According to a press release, the Dow Jones Islamic Market Sustainability Index represents companies that are compatible with Islamic investment guidelines, while at the same time are determined to be corporate sustainability leaders.
To be included in the index, companies must be components of both the Dow Jones Islamic Market Index and the Dow Jones Sustainability World Index. Currently, 105 companies are included in the index and are suitable for investors who want to apply stringent Islamic screens as well as sustainability criteria, the announcement said.
Dow Jones Indexes launched its Islamic index family in 1999. Today, the Dow Jones Islamic Market Index is used by asset managers in 16 countries for a variety of financial products that screen out activities that are incompatible with Islamic investment guidelines. Excluded from the index are stocks of companies in these lines of business: alcohol, tobacco, pork-related products, financial services, defense/weapons, and entertainment.
Also excluded, according to the announcement, are companies that fail any of three financial ratios: total debt divided by trailing 12-month average market capitalization is greater than or equal to 33% or more; cash plus interest-bearing securities divided by trailing 12-month average market capitalization is greater than or equal to 33%; and accounts receivables divided by total assets is greater than or equal to 33% or more.
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