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

 The strategy's investment process inspires confidence and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in liquidity exposure and an overweight in quality exposure compared with category peers. Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' flexibility. And a high quality exposure is rooted in holding stocks with low financial leverage and strong returns on equity. The team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like a favorable lineup success ratio and a high average Morningstar Rating. This earns the firm an Average Parent Pillar rating.

Analyst Rating

NVIDIA

Microsoft

Apple

ASML Hld

Broadcom

Shopify

salesforce.com

Advanced Micro Devices

Adobe

QUALCOMM

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. SP Funds S&P Global Technology ETF earns a High Process Pillar rating. The most important 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 buttresses the process. The parent firm's strong risk-adjusted performance, as shown by its average overall Morningstar Rating of 4.0 stars, supports the process as well.

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 1200 Shariah Information Technology Capped Index.  The S&P Global 1200 Shariah Information Technology Capped Index is designed to measure the performance of global large-cap equity securities within the information technology sector that pass rules-based screens for adherence to Shariah investment guidelines, with a cap applied to ensure diversification among companies in the index. 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 technology by 20.0 percentage points in terms of assets compared with the category average, and its energy allocation is similar to the category. The sectors with low exposure compared to category peers are communication services and consumer cyclical, underweight the average by 9.5 and 4.4 percentage points of assets, respectively. The portfolio is positioned across 97 holdings and is relatively concentrated. Specifically, 63.4% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 52.4% average.

High

Process

SP Funds’s team earns An Average People Pillar rating. The largest contributor to the rating is the firm's five-year retention rate of 100%. This fund tracks an index, which also improves its People rating. Historical data, like Morningstar's Active/Passive Barometer, finds that index funds have generally outperformed their active counterparts, especially over longer time periods. Lastly, the rating is limited by the combined average five-year excess return of each manager, which indicates that the funds they manage have lagged 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 Technology ETF

SPTE is a passively managed fund, investing in global technology firms adhering to Shariah investment principles. Stocks selected for the portfolio are weighted based on market-cap.

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