Stoxx has launched three Islamic finance indices to help investors benefit from the nascent sharia market in the UK, according to the firm's chief executive.
The Stoxx Europe Islamic index and two blue-chip sub-indices, Stoxx Europe Islamic 50 and Euro Stoxx Islamic 50, will measure the performance of sharia-compliant companies selected from the Stoxx Europe 600 index.
Hartmut Graf, chief executive for Stoxx, said the indices were designed to act both as a benchmark for actively managed funds, and to underlie exchange-traded funds and other investable products that enable investors to participate in the performance of European companies that are adhere to the principles of Islam.
Sharia finance is based around sharing profit and loss and forbids the use of interest of profit derived from industries such as alcohol or gambling.
Mr Graf said: "The number of market participants who wish to invest in accordance with their religious beliefs, or to participate in the performance of companies that act responsibly in terms of economic, environmental and social directives, is growing constantly. Therefore Stoxx will expand its index offering in this area to meet the demand."
Michael Brill, director of Essex-based Baronworth Investment Services, said: "Sharia finance is still a niche market in the UK so anything that helps enhance understanding has got to be a good thing.
"What the indices should do is provide a benchmark for IFAs and investors as to which companies are doing well, and that has got to help."
source: Financial Times Adviser