Dow Jones Islamic Market
S&P Dow Jones Indices' Shariah methodology with a 24-month smoothing window.
DJIM uses a 24-month trailing average market cap as the denominator. This smooths short-term volatility and tends to produce more stable verdicts than methodologies that use trailing market cap. Three financial ratios each below 33%.
What it is
The Dow Jones Islamic Market Index series, launched in 1999, was the first global Shariah index family. It uses a panel of Shariah scholars to vet methodology updates.
How it differs from AAOIFI
DJIM uses 24-month trailing average market cap (vs AAOIFI's trailing). Thresholds are slightly more permissive at 33% (vs AAOIFI's 30%). Result: a stock with volatile market cap can pass DJIM more easily than AAOIFI.
Who uses it
HLAL (Wahed FTSE USA Shariah ETF), several SP Funds Shariah-compliant ETFs, and most global Islamic index funds. The ETF industry's de-facto standard.
Financial ratios
- Interest-bearing debt / 24-mo avg market cap< 33%
- Cash and interest-bearing securities / 24-mo avg market cap< 33%
- Accounts receivable / 24-mo avg market cap< 33%
- Non-permissible income / Total revenue< 5%
Who uses it
- HLAL ETF
- iShares MSCI USA Islamic ETF (some overlap)
- Numerous global Islamic equity funds
Sources
- Dow Jones Islamic Market Indices Methodology
- S&P Dow Jones Indices, current edition
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