I made an investment with Wahed Invest. Here’s 4 things I’ve learnt so far.

Robo-advisory platforms have been sprouting in recent years such as Stashaway, AutoWealth and Syfe, but here in Singapore, it has not been friendly for Muslims investors like myself. 

Mainly because its products are not Shariah-compliant.

Comes in Wahed Invest.

Wahed Invest has been around since 2015 which started in the US and has since made in-roads into the Southeast Asia markets in 2019.

So when Wahed Invest was officially introduced in Singapore, I decided to give it a try.


via GIPHY

In this article, I will share my honest thoughts and learnings so far since I started in January 2020.

I will also answer some of these questions:

  • Should I invest in Wahed Invest?
  • Is Wahed Invest fees more favourable than if I were to do my own investments?
  • Is it easy to do a deposit and withdrawal with Wahed Invest?
  • Can I change my portfolio once I have selected one the first time?

Without further ado, let’s dive right in.

[1] Wahed Invest provides a good balance across different class assets and exposure to both global and emerging markets.

For a start, I was recommended to go for a ‘Moderately Aggressive’ portfolio after answering a 2-minute compulsory questionnaire to assess my risk profile.

I accepted it, and this is how they allocate my investments.

I’m summarising here if you are unable to see the image above:

  • Global Stocks (39.46%)
  • Sukuk (34.37%)
  • Emerging Market Stocks (9.89%)
  • Gold (6.94%)
  • Cash (9.34%)

Wahed Invest provides their investors exposure into both global and emerging market stocks, while hedging it with sukuks and gold.

Normally sukuks and gold are inversely proportional to stocks. What that means is that when the value of stocks goes down, sukuks and gold will rise and vice versa.

This is normally the approach to achieve a balanced and well-diversified portfolio.


via GIPHY

Besides the cash component at 10% which I would prefer it to be invested more efficiently, Wahed Invest has allocated about 50% into higher-risk stocks, and 40% into low-risk sukuks and gold which is reasonable enough.

[2] Wahed Invest is transparent in its costs, returns, the specific funds it is investing in

What I like about Wahed Invest is the transparency it provides.

Before deciding which type of portfolio I should go for, it provides a projected return should I stay invested over a 10-year horizon.

For a moderately-aggressive portfolio, the projected return is 6.17% annually.

For the rest of the types of portfolio, here are the current projected returns:

You can check out at Wahed’s website here.

Delving deeper, you can also find out more what are the breakdown of the different types of funds they are investing into.

This is helpful for more savvy investors who want to check out which specific funds their capital flow to and what does it entails (I will explain more in the next point).

Costs-wise, it is cleanly laid out on their website.

If you’re someone like me who invested SGD 249,999 or less, you will be charged 0.99% annually that goes to Wahed Invest.

This covers all portfolio management costs, trading costs, custodial costs, and operational costs.

However, one thing to take note though, which Wahed Invest has highlighted (and I wish it could be educated in a simple infographic manner) is that this annual cost is NOT inclusive of the underlying costs and fees for Wahed-managed ETFs and other ETFs in your portfolio.

What this means is that, for example, Wahed Invest recommends your portfolio to have iShares MSCI World Islamic ETF. This ETF is managed by another fund company, BlackRock, and they charge an annual fee of 0.60%.

This cost will be absorbed by you, on top of the 0.99% that is charged by Wahed Invest.

To illustrate this, let’s say you put a total of USD 10,000 into Wahed Invest and 30% is allocated to iShares MSCI World Islamic ETF.

The estimated annual charges for this $3,000 will be around 1.64% and the breakdown will be as follow:

As an investor, it is important to understand these fees to ensure that you’re comfortable with it as it does impact your overall long-term returns.

Wait a minute – if I can invest in iShares MSCI World Islamics Funds ETF directly via my broker at 0.60% annual fee, why would I want to go through Wahed Invest at 1.64%?

That’s the question that I had when I first started.

This is where Wahed Invest is aiming to value-add beyond the rates.

What Wahed Invest is offering is essentially an advisory and fund management service.

This premium rate is essentially their service in rebalancing the portfolio, buying and selling the trades on your behalf and managing your portfolio in entirety. Similar to any mutual fund companies out there.

If you are an experienced investor who prefers to save on that additional 0.99%, it is perfectly fine to do it yourself but you will have to bear the transaction costs each time you buy and sell.

And this leads to my next point…

[3] Wahed Invest gives you access to some funds which you might otherwise not able to invest in via your broker

For Global Stocks (iShares MSCI World Islamic ETF and Wahed FTSE USA Shariah ETF) and Emerging Market Stocks (iShares MSCI EM Islamic ETF), you can invest them directly via your brokerage.

In my case, I’m using Standard Chartered brokerage.

I’ve explained about the characteristics of these three funds here.

To summarize, the funds under ‘Global Stocks’ are predominantly focusing on the big cap firms in the US, and the Emerging Markets Stocks are diversified in markets such as China, Japan and South Korea.

However, there are other funds which you are not able to access and invest in directly.

For example, there currently aren’t any available local brokers that allow buying and selling Sukuk funds in Singapore. 

Hence as a Muslim Singaporean investor, the only way I can have access to the likes of Franklin Global Sukuk Fund, Arqaam Islamic Income Fund and Emirates Global Sukuk Fund is through Wahed Invest today.

[4] Wahed Invest provides a value-added purification service

One interesting thing that I came across while researching for this article was that Wahed Invest also provides a purification service.

Despite the best efforts to be 100% Shariah-compliant, Wahed Invest does acknowledge candidly that non-Shariah compliant returns are sometimes mistakenly generated.

Therefore, an accepted practice would be to “cleansed” that particular returns. In their words, these returns will be “identified, segregated and redirected to charity”.

This is a nice gesture for Muslim investors like myself who appreciate the little help to identify these non-compliant returns which might otherwise be overlooked.

It gives the assurance and peace of mind knowing that our investments are halal and managed to the best of their ability with the Muslims’ interests in mind.

Other questions you might be interested in:

  • Is it easy to do a deposit and withdrawal with Wahed Invest?

It wasn’t as straightforward as I was hoping for when I first started. I have to manually do a bank transfer to an offshore account which takes a couple of days before it is successfully reflected in my Wahed account.

I was a little worried when I saw the offshore account details (Nigerian prince anyone?) instead of a direct debit transaction but the sales representative was assuring enough to guide through the full process.

I would take this as one of the teething issues of any fast-growing startups and I’m sure they will improve on these processes over time.

  • Can I change my portfolio once I have selected one the first time?

In short – yes.

Wahed Invest has introduced this feature in early 2020 due to feedback on users who want to change their risk appetite of their portfolios, but unable to do so.

Now you can.

All you have to do is to go through another round of questionnaire and the changes will be made in 1-3 business days.

The only caveat here is you can change the risk profile of your portfolio only once every 3 months, the earliest.

In Summary…

Like any other robo-advisory platform, Wahed Invest is a passive investment vehicle.

What that means is that you do not need to actively manage the funds as Wahed Invest does all the heavy lifting from recommending what investments to go for, to buying and trading the funds and rebalancing and optimizing your portfolio based on the current market conditions.

Yes, it may come with additional fees as compared to doing it yourself, but if you’re the type of investor who needs a fuss-free approach because of various reasons (too busy or not confident enough to manage the investments yourself), Wahed Invest would be ideal for you.

Also applies to investors, someone like myself, who wants to diversify into certain asset classes (for example, sukuks) which they might otherwise miss out.

Now its your turn.

I’ve shared my thoughts on Wahed Invest. Now I want to turn it over to you.

If you have kickstarted your investment journey with them before, how is your experience so far?

Let me know in the comment section below.

Just a sec!

If you find this article beneficial and would like to support SmartMamat in bringing you more quality content, do consider using our referral code kharuz1 when you're registering an account with Wahed Invest.

It will go a long way towards building SmartMamat into a sustainable endeavour, insya’Allah.

32 Comments

  1. Muhammad Sufi May 16, 2020
    • Khairul Ruzaini June 6, 2020
      • Muhammad Fawaz August 3, 2020
      • i'm not smartmamat August 5, 2020
  2. Zam May 24, 2020
    • Khairul Ruzaini June 6, 2020
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        • Dawood August 29, 2020
  4. Putri June 6, 2020
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    • Eman June 15, 2020
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  5. Shuhada June 22, 2020
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  8. Not So Smart Mamat July 17, 2020
    • Muhammad Fawaz August 3, 2020
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      • Khairul Ruzaini November 19, 2020
  12. MasR August 25, 2020
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    • Khairul Ruzaini November 19, 2020
  14. Feroz SIDDIQUI October 27, 2020
    • Khairul Ruzaini November 19, 2020

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