FTSE Russell And ADX Introduce FTSE ADX 15 Islamic Index For Shariah-Compliant Investments

FTSE Russell, part of LSEG, and Abu Dhabi Securities Exchange (ADX) have introduced the FTSE ADX 15 Islamic Index (FADXI15). This new index strengthens ADX's position in the GCC and sets a modern benchmark for the expanding market. It caters to the increasing demand for Shariah-compliant investment products, offering a dedicated solution for Islamic finance investors within the broader FTSE ADX Index Series.

The global Islamic finance industry has seen significant growth. According to the Islamic Finance Development Report 2023, assets increased by 11% in 2022, reaching US$4.5 trillion. Islamic banking makes up 72% of this total. Since 2012, the industry has grown by 163% and is projected to reach $6.7 trillion by 2027.

The FTSE ADX 15 Islamic Index aims to provide a comprehensive Shariah-compliant option for global investors. IdealRatings, a respected Shariah screening provider, ensures neutrality and adherence to current practices. The index is based on constituents of the FTSE ADX General Index listed on ADX’s Main Market.

Abdulla Salem Alnuaimi, Group CEO of ADX, stated, "The FTSE ADX 15 Islamic Index, our 16th index, underscores ADX’s commitment to supporting the strong demand for Islamic finance tools. This index offers investors access to a diverse selection of high-performing ADX companies that meet rigorous Shariah compliance standards." With over AED2.6 trillion in Shariah-compliant financial instruments, ADX is poised to lead with innovative products like ETFs.

Fiona Basset, CEO of FTSE Russell, expressed enthusiasm about the partnership with ADX: "We are thrilled to partner with ADX to introduce the FTSE ADX 15 Islamic Index. This collaboration reflects our commitment to delivering inclusive investment solutions that meet diverse investor needs worldwide." The new index highlights their dedication to excellence and adaptability in an evolving financial landscape.

Index Methodology and Transparency

The FADXI15 prioritises transparency and liquidity. Its methodologies are available on the FTSE Russell website. Designed for tradeability, it supports creating ETFs and index funds while serving as a benchmark for institutional investors. Real-time and end-of-day Capital and Total Return Indices are also available for investors.

The selection process ensures investability by capping the largest company’s weight at 33%, with any other company not exceeding an 18% weight. This approach maintains balance within the index while catering to diverse market participants' needs.

This initiative marks a significant step in providing tailored investment solutions that align with investor values and market demands. By offering innovative products like FADXI15, both FTSE Russell and ADX demonstrate their commitment to meeting evolving investor needs in the region.

With inputs from WAM