Because Shar’iah law also objects to
borrowing or lending at interest, financial stocks are reduced as are highly leveraged
The index’s largest sector weighting as of May 29, 2009 was oil & gas,
followed by basic materials, health care, technology and telecommunications. As of
that date, the United Kingdom showed the highest country allocation at 21.04% of
the index, followed by Canada (10.71%), Japan (9.83%) and France (9.82%)..
“With over seven million Muslims in the United States,” Frith adds, “we
were surprised to discover that the investment needs of this vital population were not
being met. Javelin is pleased to be serving this market.”
Javelin Investment Management was founded for the purpose of introducing
a series of new and compelling ETFs. The JETS Dow Jones Islamic Market
International Index Fund is its first offering.
Stay ahead of the news ... Sign up for our email alerts now