FTSE Russell, an LSEG business, and Abu Dhabi Securities Exchange (ADX), have announced the launch of the FTSE ADX 15 Islamic Index (FADXI15). 

 

This new index leverages FTSE Russell’s recognised index expertise to augment ADX’s leading role in the GCC region and establish the next-generation benchmarks for this dynamic and expanding market. 

 

The FTSE ADX 15 Islamic Index meets the increasing demand for Shariah-compliant investment products and will act as a dedicated solution for Islamic finance investors within the broader FTSE ADX Index Series.

 

Growth of Islamic finance

According to the Islamic Finance Development Report 2023, the global Islamic finance industry has seen significant growth. In 2022, the industry's assets increased by 11% to reach $4.5 trillion, with Islamic banking accounting for 72% of the total assets. Since 2012, the industry has grown by 163% and is projected to expand to $6.7 trillion by 2027.

 

Abdulla Salem Alnuaimi, Group Chief Executive Officer of ADX, said: “The FTSE ADX 15 Islamic Index, our 16th index, is a testament to ADX’s commitment to supporting the strong and growing demand for Islamic finance tools and solutions. This new index offers investors access to a diverse selection of high-performing ADX companies that meet rigorous Shariah compliance standards. 

 

“With over AED2.6 trillion ($710 billion) market value of Shariah-compliant financial instruments, ADX is well-positioned to lead in this space, providing innovative products such as ETFs and guiding investors toward companies aligned with their values.” 

 

Fiona Basset, CEO of FTSE Russell: “We are thrilled to partner with ADX to introduce the FTSE ADX 15 Islamic Index. This collaboration underscores our commitment to providing innovative and inclusive investment solutions that meet the diverse needs of investors worldwide. The new Islamic Index is a testament to our dedication to excellence and our ability to adapt to the evolving financial landscape.”

 

Shariah-compliant index

The FTSE ADX 15 Islamic Index is designed to provide a comprehensive and representative Shariah-compliant index for global Islamic investors, with screening conducted by IdealRatings, a respected Shariah screening provider. It is derived from the constituents of the FTSE ADX General Index listed on the Main Market of the Abu Dhabi Securities Exchange. 

 

By partnering with IdealRatings, an impartial research provider, FTSE Russell ensures neutrality and adherence to the latest practices. The index constituents are selected and weighted to maintain investability, with the largest company's weight capped at 33% and any remaining company weight not exceeding 18%.

 

Transparency and liquidity are key features of the FADX15. The index methodologies are openly available on the FTSE Russell website (FTSE ADX Index Series: Ground Rules (lseg.com)), and the index is designed to be tradeable, supporting the creation of ETFs, index funds, and serving as a benchmark for institutional investors. 

 

Additionally, real-time Capital index and End-of-day Capital & Total Return Indices are accessible for investors, ensuring that the index meets the needs of a diverse range of market participants.--TradeArabia News Service