Shariah Bees ETF India: Review, Analysis & Details: Trade as per Shariah Principles

A lot of Indian Investors and traders were waiting for this product - a financial product that can allow traders and investors to trade or invest in Shariah compliant companies and based upon Shariah compliant indices. The Benchmark Asset Management Company, known for being the pioneer in introducing the Exchange Traded Funds or ETF products in the Indian Financial Markets, has once again been the front runner in offering an ETF or Exchange Traded Fund, which is compliant on Shariah laws and principles. The name of this ETF product is Shariah Bees.
This article discusses the Shariah Bees, its reviews and trading and investment strategy for Shariah Bees ETF or Exchange Traded Fund.

Shariah Bees Review Analysis & Details

This is a new ETF from Benchamark Asset Funds.
For those of you who are not familiar with ETF and the way an ETF works, it is recommended that you first read An example of Nifty 50 based ETF and Nifty Junior ETF with returns calculation. To broaden the horizon of your ETF understanding, you can also optionally go through Gold based ETF's See list of Gold Based ETF's available in India

Once you are clear about ETF working, let's focus on the Shariah Bees ETF which is the primary topic of this article.
So the Shariah Bees ETF focuses on offering investors and traders in India a financial product which is liquid enough to be traded like a stock on the stock exchange and also offers the benefit of spreading the risk across multiple stocks like a mutual fund tracking an index. The additional and unique thing that Shariah Bees ETF offers is that invests only in companies which are Shariah compliant - i.e. the companies whose business and revenue generation models are not against the laws of Shariah. The Shariah BeeS ETF will track the performance and invest your money in stocks of the companies covered under the NSE listed S&P CNX Shariah Nifty Index which is a free float market index. Although few days back, BSE also launched a similar Shariah Index called the BSE TASIS Shariah 50 Index: India's Shariah Index for Islamic Investments, there are no financial products tracking that index as of now.
To read more about Shariah compliant investments and their underlying principles, please see Islamic Mutual Funds: Sharia Mutual Funds

Basic Details about Shariah BeeS ETF:
This Shariah BeeS ETF will have its underlying index as the S&P CNX Shariah Nifty Index
It will have 1% annual expense ratio, Zero Entry Loan and Zero Exit Load
Shariah BeeS ETF will be traded on NSE or National Stock Exchange of India as well as BSE with NSE symbol as SHARIABEES and BSE symbol as 590109
Fund Manager for Shariah BeeS ETF is Mr. Vishal Jain

Thoughts and Recommendations about Shariah BeeS ETF
Shariah Bees ETF is the first Shariah compliant ETF product to be made available for trading in India. Being an ETF or Exchange Traded Fund, it offers the unique advantage of liquidity in terms of easy trading like a stock, and the benefit of a mutual fund, where your risk is spread across the basket of stocks. Being Shariah compliant, the investments will only be made in the companies which are as per the Islamic Shariah Laws and Principles.

Investors and Traders who are looking for a financial product for both short term trading as well as long term investments in Sharia Compliant stocks and indices can trade or invest through this ETF.

What are the risks of trading and investment in Shariah BeeS ETF?
The same risk as are with any other ETF.
Remember that the price of the ETF tracks the performance of the underlying index. The same will be true for this Shariah BeeS ETF. If the majority of the companies in the underlying index show negative performance, then the returns from this index will also go down.
Although there are minimum charges for trading in ETF, but that should also be considered as a cost.
And as we have observed recently in internation ETF markets, it is not necessary that the performance of underlying index is perfectly matched by the ETF. Here is an example of what's happening with Egypt Bsaed ETF - the ETF was seeing huge price fluctuation even though the underlying index was not changing as the stock market was closed due to political problems. And here is another example about how two ETF's - which track the same index - give different returns - ETF giving different returns - prices do matter
So its a matter of time, how your selected ETF and its underlying index, performs and what kind of returns does it offer