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Global index provider Russell Indexes and IdealRatings, a provider of Islamic finance information, have introduced the Russell-IdealRatings Islamic Index Series, a new index series aimed at Islamic investors seeking Shariah-compliant benchmark solutions.
The new equity indices, which are based on the Russell Global Index universe of over 10,000 securities, combine the methodology of Russell Indexes with the Shariah oversight of IdealRatings.
IdealRatings applies its extensive experience in Shariah-compliant investing to ensure the exclusion of non-compliant businesses according to Shariah law. IdealRatings’ oversight includes specific sector- and financial-based filters. It also includes monitoring and approval by a board of Islamic scholars.
Approximately 3,100 securities from 48 countries qualify for inclusion in the new index series, offering Shariah-compliant exposure across global, global large cap, global small cap, developed, emerging markets, US large cap, BRIC large cap and global + GCC market segments.
Layla Hirschfelt, senior product manager with Russell Indexes, said: “We are excited to partner with IdealRatings to provide investors with a broad, fully modular global equity index that comprehensively reflects the Shariah-compliant opportunity set. By combining the deep index expertise and world class methodology of Russell Global Indexes with the highly respected oversight of IdealRatings, we believe we now offer a more compelling Shariah-compliant opportunity set to global multi-asset investors.”
Mohamed Donia, CEO of IdealRatings, added: “IdealRatings is a highly trusted provider of accurate and timely Islamic finance information and our services are used by some of the leading financial institutions worldwide. We are now pleased to join forces with Russell Indexes to bring an enhanced offering to Shariah investors.”
IdealRatings has previously collaborated with a number of other index providers, including MSCI, FTSE, Stoxx and Thomson Reuters, to roll out Shariah-compliant indices. Russell, also, has launched products in this space before; in June 2009, the provider teamed up with Saudi-based Jadwa Investment to launch the Russell-Jadwa Shariah Index family.
The new Russell-IdealRatings series includes:
Russell-IdealRatings Islamic Global
Russell-IdealRatings Islamic Global Large Cap
Russell-IdealRatings Islamic Global Small Cap
Russell-IdealRatings Islamic Developed
Russell-IdealRatings Islamic Emerging Markets
Russell-IdealRatings Islamic US Large Cap
Russell-IdealRatings Islamic BRIC Large Cap
Russell-IdealRatings Islamic Global + GCC
The indices have been designed to act as benchmarks for actively managed funds and as underlyings for index-tracking products such as exchange-traded funds (ETFs). Approximately $3.9 trillion in assets are already benchmarked to the Russell Indexes, including a variety of ETFs
Investors looking for immediate access to Shariah-compliant equities have a range of ETFs at their disposal. In terms of UK and European listed products, both iShares and db X-trackers offer funds in this space, covering global, US, European, Japanese and emerging equity markets.