Global Sukuk Investment

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Brief information: The SP Funds Dow Jones Global Sukuk ETF is an exchange traded fund incorporated in the USA. The Fund seeks the performance of the Dow Jones Sukuk Total Return Index. The Index includes U.S. dollar-denominated investment-grade sukuk, which are financial certificates, similar to bonds, issued in the global markets and structured to comply with Islamic religious law commonly known as Sharia.

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Introduction to SP Fund Dow Jones Global Sukuk ETF (SPSK):

The SPSK ETF is designed to track the performance of the Dow Jones Sukuk Total Return (ex-Reinvestment) Index. This index includes sukuk issued by governments, corporations, and other entities worldwide. By investing in the SPSK ETF, investors can gain exposure to a diversified portfolio of sukuk across different regions, sectors, and credit ratings.

Sukuk is structured to be compliant with Shariah law, which is derived from Islamic principles. In addition to interest-free investing, sukuk also adheres to other principles such as avoiding investments in sectors like alcohol, gambling, and pork-related products.

As an ETF, SPSK offers several advantages to investors. It provides a convenient and cost-effective way to gain exposure to a diversified portfolio of sukuk without the need to directly purchase individual bonds. The ETF can be bought and sold on stock exchanges like a regular stock, offering liquidity and flexibility to investors. Moreover, the SPSK ETF allows investors to participate in the potential returns generated by the global sukuk market.

What are you investing in?

The SP Fund Dow Jones Global Sukuk ETF (SPSK) is open to individual and institutional investors who are interested in gaining exposure to the sukuk market. The ETF is designed to appeal to investors who wish to align their investments with Islamic principles and those who are seeking diversification within their fixed-income portfolios. 

Investors in SPSK may include:

• Individual Investors: Retail investors who are looking to invest in sukuk and seek a convenient and cost-effective way to access the market. They may include individuals who adhere to Islamic principles and want to invest in accordance with Shariah law.
• Institutional Investors: This category encompasses various entities such as pension funds, insurance companies, endowments, and foundations. Institutional investors often have larger investment portfolios and seek diversification across asset classes, including fixed-income securities like sukuk.
• Financial Institutions: Banks, asset management companies, and other financial institutions may invest in SPSK on behalf of their clients. They may include Islamic banks or financial institutions that cater to clients seeking Shariah-compliant investment options.
• Ethical Investors: SPSK might also attract investors with an ethical investment focus. These investors may be interested in supporting sustainable infrastructure projects or socially responsible investments that align with their values.

Top 10 Holdings

Top 10 Holdings	Weight %
KSA Sukuk Ltd 3.628% 20-APR-2027	3.96
SA Global Sukuk Ltd 2.694% 17- JUN-2031	2.38
Usd Cash	2.35
KSA Sukuk Ltd – 5.268% 25-OCT-2028	2.33
KSA Sukuk Ltd – 2.969% 29-OCT-2029	2.20
ISDB Trust Services – 1.262% 31-MAR-2026	2.06
ISDB Trust Services – 4.598% 14-MAR-2028	1.95
Persusahaan Penerbit Surat Berharga Syariah Negara	1.91
KSA Sukuk Ltd – 4.303%% 19-JAN-2029	1.90
Persusahaan Penerbit Surat Berharga Syariah Negara	1.84

Lipper Leader Rating

	Overall	3 Years
Total Return	5 (226 funds)	4 (226 funds)
Consistent Return	5 (226 funds)	4 (226 funds)
Preservation	4 (6250 funds)	4 (6250 funds)
Tax Efficiency	5 (226 funds)	4 (226)
Expense	4 (431 funds)	4 (431 funds)

How do you grow your money by investing in SP Fund Dow Jones Global Sukuk ETF (SPSK) 

Investing in the SP Fund Dow Jones Global Sukuk ETF (SPSK) offers potential avenues for growing your money. Here’s how investing in SPSK can contribute to the growth of your investment:

•  Exposure to Global Sukuk Market: SPSK invests in a diversified portfolio of sukuk, which are Islamic bonds issued by various entities such as governments, corporations, and financial institutions. Investing in SPSK exposes you to the global sukuk market, which can provide opportunities for capital appreciation and income generation.
• Potential for Capital Appreciation: As the underlying sukuk holdings within the ETF increase in value, the net asset value (NAV) of SPSK may also rise. If the sukuk issuers experience credit quality improvements or market demand for sukuk increases, the value of the sukuk held by SPSK may be appreciated, leading to potential capital gains for investors.
•  Income Generation: Sukuk typically pays periodic distributions based on their contractual terms. By holding SPSK, investors may receive regular income through coupon payments from the underlying sukuk holdings. This income can contribute to the overall growth of your investment and potentially enhance your total returns.
• Diversification Benefits: SPSK offers a diversified exposure to the sukuk market across different regions, sectors, and issuers. This diversification can help reduce the concentration risk associated with investing in individual sukuk securities. By spreading your investment across a range of sukuk, you may benefit from potential growth opportunities while mitigating the impact of any individual sukuk defaults or credit events.
•  Professional Management: SPSK is managed by investment professionals who aim to replicate the performance of the underlying Dow Jones Sukuk Index. Their expertise and ongoing portfolio management can help optimize the fund’s performance and navigate the sukuk market to maximize potential growth opportunities.

What makes SP Fund Dow Jones Global Sukuk ETF (SPSK)  Shariah Compliant? 

SPSK ensures compliance with Shariah principles through a dual screening process that excludes companies involved in non-compliant industries and those that do not pass a certain financial threshold. 

Companies that are excluded from the Shariah Screening process are:

• Advertising 
• Media & Entertainment
• Alcohol 
• Financial Services
• Gambling 
• Pork related activities 
• Pornography 
• Tobacco and electronic cigarettes/vaping products 
• Recreational cannabis
• Trading of gold and silver as cash on deferred basis

Companies then go through another layer of financial screening:

Revenue Share from Non-Compliant Activities	Leverage Compliance	Cash Compliance
Non-Permissible Income (excluding Non-Operating Interest Income) / Revenue < 5%	Debt / Market Value of Equity (36-month average) < 33 %	Accounts Receivables / Market value of Equity (36-month average) < 49 %	(Cash + Interest Bearing Securities) / Market value of Equity (36-month average) < 33%

Country Allocation

Name	Weight %
Cayman Islands	54.96
Indonesia	18.54
Malaysia	9.51
Jersey	3.74

Analysis of SP Fund Dow Jones Global Sukuk ETF (SPSK):

Analysis	Over 1 Year	Over 3 Year
Sharpe ratio	-0.27	-0.28
Sortinio	-0.22	-0.22
Treynor ratio	-0.71	-0.54
Tracking error	1.18	0.84
Information ratio	0.12	0.38
R/R Ratio	-0.03	-0.16
Alpha	-0.09	-0.04
Beta	0.59	0.59
Bear Beta	0.98	0.69
Bull Beta	0.44	0.51
R2	0.81	0.84
Adjusted R2	0.77	0.83
Value at Risk Normal	-2.61	-2.03
Value at Risk normal ETL	-3.26	-2.5
Value at Risk Quantile	-3.6	-2.57

Statistical Analysis	Over 1 Year	Over 3 year
Relative average Return	0.12	0.14
Average Return	-0.05	-0.18
Average Loss	-0.6	-0.5
Max gain	2.4	2.4
Max Loss	-3.6	-3.6

Sharpe Ratio conclusion of SP Fund Dow Jones Global Sukuk ETF (SPSK):

The SP Fund Dow Jones Global Sukuk ETF (SPSK) has exhibited negative risk-adjusted performance based on its Sharpe ratios. With a one-year Sharpe ratio of -0.27% and a three-year Sharpe ratio of -0.28%, the ETF has yet to generate significant excess returns relative to the level of risk taken. This indicates that the returns provided by SPSK need to compensate investors when considering the volatility of its returns adequately. As a result, the SPSK ETF may be considered unattractive to investors seeking positive risk-adjusted returns. 

Sortinio Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The SP Fund Dow Jones Global Sukuk ETF (SPSK) has exhibited negative risk-adjusted performance based on its Sortino ratios. With a one-year Sortino ratio of -0.22% and a three-year Sortino ratio of -0.22%, the ETF has yet to generate significant excess returns relative to the downside volatility experienced. This indicates that the ETF’s returns have not adequately compensated investors for the negative movements in its performance. As a result, the SPSK ETF may be considered less attractive to investors seeking positive risk-adjusted returns

Treynor Ratio  Conclusion of SP Fund Dow Jones Global Sukuk ETF (SPSK):

The SP Fund Dow Jones Global Sukuk ETF (SPSK) has exhibited negative risk-adjusted performance based on its Treynor ratios. With a one-year Treynor ratio of -0.71% and a three-year Treynor ratio of -0.54%, the ETF has yet to generate significant excess returns relative to systematic risk. This indicates that the ETF’s returns need to compensate investors for the level of systematic risk taken adequately. As a result, the SPSK ETF may be less attractive to investors seeking positive risk-adjusted returns.

Tracking Error Conclusion of SP Fund Dow Jones Global Sukuk ETF (SPSK): 

The tracking error is a measure that quantifies the deviation between the performance of an ETF and its benchmark index. For the SP Fund Dow Jones Global Sukuk ETF (SPSK), the tracking error is reported as 1.18% for one year and 0.84% for three years.

A lower tracking error indicates a closer alignment between the ETF’s performance and its benchmark index. In this case, the SPSK ETF has exhibited relatively low tracking errors over the given periods. The effect of a standard tracking error is that it suggests the ETF has successfully closely tracked the performance of its benchmark index. This can favour investors seeking a high correlation between their investment and the benchmark.

Information ratio Conclusion Wahed Dow Jones Islamic World ETF:

The information ratio is a risk-adjusted performance measure that evaluates the ability of an investment to generate excess returns relative to its benchmark, adjusted for the level of risk taken. For the SP Fund Dow Jones Global Sukuk ETF (SPSK), the information ratio is reported as 0.12% for one year and 0.38% for three years.

A higher information ratio indicates that the ETF has achieved a higher risk-adjusted outperformance than its benchmark index. In this case, the SPSK ETF has relatively low information ratios over the given periods. The effect of a low information ratio is that it suggests the ETF has not generated significant excess returns relative to the level of risk it has taken. This indicates that the ETF’s performance has been more in line with its benchmark index, with limited outperformance.

Risk/Reward (R/R) ratio Conclusion Wahed Dow Jones Islamic World ETF:

The risk-to-reward ratio, also known as the R/R ratio, compares the potential downside risk of an investment to its potential upside reward. For the SP Fund Dow Jones Global Sukuk ETF (SPSK), the R/R ratio is reported as -0.03% for one year and -0.16% for three years. A negative R/R ratio indicates that the potential downside risk outweighs the potential upside reward. In this case, the SPSK ETF has exhibited negative R/R ratios over the given periods.

The effect of a negative R/R ratio is that it suggests the ETF’s potential for downside risk is higher compared to its potential for generating positive returns. This indicates that the ETF’s risk profile may not favour investors seeking a higher potential for positive returns relative to the risk taken.

Alpha Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The alpha measures an investment’s risk-adjusted performance compared to a benchmark index. It quantifies the excess return generated by the investment after adjusting for the level of risk taken. For the SP Fund Dow Jones Global Sukuk ETF (SPSK), the alpha is reported as -0.09% for one year and -0.04% for three years. A negative alpha indicates that the ETF has underperformed its benchmark index after risk adjustment. In this case, the SPSK ETF has shown negative alphas over the given periods.

The effect of a negative alpha is that it suggests the ETF has not generated excess returns compared to its benchmark index. This indicates that the ETF’s performance has been weaker than expected, given the level of risk taken.

Beta Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The beta measures an investment’s sensitivity to changes in the overall market or benchmark index. It quantifies the relationship between the returns of the investment and the returns of the market. For the SP Fund Dow Jones Global Sukuk ETF (SPSK), the beta is reported as 0.59% for both the one-year and three-year periods. A beta of 0.59% suggests that the SPSK ETF has exhibited a moderate correlation with its benchmark index. It indicates that the ETF’s price movements have generally aligned with the overall market but to a lesser extent. The effect of a beta of 0.59% is that the ETF’s returns have shown a tendency to move in the same direction as the benchmark index but with less volatility. This suggests that the ETF may offer a relatively stable investment option compared to the overall market.

Bear Beta Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK) :

The bear beta measures an investment’s sensitivity to downward market movements or bearish conditions. It quantifies the relationship between the returns of the investment and the returns of the market during periods of market decline. For the SP Fund Dow Jones Global Sukuk ETF (SPSK), the bear beta is reported as 0.98% for the one year and 0.69% for the three years. A bear beta of 0.98% and 0.69% suggests that the SPSK ETF has exhibited a relatively high sensitivity to downward market movements. This means that during bearish market conditions, the ETF’s returns have declined more than the overall market, albeit to a lesser extent.

The effect of a higher bear beta is that the ETF may experience greater losses or volatility during bearish market periods compared to the overall market. Investors should consider this when evaluating the potential risk and return characteristics of the SPSK ETF.

Bull Beta Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The Bull Beta of the SP Fund Dow Jones Global Sukuk ETF (SPSK) indicates its sensitivity to bullish or upward market movements. A Bull Beta below 1 suggests that the ETF has historically exhibited lower volatility than the broader market during bullish periods.

Based on the given figures, the one-year Bull Beta of 0.44% and the three-year Bull Beta of 0.51% suggest that the SPSK ETF has demonstrated lower volatility than the market over those respective periods. The lower Bull Beta values imply that the SPSK ETF tends to have a more conservative risk profile than the broader market. It may experience smaller price fluctuations during bullish market conditions, potentially providing investors with a more stable investment experience.

R-squared Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The R2 (R-squared) value of the SP Fund Dow Jones Global Sukuk ETF (SPSK) measures the proportion of the ETF’s price movements that the movements in its benchmark index can explain. It indicates the degree of correlation between the ETF and its underlying index. Based on the given figures, the one-year R2 of 0.81% and the three-year R2 of 0.84% suggest a relatively high correlation between the SPSK ETF and its benchmark index over those respective periods. A higher R2 value implies that the SPSK ETF’s price movements closely track its underlying index’s movements. In this case, the movements in its benchmark index can explain approximately 81% (one year) and 84% (three-year) of the ETF’s price fluctuations. The effect of a high R2 value is that investors in the SPSK ETF can expect the fund’s performance to mirror the underlying index’s performance closely. This can be advantageous for investors who want to achieve results that align with the benchmark index.

Adjusted R-squared Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The SP Fund Dow Jones Global Sukuk ETF (SPSK) has a relatively high correlation with its benchmark index, as indicated by the one-year Adjusted R2 of 0.77% and the three-year Adjusted R2 of 0.83%. This implies that the ETF closely tracks the movements of its underlying index, providing investors with a fund that closely mirrors the benchmark’s performance. 

Value at Risk (VaR) Normal Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The Value at Risk (VaR) measures the potential loss an investment may experience within a given time frame and confidence level. Based on the provided figures, the one-year VaR Normal of -2.61% and the three-year VaR Normal of -2.03% suggest the estimated maximum potential loss of the SP Fund Dow Jones Global Sukuk ETF (SPSK) at a certain confidence level over those respective time periods. A negative VaR implies the estimated maximum loss of the investment. In this case, the negative VaR values indicate the potential downside risk of the SPSK ETF.

The effect of a higher negative VaR is that there is a greater potential for loss in the investment. However, it’s important to note that VaR is a statistical measure based on historical data and assumptions, and it does not guarantee the actual performance or losses of the ETF.

Value at Risk (VaR) normal ETL  SP Fund Dow Jones Global Sukuk ETF (SPSK):

The Value at Risk (VaR) ETL (Expected Tail Loss) is a risk measure that estimates the potential loss beyond the VaR level. It provides insight into the potential magnitude of extreme losses beyond a certain confidence level. Based on the provided figures, the one-year VaR Normal ETL of -3.26% and the three-year VaR Normal ETL of -2.5% suggest the estimated maximum potential losses beyond the VaR level for the SP Fund Dow Jones Global Sukuk ETF (SPSK) at a given confidence level over those respective time periods.

The negative VaR ETL values indicate the potential magnitude of extreme losses beyond the VaR level. These values suggest that there is a possibility of experiencing more significant losses in adverse market conditions or during extreme events.

Value at Risk (VaR) quantile Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The Value at Risk (VaR) Quantile is a risk measure that estimates the potential loss at a specific quantile or confidence level. It provides insight into the estimated maximum potential loss of an investment within a given time frame and confidence level. Based on the provided figures, the one-year VaR Quantile of -3.6% and the three-year VaR Quantile of -2.57% suggest the estimated maximum potential losses at a specific confidence level for the SP Fund Dow Jones Global Sukuk ETF (SPSK) over those respective periods. The negative VaR Quantile values indicate the potential maximum loss at the specified confidence level. These values suggest the potential downside risk of the SPSK ETF.

Relative Average Return Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The Relative Average Return measures the average return of the SP Fund Dow Jones Global Sukuk ETF (SPSK) relative to its benchmark index over a specific time period.

Based on the given figures, the one-year Relative Average Return of 0.12% and the three-year Relative Average Return of 0.14% suggest that the SPSK ETF has generated slightly positive returns relative to its benchmark index over those respective time periods.

A positive Relative Average Return indicates that the SPSK ETF has outperformed its benchmark index on average during the specified time frames.

The effect of a positive Relative Average Return means that investors in the SPSK ETF may have experienced slightly better returns compared to the benchmark index over the given time periods.

Average Return Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The Average Return measures the average performance of the SP Fund Dow Jones Global Sukuk ETF (SPSK) over a specific time period.

Based on the provided figures, the one-year Average Return of -0.05% and the three-year Average Return of -0.18% indicate that the SPSK ETF has experienced negative average returns over those respective time periods.

The negative Average Return suggests that, on average, the SPSK ETF has generated losses or lower returns compared to its starting value over the given time frames.

The effect of negative Average Returns means that investors in the SPSK ETF may have experienced a decline in their investment value or lower returns over the specified periods.

Average Loss Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The Average Loss measures the average magnitude of losses incurred by the SP Fund Dow Jones Global Sukuk ETF (SPSK) over a specific time period. Based on the provided figures, the one-year Average Loss of -0.6% and the three-year Average Loss of -0.5% indicate that, on average, the SPSK ETF has experienced losses over those respective time periods.

The negative Average Loss values suggest that the ETF has, on average, incurred losses or experienced a decline in value compared to its starting point over the given time frames.

The effect of negative Average Losses means that investors in the SPSK ETF may have experienced a decrease in their investment value or losses on average during the specified periods.

Max Gain Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The Max Gain measures the highest percentage of return achieved by the SP Fund Dow Jones Global Sukuk ETF (SPSK) over a specific time period.

Based on the provided figures, the one-year Max Gain of 2.4% and the three-year Max Gain of 2.4% indicate that, at its highest point, the SPSK ETF experienced a maximum gain of 2.4% over both the one-year and three-year time frames.

The positive Max Gain values suggest that investors in the SPSK ETF had the opportunity to achieve a maximum gain of 2.4% during the specified periods.

The effect of positive Max Gain means that investors had the potential to realize significant returns on their investment during the periods when the ETF experienced its highest point.

 Max Loss Conclusion SP Fund Dow Jones Global Sukuk ETF (SPSK):

The Max Loss measures the largest percentage of loss incurred by the SP Fund Dow Jones Global Sukuk ETF (SPSK) over a specific time period.

Based on the provided figures, the one-year Max Loss of -3.6% and the three-year Max Loss of -3.6% indicate that, at its lowest point, the SPSK ETF experienced a maximum loss of 3.6% over both the one-year and three-year time frames.

The negative Max Loss values suggest that investors in the SPSK ETF faced the potential for a maximum loss of 3.6% during the specified periods.

The effect of negative Max Loss means that investors could have experienced a significant decline in their investment value or losses at the ETF’s lowest point during those time frames.

Is SP Fund Dow Jones Global Sukuk ETF (SPSK)  regulated?

Yes, through being listed on the USA NYSE Arca Consolidated.