Investing with Robo Investors – WealthSimple Halal Fund

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As-Salaam Alaykum dear readers,

I apologize, it’s been a while since I posted. I have been caught up with work but I wanted to dive into investing with Robo Investors and would like to look at good one being offered here in Canada; WealthSimple. Robo Investing is an investment strategy where you can invest automatically in a pre-packaged equity portfolio in easy way. You can transfer a lump sum or have it automatically pull a set amount from your savings account every month. This makes investing easy, but it is important to know how a robo investor is investing that money.

WealthSimple’s Halal Fund

WealthSimple’s Halal fund can be found here. Their fund holds 50 companies (equity) with a passive investment strategy and a recommended cash position to reduce risk. This portfolio does not hold interest bearing vehicles such a GICs and Bonds as they are prohibited. Let’s take a look at what is in the portfolio to ensure that it meets Islamic investing principles.

This is some of the companies in their current Halal portfolio:

• DuPont de Nemours Inc. – Products / Manufacturing
• Pfizer Inc. – Pharmaceuticals
• Pembina Pipeline Corporation – Energy
• CGI Inc (Class A) – Professional Services
• Koninklijke Philips N.V. – Products / Manufacturing
• Metro Inc. – Food Retailer
• Abbott Laboratories – Medical Devices
• BHP Group Limited – Resources
• Nutrien Ltd. – Resources
• Chevron Corp. – Energy
• Eni Spa – Energy
• Novartis AG – Pharmaceuticals
• Gildan Activewear Inc. – Manufacturing
• SNC – Lavalin Group Inc. – Construction
• Procter & Gamble Co. – Products / Manufacturing
• Alibaba Group Holding Ltd. – Products / Manufacturing
• Danaher Corp. – Science and Technology
• Canadian National Railway Co. – Transportation
• BP plc – Energy
• and many more……..

As you can see, there is a diversified portfolio of publicly traded companies across industries such as energy, products / manufacturing and pharmaceuticals among others.

The key here being is that all investments are in industries that do not deal primarily in interest, sin stocks (marijuana, alcohol, pornography, gambling), pork, weapons manufacturing or other prohibited activities. It’s also important to note that these companies should not profit off of or have excessive debt (33% of debt less than total assets) to be shariah compliant.

WealthSimple’s Investing Fees

WealthSimple states that their fees are structured in the following way:

We charge the same fees as for our halal portfolio as we do for our regular and socially responsible portfolios: nothing on the first $5,000 for a year, 0.5% up to $100,000, and 0.4% over $100,000. Plus, you get an additional $10,000 managed free for every friend you refer to Wealthsimple!

This means that if you are investing $200,000 your fees would be:

• Annual fees on returns for first $100,000 (0.5%) = $500
• Annual fees on returns for next $100,000 (0.4%) = $400
• Total fees are $900 on the $200,000 investment taken from any profits gained for the year.

For robo investing, a 0.5% fee is typical of other low-fee investors in the market. Robo investors are always looking for more customers, so they offer incentives to refer friends/family to invest.

Robo investing is a great way to get into shariah-compliant investments, and depending on the country you live in there are different options; so do some searching to see what is available and what their fees look like.

I hope this post on robo investors was interesting and insightful! As usual, I would love to here any comments, feedback or suggestions on new topics on the Muslim Financial Independence Blog or on my twitter @muslimfinancial. See you all soon!

As-Salaam Alaykum