US Stocks (Wahed FTSE USA Shariah ETF)

Wahed will invest 97.5% of the assets in your portfolio into Wahed FTSE USA Shariah ETF (HLAL), a Nasdaq listed ETF managed by our affiliate company, Wahed Invest LLC (“Wahed Invest”) using a “passive management” (or indexing) approach to seek to track the total return performance, before fees and expenses, of the FTSE USA Shariah Index. The Index is composed of common stocks of large and mid-capitalization U.S. companies the characteristics of which meet the requirements of the Shariah and are consistent with Islamic principles as interpreted by subject-matter experts. Past performance is not a guarantee of future results and as with all investments, HLAL includes some risk, including the possibility of loss of principal. Investors are advised to read and understand HLAL’s Prospectus and statement of additional information (“SAI”) for more information on HLAL and to carefully consider the investment objectives, risks, charges, and expenses in relation to HLAL. All the aforementioned documents may be found at HLAL’s website, funds.wahedinvest.com.

We have summarized certain risk factors for your consideration. However, you are advised to read and understand the prospectus and statement of additional information of HLAL.

Principal Investment Risks

• Equity Market Risk - The equity securities held in the fund’s portfolio may experience sudden, unpredictable drops in value or long periods of decline in value because of factors that affect securities markets generally or specific issuers, sectors or companies that the fund invests in.

• ETF Risks - the fund is an exchange traded fund (“ETF”) and as a result of an ETF’s structure, it is exposed to the following risks:

  • Authorized Participants, Market Makers and Liquidity Providers Concentration Risk
  • Costs of Buying and Selling Shares
  • Shares May Trade and Prices Other Than NAV
  • Trading

• Market Capitalization Risk

  • Large-Capitalization Investing - The securities of large-capitalization companies may be relatively more mature compared to smaller companies and therefore subject to slower growth during times of economic expansion and may also be unable to respond quickly to new competitive challenges.
  • Mid-Capitalization Investing - The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies.

• Market Risk - The trading process of equity securities and other instruments fluctuate in response to a variety of factors. As a result, an investor could lose money over short or long periods of time.

• Non-Diversification Risk - Because the fund is “non-diversified”, it may invest a greater percentage of its assets in the securities on a single issuer or a small number of issuers than if it was a diversified fund. This may increase the fund’s volatility and have a greater impact on the fund’s performance.

• Passive Investment Risk - The fund is not actively managed and the Adviser would not sell shares of an equity security due to current or projected underperformance of a security, industry or sector, unless that security is removed from the Index or the selling of shares of that security is otherwise required upon a rebalancing of the Index as addressed in the Index methodology.

• Sector Risk - To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors. The Fund may have significant exposure to the following sectors:

  • Energy Sector Risk
  • Information Technology Sector Risk
  • Healthcare Sector Risk

• Shariah-Compliant Investing Risk - Islamic principles restrict the Fund’s ability to invest in certain market sectors, such as financial companies and conventional fixed-income securities, and reduce the size of the overall universe in which the Fund can invest.

• Tracking Error Risk - As with all index funds, the performance of the Fund and its Index may differ from each other for a variety of reasons. In addition, the Fund may not be fully invested in the securities of the Index at all times or may hold securities not included in the Index.

• Underlying Index Risk - Neither the Adviser nor the Index Provider is able to guarantee the continuous availability or timeliness of the production of the Index due delays caused by malfunctions or errors may occur from time to time and may not be identified or corrected for a period of time or at all.