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The Markets April 24, 2007
Sharia-compliant Global Equity Indices Developed
MSCI Barra has developed a global family of Islamic indices designed to reflect the Shariah investment principles.
Reported by Adrien Martin
The MSCI Global Islamic Indices will incorporate dividend purification rules for more relevant benchmark for Shariah portfolios, according to a news release from the firm. The indices can licensed for use by investors around the world for portfolio management and benchmarking purposes, as well as to serve as the basis of structured products and other index-linked investment vehicles such as exchange-traded funds (ETFs).
The firm will introduce a set of flagship indices in July 2007, and the full global index family in October 2007.
According to the release, the indices will be derived from the applicable MSCI Standard Indices, calculated according to the MSCI Global Investable Market Indices Methodology. Screening of both business activities and financial ratios will be used to apply the Shariah investment principles to the MSCI Global Islamic Indices, and will be reviewed by MSCI Barra’s Sharia advisers for ongoing compliance with the MSCI Islamic Index Series Methodology.