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Why trade active ETFs? | AMAL

Why trade active ETFs

Innovation in investment is often associated with the creation of new exposures, new strategies and new asset classes – all of which are important in giving investors more choice in how they can construct a portfolio.

But equally importantly, there has been tremendous innovation in the way these investment ideas can be delivered to the investor. Over the last 20 years, ETFs (Exchange Traded Funds) have been the primary driving force that has created greater flexibility, easier market access and enhanced liquidity, growing to a $5 trillion industry in the process.

While ETFs have been commonly associated with index tracking / passive investment approaches, the power of the ETF wrapper is equally applicable to the active management space, combining the best characteristics of both worlds – high quality value adding active expertise and the transparency, liquidity, fungibility and trading optionality of an ETF.

By comparing the characteristics of ETFs and mutual funds in more detail, modern investors can understand the benefits of the wrapper of active ETFs.

  • ETFs are democratic: No matter whether the investor is a large institution with billions of dollars, or an individual with a few thousand dollars, when they buy an ETF they both get exactly the same product with the same features and same costs. There are no separate share classes or ‘institutional only’ categories that create an uneven playing field in terms of cost, information or features.   
  • ETFs are cost-effective: ETFs are typically priced competitively relative to an equivalent mutual fund exposure. This means more money stays with the investor to work for them     
  • ETFs are transparent: it’s important to know what you own and while most mutual funds only disclose their top 10 holdings on a delayed basis, ETFs typically publish a complete list of holdings and weights every day. This is especially important for investors with ESG concerns, who want to understand if the investments they choose align with their principles.     
  • ETFs are liquid: ETFs trade like shares on major stock exchanges – there is continuous two-way pricing provided by regulated market makers. This means that an investor can buy or sell an ETF at any time during the trading day at a ‘live’ price. This is in stark contrast to mutual funds which only trade once a day and typically at the previous day’s closing value. For investors who want to manage volatile markets, ETFs provide a more responsive tool.     
  • ETFs are easy to buy and sell: Investing in mutual funds often comes with a lot of paperwork and is a slow process. However, ETFs can be traded via any normal brokerage account as easily as a share, meaning it’s much simpler to buy, sell or dial exposures up and down to fine tune your portfolio     
  • ETFs offer trading optionality:  ETFs are designed to be flexible and there are many ways to trade them, depending on the investors’ needs. Examples include risk orders, limit orders, in-line volume orders, TWAP, VWAP, NAV and MOC. While these terms can be confusing, they offer the investor the ability to efficiently execute a trade depending on their size and market conditions. The key is to speak with the issuer’s capital markets desk who can advise on the best approach     
  • ETFs can be shorted and lent: ETFs can be posted as collateral and lent to the market for shorting, giving investors important new tools to help them better manage risk or derive additional sources of income.

These qualities are found in almost every UCITS ETF and bringing them to the active management space in the form of  active ETFs an important new milestone for investors and asset managers alike.

With the Almalia Sanlam Active Shariah Global Equity UCITS ETF, investors benefit from accessing an experienced active management team offering a high-quality strategy with the efficiencies, flexibility and democracy that are inherent to the ETF structure.

Risks of investing in ETFs

  • However, as with all investments you should be fully aware of the risks of trading ETFs: When you trade ETFs, your capital is fully at risk 
  • Past performance is no guarantee of future performance 
  • Exchange rate fluctuations can have both positive and negative effects on returns

For a detailed list of risks, please consult the prospectus.

Investing in The Almalia Sanlam Active Shariah Global Equity UCITS ETF

In October 2020 HANetf launched the Almalia Sanlam Active Shariah Equity UCITS ETF in partnership with Almalia and Sanlam Investments. This is the world’s first actively managed global equity ETF and is listed on the following European exchanges:

ETF EXCHANGE  ISIN  BB CODE  SEDOL   CURRENCY 
The Almalia Sanlam Active Shariah Global Equity UCITS ETF London Stock Exchange

IE00BMYMHS24

AMAL LN

BMDNKB0

USD
The Almalia Sanlam Active Shariah Global Equities UCITS ETF London Stock Exchange 

IE00BMYMHS24

AMAP.L

BMDNKC1

GBP
The Almalia Sanlam Active Shariah Global Equity UCITS ETF Borsa Italiana

IE00BMYMHS24

AMAL IM

BMWTXS7

EUR
The Almalia Sanlam Active Shariah Global Equity UCITS ETF Deutsche Boerse

IE00BMYMHS24

ASWE GY

BMWTXV0

EUR

 

Please note that as with all investments, trading ETFs carries risk.

About Almalia  

Almalia is a financial services group headquartered in the UK with a presence in the UAE. Almalia's core focus is providing innovation within Islamic finance, to create greater variety and global access to Shariah-compliant investment opportunities. This core focus is underpinned by two themes namely wealth creation and meaningful financial inclusion. www.almalia.com

About Sanlam  

Sanlam Limited is an international financial services group with a listing on the Johannesburg Stock Exchange and a market capitalisation of £10 billion. Established in 1918, the group provides a range of services to over 10 million clients globally, including insurance, financial planning, investments and wealth management. 

As part of the Sanlam group, Sanlam Investments UK has the backing of a business that has a 100-year heritage in financial services, giving us the confidence to take a long-term view.  Sanlam UK attained its size, strength and reputation by leveraging the benefits of having a large secure South African parent company while focusing on individual client service delivered locally in the UK.

  • Experience matters: As an active investment specialist, their experience informs how they navigate complex and evolving markets. Their fund managers bring decades of experience through all market conditions. Collectively, they bring a high conviction approach sharply into focus with the flexibility to do what they do best - identifying new investment ideas and opportunities.  
  • Boutique ethos: Their investment teams are autonomous – there is no central house view. This gives them the freedom to look for distinct investment ideas in their area of expertise. With no collective view and no rigid hierarchy, their teams follow their own distinctive approach across their respective asset classes. 
  • Client-first thinking: They are committed to helping clients find active, high conviction sources of return within a sustainable, risk-controlled framework. They value a client-first approach, and their differentiated reward structure ensures they remain fully aligned and responsive to investors’ evolving needs.

 For more information, please visit the Fund page.

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