(August 21 – 15:00 ET) – Dow Jones Indexes is making two changes that affect the Dow Jones Islamic market indexes. Both changes will become effective at the start of trading on Monday, September 18.
The company says the Dow Jones Islamic market index and its eight sub-indices will be weighted by “free-float” market capitalization. As well, the maximum weighting of any single stock in five sub-indices (Japan, Asia/Pacific, Europe, U.K. and Technology) will be capped at 10%.
“Free-float” weighting means that each component stock’s weighting in the indexes will be based on the number of shares that are available to investors in the market, rather than on the total number of shares issued.
The company says the new rule capping a stock’s index weight at 10% prevents the indexes from being dominated by large stocks. The 10% cap will be applied individually to the Islamic market and sub-group indexes.
“These timely changes are our response to market demand,” said Michael A. Petronella, managing director of Dow Jones Indexes. “Moreover, Dow Jones Islamic Market Index weighting methodology will be uniform with the Dow Jones Global Titans and Dow Jones Global Index family.”
The Dow Jones Islamic Market Index contains 636 stocks. Sub-index components include 234 stocks in the Dow Jones Islamic Market U.S. Index, and 32 stocks in the Dow Jones Islamic Market Canada Index.
The Dow Jones Islamic Market Index represents companies that follows Sharia`ah Law investment guidelines. The Dow Jones Islamic Market Index tracks Shari`ah Law-compliant stocks from 34 countries with total market capitalization of nearly $10 trillion.
-IE Staff