Islamic Indices of RIMES
Islamic/ Shariah Compliant Indices
Islamic investment funds combine the virtues of ethical investing with the advantages of non-correlation, with mainstream trends and mainstream equity funds. To ensure compliance with Islamic Shariah principles, a fund's investment opportunities will be pre-screened and approved by a Shariah supervisory board. The manager of the company will select the underlying investments in accordance with the rulings issued from time to time by the Shariah supervisory board; all such rulings and decisions of the Shariah supervisory board are binding on the fund and the manager, whose actions will be subject to periodic review by the Shariah board. Under Shariah law, funds must not purchase interest bearing securities or businesses involved in the manufacture or sale of alcohol, pork products or gambling.
Shariah-compliant investment funds now cover a wide range of sectors including real estate, private equity, infrastructure and energy. For Muslim investors, investment funds are considered permissible under Shariah law compared to bonds, which are not allowed, because Islamic investors are not permitted to receive regular payments of interest.
The main advantage for Islamic fund investors is that they pool their resources with other investors to purchase a wider range of assets than they would have been able to acquire as individuals. More specifically within the investment funds sector, Islamic private equity funds typically invest in shares of companies for which there is only a limited market, for example in developing markets, including many Middle East and North African sectors. Because of the illiquid nature of the underlying assets, both private equity and real estate funds tend to be established as a closed-ended vehicles; this allows the capital to be repaid to investors on the disposal of the underlying investments.
Sector products, such as specialist telecom funds, energy, healthcare and pharmaceutical vehicles are currently available and sit in line with Shariah law. In this regard, indices have been developed that track sector performance, for example, Dow Jones now sponsors its own Islamic index range with its own Shariah committee.
RIMES Middle Eastern Coverage (Shariah compliant):
RIMES currently provides Islamic/ Shariah compliant data for the following databases:
RIMES Middle Eastern Coverage (not Shariah compliant):
Some of the Middle eastern indices covered at RIMES, that are not necessarily Shariah compliant, include MSCI Emerging Markets-Arabian Markets, and MSCI Emerging Markets-GCC. To learn more about MSCI indices covered at RIMES, please visit the MSCI database page. Some of the mid-east relevant indices at MSCI include the following:
RIMES middle-eastern coverage also includes the S&P IFCE GCC and S&P Emerging Markets (IFCE) Indices. To learn more about these indices, please visit the S&P Emerging Markets database page.
Further Information
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