Robo-adviser Wealthsimple launches investment portfolio for observant Muslims

“We now see a third of our clients in socially responsible portfolios. We realized there was an opportunity to create solutions for groups of people that were underserviced in the financial services industry — and in this case, with Muslims who hold certain religious beliefs and really don’t have options when it comes to investments.”

Katchen said there are only a handful of Islamic-compliant portfolio options available in Canada, some of which he said have “egregiously expensive” management expense ratio fees upward of more than 2.8 per cent as well as high account size minimums.

Wealthsimple’s Halal portfolio will have the same fee structure as its other core offerings, with 0.5 per cent on the first $100,000 invested and no account minimum.

Market size has also figured into its introduction of the portfolio, Katchen said.

With slightly more than one million Canadians identifying themselves as Muslim in the latest census, representing 3.2 per cent of the total population, “it’s important to us that we go after opportunities that represent growth,” he said.

Wealthsimple designed its Halal portfolio with global index provider MSCI, using a methodology approved by its committee of Shariah scholars.

The all-equity portfolio, which uses the same passive investment strategy as Wealthsimple’s other portfolios, is comprised of 50 stocks designed to maximize diversification and closely track the MSCI ACWI Islamic Index.

The stocks included in the portfolio are filtered using two processes. A business activity screen filters companies that are directly active in, or derive over five per cent of their revenue from, a prohibited Muslim activity such as alcohol, tobacco, gambling or pork production. A financial screen filters out companies that derive significant income from interest or have considerable leverage.

Katchen said Wealthsimple will continue to launch new products that introduce solutions for investors who are underserviced or improve upon offerings that are already in the market.

“If you look at our history, we generally try to lead with innovative new products and services a few times a year, so I think you can expect more stuff from us.”

— Follow @DaveHTO on Twitter.

David Hodges, The Canadian Press

Note to readers: This is a corrected story. An earlier version misspelled Katchen.

by Canadian Press

Robo-adviser Wealthsimple launches investment portfolio for observant Muslims

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