Islamic Index
Stock index tracking only Shariah-compliant firms.
Detailed Description
Islamic Index
What are the main criteria for a company to be included in an Islamic Index?
Companies must pass a rigorous screening process that evaluates their business activities, financial ratios, and debt levels, excluding those involved in haram activities.
How do Islamic Indices differ from conventional indices?
Islamic Indices strictly exclude firms involved in activities prohibited by Islam, while conventional indices may include companies from any sector.
What is the role of a Shariah supervisory board in Islamic Indices?
The Shariah supervisory board oversees the index's adherence to Islamic principles and ensures compliance with Shariah law.
Can Islamic Indices be used for developing investment products?
Yes, Islamic Indices can serve as a basis for creating various investment products, such as index funds and ETFs, that provide diversified exposure to compliant equities.
What challenges do Islamic Indices face?
Islamic Indices face challenges such as lack of uniformity in Shariah compliance standards, subjective screening processes, potential underperformance compared to conventional indices, and limited investment opportunities.