Instantly Interpret Free: Legalese Decoder – AI Lawyer Translate Legal docs to plain English

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## Investment Strategy Selection

I have carefully chosen two index funds for my investment strategy. I plan to invest £40,000 in a Dollar-Cost Averaging (DCA) approach, splitting it evenly between the two funds over the course of this and the next tax year.

## Fund Selection

The first fund I have chosen is the iShares MSCI World Islamic UCITS ETF (Dist). I believe this global iShares tracker offers stability and diversification, which are crucial factors for a long-term investment plan.

The second fund in my portfolio is the Invesco Dow Jones Islamic Global Developed Markets UCITS ETF Acc. This fund appeals to me due to its exposure to tech stocks, which I anticipate will perform well in the coming years.

## Concerns about Over-Diversification

One concern that has been on my mind is the potential of over-diversification by splitting the investment 50/50 between these two funds. I am seeking advice and suggestions on whether this allocation is optimal or if I should consider adjusting the distribution.

## AI Legalese Decoder Assistance

With the help of the AI Legalese Decoder, I can analyze the legal language and complexities within the fund documents to ensure I fully understand the terms and conditions associated with each investment. This tool can provide valuable insights and clarity on the legal aspects of these funds, allowing me to make informed decisions and mitigate any risks associated with my investment strategy.

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### The Challenges of Legal Jargon

Legal jargon, or legalese, can be a significant barrier for individuals seeking legal assistance or attempting to navigate the legal system on their own. The use of complex language and obscure terminology can make legal documents difficult to understand, leading to confusion and potential misunderstandings. This can be particularly challenging for individuals who are not familiar with legal terminology or who have limited English proficiency. In some cases, the use of legal jargon may even be intentionally misleading or obfuscating, making it difficult for individuals to fully comprehend their rights and obligations.

### How AI Legalese Decoder Can Help

AI Legalese Decoder is a cutting-edge tool that utilizes artificial intelligence to simplify and translate complex legal jargon into plain language. By inputting legal documents or text into the AI Legalese Decoder, individuals can receive clear and concise explanations of the content, making it easier to understand the implications and requirements outlined in the document. This tool can be particularly valuable for individuals who are navigating legal processes on their own or who are seeking legal advice but are unsure of the language used in legal documents. AI Legalese Decoder can help individuals gain a better understanding of their rights and responsibilities, empowering them to make informed decisions and effectively advocate for themselves in legal matters.

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4 Comments

  • snaphunter

    > I have checked the performance of these two funds and they seem to be doing good.

    Don’t pick funds based on their performance (I know that sounds dumb), but pick them based on whether or not their construction makes sense in the context of your investment strategy.

    Have you looked at the holdings of the two funds? The [iShares fund](https://www.justetf.com/uk/etf-profile.html?isin=IE00B27YCN58#holdings) is just 370 companies, the [Invesco one](https://www.justetf.com/uk/etf-profile.html?isin=IE000UOXRAM8#holdings) is 1,778 companies, and I hazard a guess that all of the 370 are already included in the Invesco one. The iShares fund is 18% Microsoft, then tiny bits of the 369 other companies, that’s not very diverse! In fact, by buying *both* of these funds all you are doing is *concentrating* your investment towards the tech giants (Microsoft and Tesla etc) rather than getting a true global picture. If you *want* to do that, fine, but do so with your eyes open.

  • strolls

    What an unexpectedly interesting question. You should have put “Sharia / Islamic” in the title, really.

    The general rule is that you should choose the thing you want to invest in and stick to it – if you’re going to invest in two different index funds then you should have a clear reason for doing so, based on their actual allocations. By this I mean you should understand what they invest in – “I want to diversify” and “I can’t decide between world and USA” aren’t, alone, good reasons. Each should contribute to the overall portfolio in the way that you desire, probably each bringing something different.

    These are two funds doing basically the same thing – why wouldn’t you just choose one of them?

    It turns out that the two funds are doing the same thing, but also they aren’t – plot them on a chart and one of them is relatively new, but their performance has been significantly different over this period.

    They are both islamic funds tracking a world equity index, but look at their top 10 components and they are different – MSCI has Exxon, J&J, P&G, AMD, Salesforce, Chevron and Adobe, whereas Dow Jones has Apple. Nvidia, Amazon, Meta, Eli Lilly, Broadcom and Visa. Visa is a payments processor, not a lender BTW. I’ve missed some out here, just trying to give you the gist; they both hold Microsoft and Tesla.

    (Note that maybe one of these funds has some or all of the companies that it’s missing from the other’s top 10 list, but they’ve been pushed out of the top 10.)

    The indexes in question are the MSCI World Islamic Index vs the Dow Jones Islamic Market Developed Markets Index.

    You have to click around a bit more to get the MSCI screening criteria, but the criteria for the Dow Jones fund is in Appendix I of this [PDF](https://www.spglobal.com/spdji/en/documents/methodologies/methodology-dj-islamic-market-indices.pdf). I don’t see any mention of carbon emissions etc, except in a disclaimer, which could account for the exclusion of Exxon and Chevron.

    As far as I can see the islamic screening criteria of both funds is mostly the same – companies are excluded if they earn more than 5% of their revenue from alcohol, pork, banking or fun (it literally says “entertainment”), but the financial screening is a bit different.

    The financial screening is about how much debt a company is allowed (if it’s to be included) and the two seem much the same about the amounts, but the MSCI screening has extra allowances for sharia-compliant debt and “dividend purification” (giving money to charity?) whereas the Dow Jones document talks about giving companies three evaluation periods to come into compliance if they’ve got 1% or 2% too much debt.

    I’m getting bored / tired of this now, but two things spring to mind:

    1. Depends how much you care about the debt screening. Possibly the “three evaluation periods” allows companies enough time they they don’t get kicked out, whereas MSCI remove them more quickly, but that’s just speculation – the two policies differ in other details too.

    2. Maybe one of these compilers is more devout or assiduous than the other – surely Apple earns more than 5% of its revenues these days from Music and TV streaming (probably Amazon doesn’t) so surely Dow Jones should be considering it haram?

    Ultimately, it depends on how much you care – this is an unusual case that I really think 50% of each is perfectly acceptable, if you don’t care about digging down into the details and discussing it with your priest.

    If it was me I would probably be trying to understand the differences better, as there is a signifiant performance gap over the last year or two since the newer fund was launched, but I’m not muslim, so rather you than me, mate.

  • strolls

    > I have checked the performance of these two funds and they seem to be doing good.

    We don’t have the data to meaningfully say this – a fund or an asset-class can out- or under-perform for a decade at a time.

    You should pick a fund based on the kinds of assets you want to invest in, and whether you expect those to meet your needs going forward. Past performance is pretty much irrelevant, at least when it comes to this kind of fund.

    Watch Lars Kroijer’s [short video series](https://www.youtube.com/playlist?list=PLXy71rkGuCjXLg9N8zowwUpXCYfBcMJFK) and read his book or Tim Hale’s [*Smarter Investing*](https://www.amazon.co.uk/dp/1292444401).

  • lonathas_

    Also a newbie investor. Unfortunately not got anything helpful to say but commenting to leech any advice you get.

    Good luck!