SP Funds S&P Global REIT Sharia ETF (SPRE) seeks to track a Sharia-compliant index of global real estate investment trusts, which measures the performance of publicly traded REITs worldwide that meet Islamic investment principles by excluding companies with excessive debt or involvement in prohibited activities like gambling or alcohol.
How It Works
SPRE uses a passively managed approach that tracks REITs from developed and emerging markets while applying Sharia screening criteria to exclude non-compliant properties and companies. The fund focuses on commercial real estate including office buildings, shopping centers, warehouses, and residential properties that generate rental income. Holdings are weighted by market capitalization and rebalanced periodically to maintain Sharia compliance and index alignment.
Key Features
- Only global REIT ETF combining Sharia compliance with international real estate exposure across multiple property sectors
- Provides 3.44% dividend yield from rental income while adhering to Islamic investment principles and debt restrictions
- Offers geographic diversification beyond U.S. REITs with exposure to developed and emerging market real estate
Risks
- This ETF can lose value when global real estate markets decline due to rising interest rates, economic downturns, or property market corrections
- Sharia screening requirements may limit investment opportunities and cause performance to diverge from broader global REIT markets significantly
- International exposure adds currency risk where foreign exchange fluctuations can reduce returns even when underlying properties perform well
Who Should Own This
Best suited as a satellite holding (5-15% of portfolio) for income-focused investors with medium risk tolerance seeking Sharia-compliant real estate exposure over 3+ year horizons. Appropriate for Muslim investors wanting global property diversification while adhering to Islamic investment principles, or investors seeking international REIT exposure with ethical screening.