Dow Jones Indexes, a leading global index provider, today announced it will expand its Dow Jones Islamic Market Indexes series by launching the Dow Jones Islamic Market Global Finance & Takaful Index, which measures the performance of financial services stocks that pass rules-based screens for Shari’ah compliance. (Insurance stocks that pass such screens are known as Takaful.)
The index, designed to provide broader coverage of the Shari’ah-compliant financial services sector, will serve as a benchmark and an underlying instrument for investment products such as mutual funds and exchange-traded funds (ETFs).
“The Dow Jones Islamic Market Indexes is a unique series that combines faith-based principles and benchmarking,” said Michael A. Petronella, president, Dow Jones Indexes. “Our index family was the first to market and has clearly set the standards of Islamic indexing around the world. And, once again, with the launch of the Dow Jones Islamic Market Global Finance & Takaful Index, we are providing the market with the first benchmark of its kind for these combined sectors.”
Eligible companies are banks, insurance and financial services companies. Included in the index are those stocks that pass financial ratio screens that are less than 33% in total debt, divided by trailing 24-month average market capitalization; cash plus interest-bearing securities, divided by trailing 24-month average market capitalization; and accounts receivables, divided by trailing 24-month average market capitalization.
The US dollar-denominated Dow Jones Islamic Market Global Finance & Takaful Index is weighted based on float-adjusted market capitalization, with the weight of individual stocks restricted to 15%. The index composition is reviewed quarterly in March, June, September and December; it is also regularly reviewed to account for corporate actions such as mergers, de-listings or bankruptcies.
Dow Jones Indexes was the pioneer in Islamic indexes, launching the first Shari’ah-compliant indexes in 1999. With thousands of indexes, the series is the most comprehensive family of Islamic market measures with regional, country, and industry indexes, all of which are subsets of the Dow Jones Islamic Market Index. An independent Shari’ah Supervisory Board regularly counsels Dow Jones Indexes on the current and potential eligibility of index companies.
Please visit www.djindexes.com for more information on the Dow Jones Islamic Market Indexes.