2024-01-22 08:53:01 ET
Summary
- SPUS tracks the S&P 500 Shariah Industry Exclusions Index. Fees are high at 0.45%, but it's been the top-performing ESG since its December 2019 launch.
- The primary reason is a screening and weighting process that favors high-valued Technology stocks. Debt is measured as a percentage of market capitalization, and securities are market-cap-weighted.
- This process allows semiconductor stocks like Nvidia and Broadcom, where competitors like HLAL, which measure debt as a percentage of total assets, exclude them.
- While SPUS's high concentration and 31x forward earnings valuation indicate it's risky, its selections have 19% free cash flow margins and should perform well in the long run.
- SPUS is a solid "hold" today, and a fundamental analysis with SPY, QQQ, and HLAL is below.
Investment Thesis
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SPUS: Shariah ESG ETF Powered By 46% Tech Beat The Market