Do join our Telegram group to chat with our like-minded community -
whether you're a seasoned investor, financial experts, housewife, student, or someone who is simply wants to learn more - who shares the Islamic values in their financial journey.
Download Telegram today and click the link below:
https://t.me/joinchat/Vil_03TFIIIyN2M1
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.
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.
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.
Hi.. How do you personally perform overseas fund transfer to wahed..? Via bank transfer..? Or multi currency card like transferwise..?
Hi Sufi, I did a DBS bank transfer. Using a multi-currency card like transferwise may help to reduce some of the foreign exchange loss due to their favourable exchange rate. Good point – may want to try that in the future.
i’m about to use my free Revolut account to do the same 🙂
True, DBS/POSB bank transfer have some heavy fees since it’s not under Remit-free.
Service fees $25
Agent Bank fee: $12.60 (Variable)
Transferwise is a good option to lower down the cost fee.
But I’m not sure how to put the details for Wahed’s side & Transferwise’s side. Appreciate if there’s any guid or walkthrough.
Salam,
On the point – annual charges, if the portfolio consists of other ETFs and Sukuk, each separate fee is charged?
Wsalam Zam, yes – there will separate fees charged for ETF and Sukuk.
Salam, with Wahed invest, is there an option to do a monthly rather than a lump sum?
Wsalam Nul, yes – you can either do a monthly or a lump sum investment. However, do note that you will incur a fee each time you make a transaction hence you may want to consider doing lump sum to minimise it.
Hi, may I know what fee you are referring to as according to their website, there isn’t a deposit fee
hi may i know what transaction fee you are referring to as according to their website, there isn’t a fee for deposits.
You’ll incur fees for transferring funds into Wahed’s overseas account.
Salaam. I have a qn, in the event that the organisation stop operating, what will happen to the money invested?
Wsalam Putri, good question – I’m checking with them as we speak, especially for investors from Singapore.
Understand for some markets that they’re in, investors’ money are covered against brokers’ liquidation (i.e. if they go bust)
– For US, account is covered up to USD500,000 for losses
– For UK, account is covered up to £85,000
read further below. got the reply. thanks!
I previously had the same question asked to Wahed. This was their response. Hope it helps!
Wahed is a registered and regulated Investment Dealer under the Financial Services Commission in Mauritius and we offer Mauritius Union insurance on all accounts up to $250,000 (which covers you against broker liquidation) this does not cover any investment losses.
Thanks Eman! Got the same response too.
Just to add-on, for investments from Singapore, our money is safe-kept under AfrAsia Bank Limited which Wahed is currently using.
The bank is headquartered in Mauritius, and authorised and regulated by the bank of Mauritius. Just note that it is USD 250,000 and not in SGD. Hope that helps!
Salam Khairul, I realised that you didn’t answer the question on withdrawals of funds 😅 Is there a lock-in period? Do they also assign you a personal advisor or some sort that you can communicate with pertaining to your portfolio? Thanks in advance!
Wsalam Shuhada, thanks for the heads-up! I’ve yet to do a withdrawal but I understand there isn’t a lock-in period, and it will take a few days before it is reflected in your account due to cross-border transfer. There isn’t a dedicated advisor per se as it is meant to be robo-advisory, but you can drop in your enquiries via Whatsapp to their customer hotline, which normally they will respond within 24 hours. Hope that helps!
Salam, how does this compare to Algebra. Also I can’t find Algebra’s fact sheet.
Assalamu Alliakum, Shall i know how did you transfer the money by. Is it thru DBS Transfer to overseas account? If yes, how much was your total fees incurred for lets say $1000 of investment. Thanks in advance.
Hi, great article write up.
As a beginner person wanting to start his/her personal investment.
Just to share with you on my opinion.
To deposit, we can only use wire transfer/bank transfer method.
I use POSB/DBS, too bad they’re using AfrAsia Bank which is not under DBS Remit means, there’s a fee for overseas bank transfer. The fee is $25. For withdrawal, I’m not sure what’s the fee but there’s a fee for withdrawal. Do take note this is not Wahed’s fee. Is just bank’s service fee.
Well I do hope Wahed will open up to Singapore for ease of transaction. Not sure how our Malaysian’s counterpart deals with deposits & withdrawals.
Back on the fees, I haven’t start investing tru Wahed coz if I were to invest usd 200 monthly, I would burn my fees quickly than waiting for my money to turn profit.
Can you advise is it safe not to look at the fees & and that I’m wrong?
Create a free Revolut account and use that! That’s my plan at least 🙂
Hi Khairul,
How you make the overseas transfer from Singapore to Mauritius? Is it way DBS banking remit only all the time?
And the currency have to be USD to USD or SGD to USD?
I have made my first transfer SGD to MUR (Mauritian Rupee) in Mauritius local currency to Wahed account. And the transaction was successful too. Now what should i do? Can they directly convert from MUR to USD and invest or they send back my money or it will be considered as wrong transfer and the money gone?
Please advise me on this…
Thanks
Faizal
@Ruzaini… Salam brother … my own brother in USA is an investor managing his fund through Wahed. He recommended it to me. About to open account. What is your thought on Wahed in terms of its growth potential given it started in 2015 and mainly based on USA. As only if Wahed reaches a sizable population of investors it can become a sustainable investment vehicle.
Hi all. Ive invested in Wahed Invest for some time now and one thing i really feel is that its better to lump sum invest rather than small monthly sum. This is because thru DBS Wire Transfer, ive paid a total of abt SGD70 just for the fees (SGD25 from DBS, SGD45 from standard chartered) which makes me think if using stanchart wld actually overcome the high fees since they’re the middle man here? Oh and transferwise is even worse. More than SGD100+ over gone for a USD200 investment. First and last for me for transferwise. Anyone else has tips would appreciate if you can share. Not sure if there is any way to bypass some of the hefty fees involved here.
Try Western Union….bank to bank transfer…it is free for now…and the exchange rates are really good too. Can do it online with your POSB Mastercard in the comfort of your bed.
Thanks for the tip Ali. Haven’t personally tried this, but good to know there’s a cheaper alternative (for now).
Hi firdaus! Mine is the other way round! Managed to successfully add my fund via transferwise. Not sure what’s going on but posb did successfully sent out the fund only that wahed didn’t receive it on their end. So i had to spent another $35 to apply for a tracer. Sad case. Im too looking for ways to reduce the transfer fee further as my plan was to contribute a percentage of my income monthly rather than doing a lump sum transfer.
Salam Khairul. Thank you for sharing your experience.
I also recently started investing with Wahed. The only challenge for me is the transaction cost. I used TransferWise whose charges were about USD 5, which is fine. But Wahed received after a deduction of USD 50 as SWIFT charges by the bank.
So unless one is making a big enough transfer, $50 is a huge transaction cost.
Wsalam Dawood, I agree that the transaction cost % can be huge if your investment amount is small due to the overseas bank transfer. Separately, I understand that Wahed Invest is planning to open up a Singapore bank account soon, so that should resolve that. Will update it here once I have more info.
السلام عليكم
I have invested in both Wahed as well as in Sarwa which is another robo invest platform that allows shariah based investments just like Wahed. The catch is you have to be a resident in one of the GCC countries. Both Wahed and Sarwa are excellent platforms for us to grow our investments in a halal manner.
Wsalam, interesting – I’ll check it out. Thanks for the heads-up 🙂
I think you would also need to flag up exchange rate risks as we are investing in USD. Exchange rate movements (and the various fees everyone is talking about above) can affect your returns significantly.
That’s right Ashraf. In any investments especially that have exposure to the US market (not only applies to Wahed, but stocks in general on NYSE and NASDAQ for example), do keep in mind of the exchange rate risks too.
hi Khairul, thnks for this article which i had just stumbled upon. I am planning to invest with Wahed but am a but anxious, because nowadays investment products via online or app makes me think many times into their safety or legitimacy (versus traditional banks).
So how safe is Wahed Invest Ltd and what role does its financial conduct authority have in case of the unlikely event that Wahed Invest Ltd goes bankrupt or suddenly dissapears online? Sorry i could not find the answer to this anywhere in their client agreement or product information form. Would you be able to know Khairul?
Hi Santhi, they are licensed in the respective countries they’re operating in (e.g. US, UK, MY). You can find it at the website footnote (https://wahedinvest.com/)
For international investors, for e.g. Singapore, the monies will be under the purview of Mauritius’s.
Here’s their response with regards to an unlikely event of liquidation:
Wahed is a registered and regulated Investment Dealer under the Financial Services Commission in Mauritius and we offer Mauritius Union insurance on all accounts up to USD250,000 (which covers you against broker liquidation) this does not cover any investment losses.
Depending on where you are, US and UK have different coverage (US: USD 500,000 | UK: £85,000 ). It is shown on their website.
Hope that helps.
Salam Khairul,
Were you charged 10% of the amount their AfrAsia bank received when you did a wire transfer via DBS? This is excluding the fees DBS charged. I’ve made 2 transfers so far via Transferwise and both times the amount deposited was 10% less.
Wsalam Firdaus, I don’t recall being deducted 10%. I did via DBS too and it was much lesser than that (<1%). I believe it was the fixed transaction fee, hence it matters to put a sizeable capital at the start rather than a small amount every month.
Hi thanks for the great write up. Could you let us know if Wahed investment opens an account in singapore? would like to invest but don’t want to go through the hassle of transferring money to overseas…
Hi Nur, I’ve yet to hear any new updates on that front from Wahed Invest so far.
Hi Khairul, I just downloaded the app to give it a try but after selecting country where im staying which is singapore, it direct me to join a waiting list. Is this the normal procedure?
I have the same question as ammaar above!
Hi Ammaar and Azeemah, that’s new for Wahed Invest, at least in my experience.
Perhaps they might be revamping and coming up with a new flow. Let me know how it goes!
Assalamualaikum Khai, Ammaar and Azeemah,
I encountered the same as you too. Here’s their response when I enquired:
Wa’alaykum Assalaam,
Thank you for reaching out and for your interest in Wahed Invest.
We appreciate your interest in starting your ethical investing journey with us.
We were onboarding clients from Singapore as a part of our international platform. However, at Wahed, we are committed to continuously improve our services and ensure that your journey is not only efficient but also exemplary and seamless.
With that said, we have decided to temporarily pause the onboarding process for new clients on our international platform with the goal to significantly enhance your experience as an investor.
You may join our waitlist by visiting this link: campaign.wahedinvest.com/intl_waitlist. This will also enable us to notify you once our service is available in your country Insha’Allah.
Although we cannot confirm a timeline yet, we’re thrilled to welcome you to an even better and more efficient platform soon.
Thank you for your support and for choosing Wahed!
Hi assalamu’alaikum all! I just opened my Wahed account on 26 May! Ive been looking forward to investing in Wahed due to its sharia compliance, but was taken aback by the service fee by DBS 😂 came here a bit too late to use transferwise since I read its a bit cheaper than DBS. Anw I was charged $37.01. Also in regards to the waiting list, I wasn’t prompted of any though.
Anyway if its ok to share my referral code here for those who wanna get started!
Giving you a free Wahed bonus of USD 25.
To claim your free reward make sure you use this referral code when you sign up: NURIMA2
Download the app https://app.wahedinvest.com/referral
Btw Bro Khairul, do you have any recent updates on your Wahed Investment account so far? I.e returns, tips etc. Thanks in advance!
Hi Khairul,
How is this different from takaful fund.? Both are shariah compliant. Any lock in period for withdrawal . How do we know this investment is safe monitor the progress?
Hi there! First time visitor here and enjoyed reading your take on Wahed Invest. I read it bout 3 days back, and today I just wanna share that I have found a fund that’s Shariah-Compliant available with Endowus. I haven’t personally tried it out yet, but I was just searching for shariah-complaint funds that’s available via respective robo-advisors.
https://airtable.com/shrIsDzFdnrJ9hk4I/tbloYCBC7lmx9ROJ4?backgroundColor=blue&viewControls=on
Here’s the list of funds available with Endowus, and look for Franklin Templeton: Shariah Global Equity Fund.
Hello,
What is better Sarwa or Wahed?
so anyone find a cheaper way to transfer money to Wahed acc yet ?