Wahed Invest - Detailed Review
Finance Tools
Wahed Invest - Product Overview
Wahed Invest Overview
Wahed Invest is a financial technology company that specializes in automated Islamic investment platforms, making it a unique player in the finance tools category.Primary Function
Wahed Invest’s primary function is to provide ethical investment services that align with Islamic principles. The platform uses advanced algorithms and real-time software to manage portfolios, ensuring that all investments are Sharia-compliant. This involves screening potential investments to exclude companies involved in activities such as liquor, tobacco, gambling, and usury.Target Audience
The target audience for Wahed Invest includes Muslims seeking to invest in a way that adheres to their religious beliefs, as well as anyone interested in ethical and socially responsible investing. With over 1.8 billion Muslims globally, Wahed aims to serve this significant demographic, particularly in heavily populated Muslim countries like Indonesia, Malaysia, and Nigeria.Key Features
Automated Investment Management
Wahed Invest is the world’s first automated Islamic investment platform. It uses modern portfolio theory to optimize investments, ensuring the best possible returns with minimal risk. The platform is fully digital, allowing users to open an account online in minutes and access global markets efficiently.Sharia-Compliant Investments
All investments are scrutinized by a Shariah supervisory board to ensure compliance with Islamic financial principles. This means that the platform avoids investments in companies that provide conventional financial services, manufacture or sell prohibited products (like liquor, tobacco, or firearms), or have excessive debt ratios.Low Minimum Investment
Unlike traditional wealth management firms, Wahed Invest has a relatively low minimum investment requirement of $100, making it accessible to smaller investors. There are no lock-in periods, allowing investors to make deposits and request redemptions at any time.Global Availability
Wahed operates in over 130 countries and has offices in New York, Washington D.C., London, and Dubai. It is regulated by various financial authorities, including the SEC in the USA, FCA in the UK, and others in India, Indonesia, and more.Additional Products
In addition to its investment platform, Wahed has launched other financial products, such as the Wahed FTSE USA Shariah ETF (HLAL) and a Halal Stock Screener mobile app. The company is also planning to launch an ethical neobank to integrate banking and investing services into a single “super-app”.Conclusion
Overall, Wahed Invest offers a unique blend of technological innovation and ethical investing, making it an attractive option for those seeking to align their financial activities with their values. Wahed Invest - User Interface and Experience
User Interface Overview
The user interface of Wahed Invest is designed to be simple, intuitive, and user-friendly, making it accessible to a wide range of investors, especially those new to investing.
Ease of Use
- The app allows users to set up and open a halal investment account quickly, often in just a few minutes from their mobile device.
- The interface is straightforward and easy to use, with features such as direct deposit and the ability to build individual investment portfolios. Users can create multiple portfolios, each with its own targets and risk factors.
Key Features
- Users can automate their investments with features like automatic recurring deposits and a smart deposit function that calculates the amount needed to reach specific targets.
- The app integrates with Plaid, allowing users to securely connect their bank accounts and transfer money easily into their Wahed accounts.
- The risk assessment questionnaire helps in recommending portfolios based on the user’s risk profile, making the investment process hassle-free.
Customization and Control
- Users have the flexibility to customize their portfolios with different names and risk levels, allowing them to save for specific goals. This personalization helps in visualizing progress towards these goals.
- The app supports tax-advantaged accounts and allows users to manage these alongside their portfolios, all from their mobile device.
Ethical Investing
- Wahed Invest is committed to ethical investing, ensuring that all investments are halal and compliant with Shariah standards. Investments are screened to exclude sectors like gambling, firearms, tobacco, and alcohol.
User Experience
- The overall user experience is enhanced by the seamless integration of various financial services. Users can monitor their performance and make deposits or withdrawals at any time.
- The app also includes security features like Face ID and Touch ID for convenient and secure login.
Feedback and Support
- Users have generally positive feedback about the app’s simplicity and functionality. However, some users have requested additional features, such as a web version of the app and more investment options outside of stocks.
Conclusion
In summary, Wahed Invest offers a user-friendly interface that is easy to set up and use, providing a hassle-free experience for investors looking for ethical and halal investment options.
Wahed Invest - Key Features and Functionality
Wahed Invest Overview
Wahed Invest, an Islamic investment platform, offers several key features and functionalities that leverage AI and modern financial technologies to simplify and enhance investment experiences. Here are the main features and how they work:
Account Opening and Risk Assessment
To open an account with Wahed, users complete a risk assessment questionnaire. This questionnaire helps the platform recommend an optimal portfolio based on the user’s risk tolerance and financial goals. Once the user is satisfied with the recommended portfolio, they proceed to complete the registration forms and transfer funds into their Wahed account.
Portfolio Management
Wahed uses advanced digital platforms and financial algorithms derived from Modern Portfolio Theory to manage investments. These algorithms create and manage diversified portfolios consisting of stocks, gold, and sukuk, ensuring that the investments are aligned with Islamic finance principles. The portfolios are globally diversified, which helps in mitigating risks and optimizing returns.
Investment Options
Wahed Invest offers a fixed set of investments across all risk profiles, which includes Malaysian stocks, US stocks, sukuk, and gold. This simplicity makes it easier for users to understand their holdings without needing extensive research. The sukuk portion, for example, is invested in the RHB Islamic Bond Fund, ensuring compliance with Shariah principles.
Multiple Portfolios
Users have the option to create more than one portfolio, which is useful for those saving towards different financial goals. However, it’s important to note that having more than one portfolio incurs a minimum monthly fee of RM2.50 (or RM30 annually), which can be significant if the total investment is below RM4,000.
AI Integration
Wahed Invest utilizes Artificial Intelligence (AI) to analyze stock prices, stability, and future price forecasts. AI helps in monitoring stock and bond price trends according to the financial goals and personal portfolio of the investors. This technology enables faster and more precise investment decisions, assists in customer inquiries, and enhances overall investment performance. AI also facilitates automated portfolio management, making it accessible and efficient for a broader range of investors.
User-Friendly Interface
The platform has undergone updates to improve its user interface, making it more intuitive and user-friendly. The new layout is designed to be easy to navigate, allowing users to manage their investments with ease.
Accessibility and Inclusion
Wahed aims to make ethical and Islamic investing accessible to a wider audience, particularly those in lower socio-economic demographics. With a lower minimum investment requirement (initially USD 7,500, though this may vary), the platform is more inclusive than traditional investment options. The recent funding of US$50 million will also support the launch of an ethical neobank, further integrating banking and investing services into one super-app.
These features collectively make Wahed Invest a streamlined and accessible platform for those looking to invest in a way that aligns with Islamic finance principles, leveraging AI to enhance investment decisions and management.
Wahed Invest - Performance and Accuracy
Evaluating the Performance and Accuracy of Wahed Invest
Performance
Wahed Invest has demonstrated some notable performance metrics. According to Morningstar, Wahed’s five-year success ratio stands at 100%, indicating that all of its products have outperformed their respective category medians. The firm has an average overall Morningstar Rating of 5.0 stars across its open-end and exchange-traded products, showcasing its ability to deploy capital successfully for investors. However, there are some concerns regarding the experience of the management team. The average asset-weighted tenure of Wahed’s managers is only about five years, which is relatively short compared to other firms. This raises some doubts about their ability to manage capital effectively through a full market cycle.Accuracy and Transparency
In terms of accuracy and transparency, Wahed Invest has faced some issues. The SEC has noted that Wahed violated the Marketing Rule by disseminating advertisements that included endorsements from professional athletes without proper disclosures. These endorsements did not reveal that the athletes were not current clients and that they received compensation for their endorsements. Additionally, Wahed presented hypothetical, backtested performance without ensuring it was relevant to the intended audience’s financial situation and investment objectives.User Experience and Data Accuracy
Users have reported mixed experiences with Wahed’s platform. While the platform is generally helpful for Muslims starting to invest in the stock market, there are issues with customer service and user interface. Some users have experienced delays in getting responses to their queries, and the platform lacks certain features, such as consolidated tax information, which can lead to manual calculations and potential financial penalties. Although Wahed has addressed some of these gaps, such as adding consolidated tax information, more work is needed to improve the user experience.Portfolio Diversification
Another area of concern is the diversification of Wahed’s investment portfolios. Despite offering various indexes, the portfolios tend to be heavily concentrated in the technology sector, particularly in companies like Microsoft. This overexposure can lead to significant losses if the tech sector experiences a downturn, highlighting the need for better diversification strategies.Accessibility
Wahed Invest has also faced challenges in terms of accessibility for international investors. While the platform is well-catered for investors in the UK, USA, and Malaysia, it is less accessible for investors in other regions, such as the Middle East. This limited accessibility can be frustrating for potential users in these areas.Conclusion
In summary, while Wahed Invest has shown strong performance metrics and has been innovative in offering Shariah-compliant investment options, it needs to improve in areas such as transparency, user experience, portfolio diversification, and accessibility for a broader range of investors. Addressing these limitations will be crucial for enhancing the overall quality and reliability of the platform. Wahed Invest - Pricing and Plans
Wahed Invest Overview
Wahed Invest, an Islamic robo-advisor, has a straightforward and transparent pricing structure, which has undergone some changes, particularly for UK investors. Here’s a breakdown of their current pricing and plans:Fee Structure for UK Investors
As of June 2021, the fee structure for UK investors has been updated as follows:Monthly and Annual Fees
- For account balances up to £10,000, there is a flat monthly fee of £2.99.
- For account balances greater than £10,000, the annual management and custody fee is 0.49%.
Fee Summary Table
| Account Balance | Old Fee (0.99%) | New Fee (£2.99 pm) | Change | Effective Fee % |
|---|---|---|---|---|
| £10,000 | £99.00 | £35.88 | -£63.12 | 0.36% |
| £9,000 | £89.10 | £35.88 | -£53.22 | 0.40% |
| £8,000 | £79.20 | £35.88 | -£43.32 | 0.45% |
| £7,000 | £69.30 | £35.88 | -£33.42 | 0.51% |
| £6,000 | £59.40 | £35.88 | -£23.52 | 0.60% |
| £5,000 | £49.50 | £35.88 | -£13.62 | 0.72% |
| £4,000 | £39.60 | £35.88 | -£3.72 | 0.90% |
| £3,600 | £35.64 | £35.88 | £0.24 | 1.00% |
Fee Structure for Non-UK Investors
For investors outside the UK, the fee structure remains as follows:Annual Fees
- For account balances between $100 and $99,999, the annual fee is 0.79%.
- For account balances of $100,000 and above, the annual fee is 0.49%.
Features and Plans
Wahed Invest offers several key features across all its plans:- Sharia-Compliant Investing: Investments are aligned with Islamic financial principles, avoiding companies involved in gambling, liquor, tobacco, and other non-compliant activities.
- Automatic Rebalancing: Portfolios are automatically rebalanced to maintain the chosen asset allocation, eliminating the need for manual adjustments.
- Broad Market ETFs: Investments are made in broad market ETFs, allowing a diversified portfolio similar to a Boglehead approach.
- No Trading or Rebalancing Fees: There are no additional fees for trades or rebalancing, and no hidden fees.
- Multiple Asset Classes: Investors can choose from various asset classes including global equity, emerging markets equity, U.S. equity, REITs, commodities, and fixed income.
- Customized Portfolios: Investors can select a custom asset allocation from equities, sukuk, and gold.
- Tax-Free Savings: In the UK, investors can use a Stocks and Shares Individual Savings Account (ISA) to save or invest tax-free.
Free Options
There are no completely free options for investing with Wahed Invest, as all accounts incur management and custody fees based on the balance and location of the investor. However, the fees are structured to be competitive and transparent, with no additional charges for trading or rebalancing. Wahed Invest - Integration and Compatibility
Wahed Invest Overview
Wahed Invest, an Islamic robo-advisor, offers several integration and compatibility features that make it convenient for users to manage their investments across different platforms and devices.
Integration with Mint.com
One of the notable integrations is with Mint.com, a popular personal finance management tool. Users can link their Wahed account to Mint.com through their custodian partner, Apex Clearing. Here’s how it works:
- Log into your Mint.com account.
- Click on “Add Accounts” and search for “Apex Clearing.”
- Follow the prompts to link your Apex Clearing account, using your Apex user ID and password.
Mobile and Web Compatibility
Wahed Invest is highly mobile-focused, with a user-friendly app available for both iOS and Android devices. The app allows users to open an account, complete risk assessments, view and manage their portfolios, and perform transactions such as adding or withdrawing funds. The platform also has a web version, although it primarily directs users to download the app for a more seamless experience.
Account Management Across Devices
Users can access and manage their Wahed accounts from any device with an internet connection. The app and web platform are designed to be user-friendly, allowing users to monitor their portfolio performance, download monthly statements, and adjust their portfolio allocations easily.
Transaction and Statement Access
All transactions and account statements can be viewed through the Wahed app. Users can log in to see every transaction that has taken place on their account, and they can also download monthly statements for detailed records.
Compatibility with Retirement Accounts
Wahed Invest supports various types of accounts, including Individual accounts, Traditional IRAs, Roth IRAs, and SEP IRAs. This allows users to manage their retirement savings in a Shariah-compliant manner, which is a unique feature of the platform.
Conclusion
In summary, Wahed Invest integrates well with other financial tools like Mint.com and offers a seamless user experience across both mobile and web platforms. This makes it easy for users to manage their investments efficiently and ethically.
Wahed Invest - Customer Support and Resources
Customer Support
Contact Information
Complaint Resolution
FAQs and Help Center
Account Management
Educational Resources
Account Updates and Notifications
By leveraging these support options and resources, users of Wahed Invest can effectively manage their accounts, resolve issues, and stay informed about their investments.
Wahed Invest - Pros and Cons
Pros of Wahed Invest
User-Friendly Interface and Functionality
Wahed Invest is praised for its simple and straightforward user interface, making it easy for both beginners and experienced investors to manage their portfolios. The app allows users to create multiple portfolios, which is a feature that many users have been waiting for.
Shariah-Compliant Investing
One of the standout features of Wahed Invest is its adherence to Islamic financial principles, offering Shariah-compliant investment options. This makes it an excellent choice for Muslim investors who want to ensure their investments align with their faith. The platform avoids industries such as alcohol, tobacco, gambling, adult entertainment, and weaponry.
Diversified Portfolios
Wahed Invest provides diversified portfolios that include a fixed set of investments such as Malaysian stocks, US stocks, Sukuk, and gold. This diversification helps in managing risk and ensures that investors have a balanced portfolio regardless of their risk profile.
Low Minimum Investment
Users can start investing with as little as USD 100, making it accessible to a wide range of investors. The platform also offers affordable management fees compared to traditional investment services.
Broad Market ETFs
Wahed Invest uses broad market ETFs, allowing investors to adopt a passive investment strategy similar to the Boglehead approach. This involves investing in a wide range of stocks rather than focusing on a few specific companies or sectors.
Cons of Wahed Invest
Fees and Expense Ratios
While the expense ratios for Wahed Invest’s ETFs are relatively low at 0.5%, the platform also charges an annual management fee ranging from 0.3% to 0.79%. These fees can add up over time, especially in bear markets where investments may be in the negative.
Minimum Monthly Fee for Multiple Portfolios
If you have more than one portfolio with Wahed Invest, there is a minimum monthly fee of RM2.50 (or RM30 a year). This can be significant if you have a small investment amount, making it advisable to stick to a single portfolio unless you have over RM4,000 invested.
Limited Customization and High Tech Sector Weighting
Some users have noted that the portfolios can be heavily weighted towards the tech sector, which may not provide the desired diversification. For example, the HLAL ETF is heavily weighted on Apple, which can be a concern if Apple’s stock performance fluctuates significantly.
User Interface Issues
There have been some criticisms regarding the user interface, particularly in terms of tracking investments over specific periods. Users have reported difficulties in getting consolidated tax information and viewing investment details between specific dates, which can be time-consuming and may lead to financial penalties.
Higher Fees for In-House Index Funds
Wahed Invest’s fees for its own index funds are not lower than those for other indexes on the platform, which can seem counterintuitive since hosting these funds in-house should reduce costs.
By considering these pros and cons, potential investors can make a more informed decision about whether Wahed Invest aligns with their investment goals and preferences.
Wahed Invest - Comparison with Competitors
Unique Features of Wahed Invest
- Wahed Invest is an online platform that specializes in halal investing, ensuring all investments are structured in accordance with strict Islamic principles. This includes certifications to guarantee compliance.
- The platform offers a low minimum investment requirement, a high-speed digital experience, and the flexibility to withdraw funds at any time.
- Wahed Invest provides a user-friendly interface and a range of investment options that are managed in line with Islamic finance principles.
Competitors and Alternatives
Aghaz
- Aghaz is another financial services company that focuses on halal investing and values-based investment management. Like Wahed, it offers automated investment management services, but it may have different investment strategies and fees.
Abyan Capital
- Abyan Capital provides automated and Sharia-compliant investment solutions. It offers an automated investment platform similar to Wahed, but the specific investment products and fees might vary.
Thndr
- Thndr operates a digital investment platform that offers tools and resources for investing, but it is not specifically focused on Sharia-compliant investments. However, it provides a mobile application with various investment tools, which could be an alternative for those looking for a broader range of investment options.
StashAway
- StashAway is a smart investment platform that offers expert-managed and customized investment plans, but it is not specifically Sharia-compliant. It caters to a wider audience and offers a range of investment products that may not align with Islamic finance principles.
Kestrl
- Kestrl is a financial technology company that provides financial services in line with Islamic principles. It offers a mobile application with features like budgeting, saving, and a halal stock screener, making it a direct competitor to Wahed in terms of Sharia-compliant services.
Amal Invest
- Amal Invest filters popular investment funds to ensure they comply with Islamic principles. While it shares the focus on Sharia-compliant investments, its approach to filtering existing funds might differ from Wahed’s managed investment portfolios.
Key Differences
- Sharia Compliance: All of these platforms, including Wahed, Aghaz, Abyan Capital, Kestrl, and Amal Invest, focus on Sharia-compliant investments. However, the specific methods and certifications can vary.
- Investment Products: Wahed and its competitors offer different types of investment products. For example, Thndr and StashAway provide a broader range of investment options that may not be Sharia-compliant, while Kestrl and Amal Invest focus strictly on halal investments.
- User Interface and Features: Each platform has its own unique user interface and set of features. Wahed is known for its simplicity and low minimum investment requirements, while Kestrl offers additional features like budgeting and a halal stock screener.
Conclusion
Wahed Invest stands out for its strict adherence to Islamic finance principles and its user-friendly, accessible investment platform. However, potential investors should consider the specific features, fees, and investment strategies of each competitor to find the best fit for their needs. If you are looking for a platform that is strictly Sharia-compliant and easy to use, Wahed Invest is a strong option. If you need additional features or different investment strategies, alternatives like Aghaz, Abyan Capital, Kestrl, or Amal Invest might be more suitable.
Wahed Invest - Frequently Asked Questions
Frequently Asked Questions about Wahed Invest
What is Wahed Invest?
Wahed Invest is a discretionary portfolio manager that provides an efficient and ethical investment platform. It allows investors to invest their savings ethically and efficiently through a digital platform, making global markets accessible to everyone.
How do I open an account with Wahed Invest?
Opening an account with Wahed Invest is straightforward. You start by completing a risk assessment questionnaire, which helps Wahed recommend an optimal portfolio based on your answers. If you are satisfied with the recommended portfolio, you proceed to complete the registration forms and transfer funds into your Wahed account. The funds will then be invested according to your chosen portfolio.
What is the minimum investment required to start investing with Wahed Invest?
The minimum investment required to activate your account and start investing with Wahed Invest is £50. This low threshold is intended to make the service accessible to everyone.
Who can open an account with Wahed Invest?
To open an account, you must be at least 18 years old, have a valid address, and a bank account to transfer funds. You also need to be a tax resident and have a National Insurance number if you are in the UK. Currently, U.S. citizens are not eligible to open an account through the UK website.
How are my investments managed and optimized?
Wahed uses financial algorithms derived from Modern Portfolio Theory to create and manage your portfolio. Your risk profile is evaluated through a few basic questions about your investment goals, liquidity needs, and time horizon. Based on this information, Wahed recommends a portfolio with an optimized combination of securities that may provide the highest potential return subject to your risk appetite. Your portfolio is periodically rebalanced at no additional cost.
Are there any fees associated with using Wahed Invest?
Yes, there are fees associated with using Wahed Invest. The fees include a Wrap Fee that covers all management, custodian, and transaction fees. For UK accounts, the annual fee is £2.99 per month for balances up to £10,000, and 0.49% per annum for balances greater than £10,000. Fees are charged monthly and taken directly from your Wahed account.
Can I withdraw funds from my Wahed Invest account at any time?
Yes, you can request to close your Wahed account or withdraw funds at any time. There are no account closure charges or penalties for withdrawing your money. However, you can only withdraw funds to an account that bears your name.
How are gains or losses calculated on my investments?
Gains or losses are calculated using the First In First Out (FIFO) method. This means that when you sell shares, the oldest shares purchased are considered sold first. Your gains or losses are reflected daily in your account.
Do I receive dividends from my investments?
Some of the funds and investments in your portfolios may pay out dividends. The frequency of dividend disbursement depends on each fund’s policies. Any dividends received are automatically reinvested into your Wahed account.
Can I choose to buy or sell individual investments within my portfolio?
Wahed Invest is a discretionary management service, meaning investment decisions are made by the investment managers. You do not have the option to buy or sell individual investments within your portfolio.
Is my account performance compared to a benchmark?
Yes, Wahed uses the Consumer Price Index (CPI) as a benchmark to compare your account performance. This information will be available on their website soon.
Wahed Invest - Conclusion and Recommendation
Final Assessment of Wahed Invest
Wahed Invest is a significant player in the Islamic finance and ethical investing space, offering a range of Shariah-compliant financial products that align with the values of Muslim investors, though it is open to everyone.
Key Benefits
- Shariah Compliance: Wahed Invest ensures all investments are free from interest (riba) and other prohibited activities, making it an ideal choice for Muslims seeking to invest in accordance with their faith.
- Diversified Portfolios: The platform uses Modern Portfolio Theory to construct diversified portfolios across multiple asset classes, including Sukuk (Islamic bonds) and commodities. This approach helps maximize the expected net-of-fee return for each level of portfolio risk.
- Low Fees: Wahed Invest boasts lower fees compared to the industry average, with no trading fees or commissions. The annual fee is 0.99% for balances up to £249,000 and 0.49% for balances above £249,000.
- Accessibility: The platform is user-friendly, making it easy for investors to start and manage their investments. It also offers automatic handling of dividends, reinvestments, and portfolio rebalancing.
Who Would Benefit Most
Wahed Invest is particularly beneficial for:
- Muslim Investors: Those who want to ensure their investments comply with Islamic principles will find Wahed Invest a reliable and ethical option.
- Ethically Conscious Investors: Individuals who prioritize ethical and socially responsible investing will appreciate the exclusion of industries like tobacco, alcohol, and firearms from the investment portfolios.
- New and Experienced Investors: The platform’s simplicity and lack of trading fees make it accessible to both new investors and those with more experience.
Overall Recommendation
Wahed Invest is a solid choice for anyone looking for Shariah-compliant or ethically aligned investment options. Here are some key points to consider:
- Financial Inclusion: Wahed Invest aims to bridge the wealth gap by providing accessible financial services to a demographic that has been underserved in the past.
- Market Efficiency: The platform offers competitive financial products that are market-efficient and aligned with ESG principles.
- Global Reach: With operations in several countries, including the UK, Malaysia, and the UAE, Wahed Invest caters to a broad audience.
In summary, if you are seeking an investment platform that combines ethical investing with low fees and diversified portfolios, Wahed Invest is definitely worth considering. Its commitment to Shariah compliance and ethical principles makes it a unique and valuable option in the finance tools category.