Home » Sharia-Compliant AI-Powered Portfolio Launched by eToro and Arabesque AI 

Sharia-Compliant AI-Powered Portfolio Launched by eToro and Arabesque AI 

by Madaline Dunn

Trading and investing platform eToro has announced that it has partnered with Arabesque AI, an investment advisory and technology company, to launch a new Sharia-compliant AI-powered portfolio named ShariaAI-Growth in the Middle East. 

The platform utilises Arabesque’s AI technology and bank of environmental, social, and governance (ESG) data to identify high-growth US stocks that comply with Sharia principles, it was shared.

The ShariaAI-Growth portfolio comprises up to 40 US equities.

The selection process is as follows:

● Step 1: From the pool of US stocks available on the eToro platform, only those with a market cap of over US$1 billion and an average daily trading volume of over US$10 million are eligible.

● Step 2: The eligible stocks must pass a business activities screen and financial ratio screens to guarantee compliance with Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Sharia principles.

● Step 3: The compliant stocks are evaluated with Arabesque’s AI technology to select those with the highest expected returns, strong earnings growth over the previous 12 months and high ESG scores to be included in the final portfolio.

The portfolio is rebalanced quarterly and takes into account expected returns, as well as risk and transaction costs. 

The Sharia screening process is based on the AAOIFI Shari’ah Standard No. (21). Initial investment starts at US$500 and investors can access tools and charts to track the portfolio’s performance. Further, eToro’s social feed will keep them up-to-date on developments in the sector.

“Since our launch in the UAE six months ago, our goal has been to tailor our services to meet the evolving needs of our users in the region,” explained George Naddaf, GCC & MENA Regional Manager at eToro. 

According to Naddaf, the company’s recent survey of retail investors in the UAE found that 84 per cent consider ESG factors before investing, with 35 per cent emphasising the importance of their investments being Sharia-compliant.

Omar Selim, Group CEO of Arabesque, commented: “We are delighted to partner with eToro to deliver faith-based investment products at scale, powered by Portfolio Dragon and ESGBOOK.”

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