Novel ETF Launch: Islamic Investment Strategy (JVS)

If you said that there are exchange-traded funds for just about everything, that statement is getting closer and closer to accurate than ever.  A new ETF in America is being launched: Javelin Exchange Traded Funds (“JETS”) is launching Dow Jones Islamic Market International Index Fund (NYSE: JVS).  This ETF aims to adhere to centuries-old Islamic beliefs about investing and finance.

The ETF will seek to replicate the performance of the Dow Jones Islamic Market Titans 100 Index, which is composed of 100 companies located outside the United States from twenty-three countries and gives exposure to eighteen different trading currencies.  The fund anticipates a gross expense ratio of 0.68%.

The Islamic law investment strategy has an emphasis on concrete assets and services, and it avoids sector investments in gaming, alcohol, certain forms of entertainment, pork products and more.  The group notes that the results are often similar to those of the socially responsible investment funds.

Financial stocks are reduced as are highly leveraged companies because historic Islamic law objects to borrowing or lending at interest rates.

The index’s largest sector weighting as of May 29, 2009 was oil & gas, followed by basic materials, health care, technology and telecommunications. The breakdown of geography also has the United Kingdom as the highest country allocation at 21.04% of the index, followed by Canada (10.71%), Japan (9.83%) and France (9.82%).

The fund group also noted that there are more than seven million Muslims in the United States, and it feels that the investment needs of this population were not being met.

When you say “something for everyone in ETFs,” it is getting closer and closer to being the truth.

Jon C. Ogg
July 1, 2009