eToro, a prominent online broker, has teamed up with Arabesque AI, an investment advisory and technology firm, to introduce a new Sharia-compliant portfolio in UAE to offer tailored solutions to Middle Eastern users. The portfolio, named ShariaAI-Growth, utilises Arabesque’s advanced AI technology and extensive ESG (environmental, social, and governance).
eToro has partnered with Arabesque AI to launch ShariaAI-Growth, a Sharia-compliant investment portfolio for users in the Middle East. The portfolio uses Arabesque’s AI technology and ESG data to identify high-growth US stocks that adhere to Sharia principles. This initiative responds to regional investor preferences.
The portfolio includes up to 40 US equities, selected based on market cap, trading volume, and compliance with Sharia standards set by AAOIFI. Stocks are further evaluated for expected returns, earnings growth, and ESG scores. The portfolio is rebalanced quarterly, with investments starting from US$500. Investors can track performance using eToro’s tools and social feed for updates.
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Here is what traders can expect after the launch of the new portfolio.
Launching the ShariaAI-Growth portfolio offers traders in the Middle East access to a Sharia-compliant investment option. It also combines high-growth potential with adherence to Islamic financial principles. This portfolio allows traders to invest in a carefully selected range of US equities that meet stringent Sharia standards while considering ESG factors.
Traders will benefit from the integration of Arabesque’s AI technology, which utilises extensive ESG data to identify stocks with high growth potential and strong ESG scores. This advanced technology ensures that investments are compliant with Sharia principles.
Historically, Sharia-compliant investments have demonstrated competitive returns. For example, the S&P 500 Shariah Index has outperformed the standard S&P 500 Index over the past decade. This suggests that traders can expect solid long-term performance from the ShariaAI-Growth portfolio, achieving returns comparable to or even better than conventional investment options.
The Sharia screening process adheres to AAOIFI Shari’ah Standard No. (21). The portfolio’s selection process includes market cap and trading volume criteria, business activity and financial ratio screens, and AI evaluation. This ensures that only the most suitable stocks are included. This rigorous process gives traders confidence in the quality and compliance of their investments.
With a starting investment of just US$500, the ShariaAI-Growth portfolio is accessible to many traders. Additionally, eToro offers tools and charts. They help monitor portfolio performance and a social feed to inform investors about sector developments and portfolio updates.
eToro is a global social trading and multi-asset brokerage company that focuses on providing financial and copy trading services. Founded in 2007, eToro has grown to become one of the world’s most popular and innovative trading platforms. eToro offers a wide range of financial instruments, including Stocks, Cryptocurrencies, Commodities, Forex, ETFs, Indices, etc. The company also offers a social trading platform, which allows users to interact, share trading strategies, and follow the trades of more experienced traders.
Arabesque is a pioneer in integrating Environmental, Social, and Governance (ESG) criteria with artificial intelligence (AI) to offer sustainable and transparent financial solutions. Established in 2013 following a management buyout from Barclays Bank, Arabesque has positioned itself at the intersection of modern finance’s two major disruptors: ESG and AI.
eToro’s collaboration with Arabesque AI to launch the ShariaAI-Growth portfolio marks a significant advancement in offering tailored investment solutions for the Middle Eastern market. By leveraging cutting-edge AI technology and comprehensive ESG data, the portfolio aims to meet the growing demand for Sharia-compliant investments. The company is well-positioned to attract a broader base of investors seeking ethical and high-growth investment opportunities.
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