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help differentiating one Shariah ETF from another

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asked Jul 30, 2018 03:22 PM by
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updated Jul 30, 2018 03:23 PM by
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Greetings, I need help differentiating one ETF from another. Kindly note I am new to all of this :)

iShares MSCI World Islamic UCITS ETF USD (Dist) (GBP) | ISWD LSE

iShares MSCI World Islamic UCITS ETF USD (Dist) (USD) | ISWD XSWX

Of course, the trading stock exchange & the currency are different but does this justify the massive difference in a share price? USD 33 to GBX 2564?!

It is the same company tracking the same index / benchmark but tighter tracking on the LSE one!

What gives? Also If I have say 50K USD to invest which one would make more sense in 5-10 years in a buy & hold mentality?

I live in the MENA & wish to invest in an ETF priced in USD. No Tax concerns & I am not holding any of the nationalities these ETFs trades in its stock exchanges.

Same thing happens again here:

iShares MSCI USA Islamic UCITS ETF USD (Dist) (GBP) | ISUS LSE

iShares MSCI USA Islamic UCITS ETF USD (Dist) (USD) | ISUS XSWX

Thank you in advance for your time & efforts.

Sam

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answered Aug 15, 2018 11:50 AM by
Jin Won Choi gravatar image Administrator

Hi samerjb, sorry for the late reply. I'm on holiday so I haven't been checking the Q&A section.

It looks like the LSE price you mentioned is for 100 units of the ETF. ETFs have mechanisms that force the price back to its net asset value, so it would extremely unusual for the ETF price to be off by a significant amount. I'm pretty sure this is correct, but I would talk to a broker if you want to be 100% sure. Note that the ETF is managed by BlackRock, which is a very reputable firm. I would be indifferent between buying US or UK versions of the ETF from a strictly investing point of view (but can't comment on tax consequences).

Hope that helps,

Jin

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answered Aug 04, 2018 01:47 AM by
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Greetings again :)

Well, this kept intriguing me even further for the bid ask spread was wider on the higher price ETFs traded in LSE. My best guess is the constant bid stream kept on pushing the price even further.

The only reason people wish to buy the one traded in LSE is probably a herd mentality. UK has lots of Muslims wanting Shariah compliant ETF in GBP. Either they were recommending this to each other or a lot of people are trading them for quick profits.

I am still open to suggestions on why is this happening.

The other question still stands if you care to answer:

"Also If I have say 50K USD to invest which one would make more sense in 5-10 years in a buy & hold mentality?"

Thank you in advance for your time & efforts.

Sam

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Asked: Jul 30, 2018 03:22 PM

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Last updated: Aug 15

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