Toronto-based Wealthsimple has launched its previously-announced Shariah-compliant exchange-traded fund (ETF) on the NEO Exchange.
This represents the first NEO-listed ETF by Wealthsimple. The NEO Exchange was founded in 2015 and claims to be the third most active marketplace in Canada, representing approximately 13 percent of all volume traded in Canadian-listed securities and almost 100 public listings. The Wealthsimple Shariah World Equity Index ETF marks NEO’s 100th fund listing.
“We applaud Wealthsimple for providing an investment product that addresses the under-serviced but important Islamic community.”
– Jos Schmitt, NEO
Wealthsimple’s new ETF was created to offer investors access to a diversified index of Shariah-compliant stocks. Wealthsimple first announced plans to launch this ETF in the fall as part of its latest push to offer more Halal financial products.
“We applaud Wealthsimple for providing an investment product that addresses the under-serviced but important Islamic community here in Canada, and are honoured to be their exchange of choice to bring this ETF to market,” said Jos Schmitt, president and CEO of NEO.
Mackenzie Investments, a subsidiary of Montréal-headquartered Power Corporation (which owns a stake in Wealthsimple), is the fund’s trustee, ETF manager, and portfolio manager.
Wealthsimple appears to be pushing deeper into Islamic finance at a time when several other companies sought to tap the growing sector. One such startup is Toronto-based Manzil, which calls itself “Canada’s first neo bank offering halal-certified products.” In November, Manzil’s CEO Mohamad Sawwaf called the launch of Wealthsimple’s ETF a “great step” towards building the Islamic finance space in Canada.
“Financial inclusion and exclusion are still very prevalent in Canada unfortunately,” Sawwaf told BetaKit recently. “[Wealthsimple’s ETF] is one step in the right direction to allowing a faith-based community that has financially excluded themselves from participating and adopting financial services due to their religious principles.”
“We hope that other financial institutions will look at this as an example of how Halal financial products can be created within the current legal, tax, and, regulatory frameworks without compromising on faith,” he added.
The launch of this ETF follows a string of major developments for Wealthsimple, most notably a $750 million fundraise. Following the raise, the company reported a post-money valuation of $5 billion.
Wealthsimple has also looked to aggressively expand its product suite over the last few years. In 2020, the company announced it would offer a cryptocurrency platform, providing users with commission-free trading of Bitcoin and Ethereum.
Wealthsimple has also expanded into peer-to-peer payments. In March, the company opened its new consumer payment app, Wealthsimple Cash, for users across Canada. The company expects to add new features to its Cash product in the coming months, including bill payments, digital direct deposits, pre-authorized debits, and ATM cash withdrawals.
“Our mission is to make financial products more affordable and accessible for everyone and we’re thrilled to do just that with the launch of Canada’s first Shariah-compliant ETF,” said Ben Reeves, chief investment officer of Wealthsimple. “Muslim investors in Canada will now have access to an affordable investment product that is in line with their values.”