First Islamic Benchmarks Offering Research-Based Shariah Screening Based On Globally Accepted Standards
London – Thomson Reuters and IdealRatings today announced the launch of Thomson Reuters IdealRatings Islamic Indices, the first Islamic benchmarks to offer research-based Shariah screening based on a globally accepted Shariah standard to investors, money managers and analysts across a range of Islamic instruments, resulting in the most transparent Islamic guidelines for investors around the world. A $1 trillion industry growing over 15% annually, Islamic Finance investors are seeking evolved screening methodologies and deeper sector coverage in order to benchmark and create funds and investment vehicles to tap into this increasingly liquid market.
The new family of indices includes compliant companies in over 60 countries and covers the global equity markets in nine regions including the Gulf Cooperation Council (GCC) and Middle East and North Africa (MENA) in addition to individual country indices and sectors such as Global Technology, Healthcare and Energy. Companies represented in the indices include global corporations such as Exxon, Microsoft, Google and Novartis. All of the indices comply with the relevant provisions of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
“The industry is looking towards so called ‘Islamic Indexing 2.0’ and Thomson Reuters is pleased to be working with IdealRatings to lead the market with these first of its kind Islamic indices using research-based rather than automatic screening and our unique global sector standards,” said Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters. “With the industry seeing double digit growth annually, Thomson Reuters robust Islamic finance offerings are creating the foundation for the continued development of the rapidly evolving global Islamic finance community and Islamic equity capital markets.”
Thomson Reuters IdealRatings Islamic Indices research-based screening approach guarantees the most recent Shariah-compliant status by reviewing the index on a quarterly basis to ensure they meet relevant sector, financial and general considerations. Proprietary algorithms scour all public information and news about a given company to determine whether specific company revenue should be screened further for non-compliance while a dedicated team of researchers scrutinizes algorithm outputs for accuracy checks and analyzes company financials and lines of business. Over 30 revenue streams of interest to Shariah compliance are tracked for each company.
The indices are the only Islamic indices available that utilize the proprietary Thomson Reuters Business Classification (TRBC), the industry’s broadest classification system covering 71,000 public companies worldwide. The classification tracks 124 industries subdivided into 52 industry groups, 25 business sectors and 10 economic sectors on a global or regional basis. TRBC was recently recognized by the Journal of Indexes as the most useful industry classification scheme for ETF investors.
“The Thomson Reuters IdealRatings Islamic Indices build upon both Thomson Reuters and IdealRatings commitment to serving the Islamic Finance community while leveraging Thomson Reuters global coverage and years of index experience to provide the deepest insight into the Islamic finance market available through our proprietary sector classification. The launch of these new indices represents our ability to create unique opportunities for investors to access asset classes and themes beyond the conventional equity markets,” commented Sunand Menon, Managing Director, Thomson Reuters Indices.
Mohammed Donia, CEO of IdealRatings, said, “The combination of Thomson Reuters global indexing expertise and IdealRatings rigorous research-based screening methodology, proprietary algorithms and a globally accepted Shariah standard results in an Islamic Finance product the market demanded but was unavailable until now.”
Thomson Reuters IdealRatings Islamic Indices are available on Thomson Reuters Eikon, Thomson Reuters next-generation desktop launched late last year. The indices are also available in data feeds and other products such as Thomson Reuters Datastream.
About Thomson Reuters
Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world’s most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 55,000 people and operates in over 100 countries. For more information, go to www.thomsonreuters.com.
IdealRatings is the market leader in Shariah Compliant fund management and Purification services for financial institutions to empower them to provide, manage and monitor Shariah investment products and Shariah compliant funds based on the specialized requirements defined by their supervising Shariah board with the ability to generate the highest alpha available. IdealRatings is headquartered in San Francisco, California For more information go to www.idealratings.com.
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