MSCI Barra has launched a global family of Islamic indices designed to reflect Sharia investment principles while retaining replicability for international investors.
MSCI Barra has launched a global family of Islamic indices designed to reflect Sharia investment principles while retaining replicability for international investors. Importantly, the MSCI Global Islamic Indices will incorporate dividend purification rules, resulting in more relevant benchmarks for Sharia portfolios.
‘The MSCI Global Islamic Indices cover over 50 developed and emerging countries and over 50 regions such as the Gulf Cooperation Council (GCC) countries and Arabian markets,’ says Henry Fernandez, Chief Executive Officer and President of MSCI Barra. ‘This clearly demonstrates our commitment to delivering new and innovative products and services for the Islamic investment community around the world. The launch of this new index family follows the opening of our office in Dubai earlier this year, and the launch of the MSCI GCC Countries Indices in 2006.’
An independent Sharia Board, the Sharia Supervisory Committee of Dar Al Istithmar Limited, has granted a Fatwa on the MSCI Islamic Index Series Methodology, concluding that the methodology is in compliance with generally accepted Sharia guidelines.
The MSCI Global Islamic Indices are derived from the applicable MSCI country indices. Then according to the MSCI Islamic Index Series Methodology, the MSCI country indices are screened against a series of business activities and financial ratios, and a dividend adjustment factor is applied.
The MSCI Global Islamic Indices may be licensed for use by institutional 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 ETFs.