Wednesday, February 23, 2011
Dow Jones Indexes to launch Takaful Index
Dow Jones Indexes is expanding 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.
The new 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 per cent in total debt, divided by trailing 24-month average market capitalisation; cash plus interest-bearing securities, divided by trailing 24-month average market capitalisation; and accounts receivables, divided by trailing 24-month average market capitalisation.
The 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 per cent. 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.
Courtesy by: CPI Financial