SP Funds S&P Global REIT Sharia ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's effective investment philosophy supports an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in quality exposure and an underweight in yield exposure compared with category peers. A high quality exposure means holding stocks that are consistently profitable, growing, and have solid balance sheets. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. The team managing the passive strategy earns the strategy an Average People Pillar rating, following a recent upgrade from Below Average. The strategy's parent organization doesn't stand out, earning the firm an Average Parent Pillar rating. It has displayed a handful of investor-friendly attributes including a favorable lineup success ratio and a high average Morningstar Rating.

Analyst Rating

Equinix

Prologis

AvalonBay Communities

Camden Property

Mid-America Apartment Communities

Equity Residential

Equity LifeStyle Properties

Weyerhaeuser

CubeSmart

Rexford Industrial Realty

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. SP Funds S&P Global REIT Sharia ETF earns an Above Average Process Pillar rating. The main driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 100% also underpins the rating. 

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the performance, before fees and expenses, of the S&P Global All Equity REIT Shariah Capped Index.  The index includes all REIT securities listed in developed and emerging markets and included as constituents of the S&P Global BMI Shariah Index, a comprehensive global Sharia-compliant index of publicly-traded equity securities. Under normal circumstances, and at least 80% of the fund's total assets will be invested in the component securities of the index. It is non-diversified. 

 The portfolio is overweight in real estate by 3.5 percentage points in terms of assets compared with the category average, and its healthcare allocation is similar to the category. The sectors with low exposure compared to category peers are consumer cyclical and financial services; however, the allocations are similar to the category. The portfolio is positioned across 37 holdings and is relatively concentrated. Specifically, 75.0% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 61.5% average. And in closing, in terms of portfolio turnover, this portfolio trades more frequently than the average peer in its category, which may result in higher trading costs for investors and cause a drag on performance.

Above Average

Process

SP Funds’s team earns An Average People Pillar rating. The main contributor to the rating is the firm's five-year retention rate of 100%. A low cost, with fees that rank in its category's least expensive 20%, also bolsters the rating. Fees reduce net returns, so the team has a lower expense hurdle to overcome. Lastly, the rating is limited by the combined average five-year excess return of each manager, which suggests that the funds they manage have underperformed their respective category average.

Average

People

SP Funds is an industry-standard asset manager, leading to an Average Parent Pillar rating. The firm has had encouraging initial results among its product shelf. Its three-year risk-adjusted success ratio is 100%, meaning that 100% of the products have both survived and beaten their respective category median on a risk-adjusted basis. A high success ratio indicates good performance and provides insight into a firm’s discipline around investment strategy and product development. A strength of SP Funds is its very competitive risk-adjusted performance. The firm's open-end and exchange-traded funds average an overall Morningstar Rating of 4.0 stars. An average tenure of only two years among the longest-tenured managers at SP Funds is concerning. In isolation, seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions.

Parent

SP Funds S&P Global REIT Sharia ETF

SPRE tracks a market-cap-weighted index of Shariah-compliant global REITs.

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This article compares the SP Funds S&P Global REIT Sharia ETF and the iShares Global REIT ETF, both of which focus on real estate investments. The SP Funds S&P Global REIT Sharia ETF tracks the performance of Shariah-compliant global real estate investment trusts included in the S&P Global BMI.

News for SP Funds S&P Global REIT Sharia ETF ETF (SPRE)