SPWO vs UMMA

1) Key Takeaways

• Overlapping mandate, different mechanics: Both funds are Shariah-compliant, ex-U.S. equity ETFs with heavy technology weightings, but SPWO is a passive index tracker while UMMA is actively managed.
• Cost advantage: SPWO carries a 0.55% expense ratio versus UMMA's 0.65%, a meaningful gap for cost-conscious long-term investors.
• Breadth vs. concentration: SPWO holds roughly 400 securities, while UMMA holds about 95, giving SPWO a wider diversification profile and UMMA more concentrated exposure to its largest names.
• Geographic tilt: SPWO leans more heavily toward emerging Asia (notably Taiwan), while UMMA skews toward developed markets, led by Japan and South Korea.
• Shared risk driver: Both funds are highly sensitive to the semiconductor cycle, since Taiwan Semiconductor Manufacturing, Samsung, and SK hynix rank among their top holdings.
• Structural nuance: UMMA is a non-diversified, active fund that additionally screens for ESG (environmental, social, and governance) risk, distinguishing it from SPWO's rules-based index approach.

2) Introduction

Faith-based and values-driven investing has matured into a distinct ETF category, and few products illustrate the nuances better than SPWO and UMMA. Both seek Shariah-compliant equity exposure to global markets outside the United States, which places them in direct competition for the same investor dollar. Yet they arrive at that objective through different construction methods, cost structures, and geographic emphases. For investors comparing these two funds, the central question is whether a low-cost, passive, and broadly diversified approach (SPWO) or a concentrated, actively managed strategy with added ESG screening (UMMA) better suits a portfolio. This ETF comparison examines the structural differences, sector exposure, and relative positioning that drive fund performance in today's market.

3) SP Funds S&P World (ex-US) ETF (SPWO) Overview

SPWO is a passively managed fund issued by SP Funds that tracks the S&P DM Ex-U.S. & EM 50/50 Shariah Index. This benchmark selects Shariah-compliant companies from developed and emerging markets outside the U.S., applying a rules-based screen for adherence to Islamic investment guidelines and a cap to encourage diversification. The fund launched in December 2023 and carries a net expense ratio of 0.55%.

The portfolio spans roughly 400 holdings, with a pronounced technology tilt that represents close to half of net assets. Its top holdings include TSM (Taiwan Semiconductor Manufacturing), Samsung Electronics, SK hynix, ASML, and BABA (Alibaba). Beyond technology, healthcare, industrials, and consumer discretionary round out the sector mix. Geographically, Taiwan is the largest country exposure, followed by South Korea, China, Switzerland, and Japan. As a modified market-capitalization-weighted, non-diversified fund, SPWO offers broad, rules-based access to global ex-U.S. equities through a Shariah lens.

4) Wahed Dow Jones Islamic World ETF (UMMA) Overview

UMMA is an actively managed ETF from Wahed Invest that launched in January 2022. The fund seeks long-term capital appreciation by investing in global equities, excluding U.S.-domiciled companies, that meet Shariah requirements as interpreted by subject-matter experts. Although it loosely references the Dow Jones Islamic Market International Titans 100 Index, UMMA is not a strict index tracker and additionally incorporates ESG risk screening into its selection process. Its net expense ratio is 0.65%.

The portfolio is more concentrated, holding approximately 95 securities. Top positions include Samsung Electronics, SK hynix, TSM, ASML, Constellation Software, Infineon Technologies, and AZN (AstraZeneca). Technology again dominates sector exposure, followed by healthcare and consumer staples. From a geographic standpoint, Japan, South Korea, Switzerland, and Taiwan lead the allocation, reflecting a stronger developed-market bias than SPWO. As a non-diversified, active fund, UMMA offers a curated, concentrated take on Shariah-compliant international equities.

5) Industry and Thematic Backdrop

Both funds operate within the Shariah-compliant, ex-U.S. equity space, a niche that has attracted growing interest from investors seeking alignment between their portfolios and their values. This thematic backdrop is shaped by two dominant forces: the global semiconductor cycle and the relative performance of non-U.S. equities versus the U.S. market.

The heavy technology weighting in both funds means their fortunes are closely tied to demand for artificial intelligence hardware, memory chips, and advanced manufacturing equipment. Names such as TSMC, Samsung, and SK hynix sit at the center of this dynamic, making both ETFs sensitive to the same earnings cycles and capital-expenditure trends. At the same time, currency movements, particularly the U.S. dollar, and regional monetary policy influence returns for ex-U.S. strategies. Regulatory and geopolitical factors, including trade policy affecting semiconductor supply chains, remain key sector risks that cut across both portfolios.

6) Performance and Positioning Comparison

Because both funds share a heavy technology and semiconductor concentration, their performance has tended to move in broadly similar directions over recent months and market cycles, driven by the same top holdings. However, structural differences influence their relative positioning.

SPWO's broader portfolio and lower expense ratio provide a cost-efficiency and diversification edge, potentially reducing single-stock risk even with its large Taiwan Semiconductor position. UMMA's more concentrated, actively managed construction can magnify the impact of its top names and produces slightly different sector and country tilts, including greater exposure to Japan and Switzerland. In recent periods, the technology-heavy bias common to both funds has made each more volatile than a broad international equity benchmark, with relative performance closely tracking the health of the global chip sector, earnings momentum among mega-cap technology firms, and shifts in interest-rate expectations across major economies.

7) AI Screener

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8) Tickeron AI Verdict

Based on observable structural factors, Tickeron's AI would likely favor SPWO in a head-to-head comparison. The passive fund offers a lower expense ratio, a much broader and more diversified portfolio, and comparable thematic exposure to the semiconductor-driven growth cycle that has powered both products. Its rules-based, modified-cap-weighted construction tends to deliver more consistent exposure and lower concentration risk than UMMA's narrower, actively managed portfolio. While UMMA's ESG overlay and developed-market tilt may appeal to specific investor preferences, SPWO's combination of cost efficiency, diversification breadth, and comparable sector momentum positions it as the more structurally robust choice in most market environments.

9) Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

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