eToro, the popular trading and investing platform, has partnered with Arabesque AI, an investment advisory and technology company. Together, they have launched a new Sharia-compliant portfolio called ShariaAI-Growth. This portfolio uses Arabesque’s advanced AI technology and ESG data to identify high-growth US stocks that comply with Sharia principles.
Founded in 2007, eToro empowers users to invest, share, and learn in a simple and transparent way. With over 35 million registered users from more than 100 countries, eToro offers a collaborative investment community.
Arabesque AI combines AI-driven assessments and market-leading ESG data to deliver customized, impactful portfolios. Their technology platform, Portfolio Dragon, helps portfolio managers create and manage portfolios efficiently, integrating financial and sustainability preferences. Arabesque operates globally with offices in London, Frankfurt, and Singapore.
George Naddaf, GCC & MENA Regional Manager at eToro, said, “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.” A recent eToro survey revealed that 84% of retail investors in the UAE consider ESG factors before investing, and 35% emphasize the importance of Sharia compliance. This partnership aims to meet those needs.
Sharia-compliant investment products have shown strong returns over time. The S&P 500 Sharia Index returned 14.25% annually over the past 10 years, compared to 12.96% for the regular S&P 500 Index. Omar Selim, Group CEO of Arabesque, expressed his excitement about the partnership. He stated, “We are delighted to partner with eToro to deliver faith-based investment products at scale, powered by Portfolio Dragon and ESGBOOK.”
How does Sharia AI work?
The ShariaAI-Growth portfolio includes up to 40 US equities. The selection process involves:
- Screening stocks with a market cap of over $1 billion and an average daily trading volume of over $10 million.
- Ensuring compliance with AAOIFI Sharia principles through business activity and financial ratio screens.
- Evaluating stocks using Arabesque’s AI technology to select those with high expected returns, strong earnings growth, and high ESG scores.
The portfolio is rebalanced quarterly, considering expected returns, risk, and transaction costs. Initial investments start at $500. Investors can track the portfolio’s performance using eToro’s tools and charts. eToro’s social feed also keeps them updated on sector developments.
