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8Lun·

Yesterday and today I spent some time looking into the methodology behind shariah screening for Islamic financial products.

I noticed a small detail.

As a rule, a company is screened for how much debt / interest-bearing securities it has (up to 33% is OK) and how much of its turnover is generated by:

Alcohol, Adult Entertainment, Cinema, Conventional Financial Services, Defense / Weapons, Gambling / Casino, Hotels, Music, Online Dating, Pork related products and Tobacco. (up to 5% is OK)

So there is no country screening... but you will not find a company from a specific country. Since the MSCI Islamic Index only recognizes 22 and not 23 developed countries...

Why all other MSCI indices that have "World" in their name have 23 countries, but not this one index, I can't say. Do you have any ideas? 🤔

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35 Comentarios

Goldener S.@Sindscheddin

8Lun

I just looked it up. In the normal MSCI World, the proportion of Israeli positions is 0.11% - and mainly banks. This means that all stocks actually fall through the screening.

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PowerWordChill@PowerWordChill

8Lun

@Sindscheddin das habe ich auch erst gedacht. Aber schau mal genauer hin:

MSCI ISLAMIC INDEX SERIES METHODOLOGY
https://www.msci.com/our-solutions/indexes/esg-indexes/islamic-indexes
Seite 11
Appendix 1: List of Eligible Markets
MSCI only considers securities belonging to the following list of markets for inclusion the MSCI Islamic Indexes:

Developed Markets: Australia Hong Kong Singapore Austria Ireland Spain Belgium Italy Sweden Canada Japan Switzerland Denmark Netherlands United Kingdom Finland New Zealand USA France Norway Germany Portugal

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PowerWordChill@PowerWordChill

8Lun

@Sindscheddin In addition, the Israeli stock market is largely made up of "Information Technology" https://www.ishares.com/us/products/239663/ishares-msci-israel-capped-etf
It is quite a prejudice that the Jews are only money lenders 😘

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Goldener S.@Sindscheddin

8Lun

@PowerWordChill First of all, thanks for the link. Then I was probably wrong with my statement and how I could have explained it. But it's quite a big thing from MSCI - I haven't yet found any explanation on the net or generally nothing about it.

But it's a shame that you're playing with this money-lender prejudice here. You could have saved yourself the trouble.

My approach was to call up MSCI World at iShares and then filter for the Israeli currency. And then I came up with this 0.11% and mainly banks. And I did it without any prejudice.

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PowerWordChill@PowerWordChill

8Lun

@Sindscheddin all good, it was more of a joke, I have to make fun of ALL religions, otherwise it would be discrimination 😉

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PowerWordChill@PowerWordChill

8Lun

@Sindscheddin Fun fact, Portugal should be included, but it's not. And was the only country to be completely screened out 😂 (as of 31.03.2024)

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Soprano@Soprano

8Lun

Muslims do not recognize the existence of the country they are looking for, which is why they cannot invest there. They would ask you: How can we invest in something that doesn't exist?

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Memo0606@Memo0606

8Lun

MSCI world islamic 😍 will be bought on reset

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PowerWordChill@PowerWordChill

8Lun

@Memo0606 @denver A personal question, do you really live by the rules that are screened in the ETF?
Sure, not drinking alcohol and not smoking is not a brilliant achievement.
But you don't use online dating apps, don't listen to music, don't watch movies/series, don't stay in hotels...?
I can't imagine people hanging out on a finance app in 2024.

And why are you allowed to buy a share but not a bond from the same company?

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Bugs@herrdoc

8Lun

@PowerWordChill Oh believe me, I've seen a lot of things, including people like that.

But there are also a lot of people who live "modern" lives. (That's how I would describe myself). I have a foundation (Islam), but I also orient myself to the present day. And the fact that we no longer live in the year 600 AD should be clear to any normal thinking person.
So my friends and my life doesn't look very different from yours.
Unfortunately, the media mainly shows the bad image of extremists (who, in my opinion, are a disgrace to my religion and deliberately "misinterpret" it in order to be in power). As a result, all Muslims are pigeonholed.
Unfortunately, I realize this when I have to deal with people who only know Muslims from television.

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KingC@RaphGM

8Lun

Perhaps because potential investors for such products would not invest their money in Israeli companies.

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PowerWordChill@PowerWordChill

8Lun

@RaphGM the funny thing is 5% Haram per company is allowed... even 38% if you include the debt.
But 0.15% Israel in the index is absolutely not allowed! 🤣

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Epi@Epi

8Lun

@PowerWordChill Sorry, but that's so stupid. You can't make something like that up!

5% Haram = heaven, 5.01% Haram = hell. And another joke: Allah does what he wants anyway. 😂

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KingC@RaphGM

8Lun

@PowerWordChill 🤷 Some aspects are more important than others it seems

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PowerWordChill@PowerWordChill

8Lun

@Epi I just realized that BlackRock has rules on how they name their ETFs. According to these rules, it should be called:
"iShares MSCI World Islamic ex Israel UCITS ETF"
Then there would be no misunderstandings 😂

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Bugs@herrdoc

8Lun

Anyone can invest and "boycott" as they wish. 🤷‍♂️

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PowerWordChill@PowerWordChill

8Lun

@herrdoc I am more concerned that the index provider MSCI does not clearly communicate WHY a country is missing in an index that should be included according to the definition.

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Bugs@herrdoc

8Lun

@PowerWordChill That's a different matter, of course, and I agree with you that it should be clearly communicated.

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devnerd_daddy@devnerd_daddy

8Lun

MSCI is a company that makes money from financial products. So if they can make more money by offering a product tailored to extremists, then of course they will.

There is also an MSCI World Catholic Values if you prefer to be a Catholic extremist.

Why extremist? I'm a relatively strict Christian myself, but if you sort that heavily when investing, where do you stop? Then I would also have to withdraw my money from the bank so that they don't lend it to a nasty Satanist.

But hey, as long as MSCI is making money by double standards, why not? Maybe it makes the investors happy? Who am I to judge them?

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Bugs@herrdoc

8Lun

@devnerd_daddy I agree with you that MSCI only wants to make money.
But to speak directly of extremism... I don't know.
There are people who don't want to invest in oil companies, others don't want to invest in the arms industry, and so on. Does that mean they are green?
Life is not just about making money, you can (in my opinion you should) also invest morally when investing.
And whether you don't want to support a country's economy is up to you.

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devnerd_daddy@devnerd_daddy

8Lun

@herrdoc In my opinion, there are differences. I don't invest directly in oil or weapons either, but I know that some of my actions on the stock market or in real life have to do with that and I accept that. I don't invest in China either, but I generally like the Chinese and if BASF trades in China, that's totally okay.

But we are talking here about people who openly propagate a "don't buy from Jews" lifestyle in their daily lives. We've had that here before and yes, that is extremism. And even if you leave that part out of it, it's still completely bigoted, because in today's interconnected world, you have to live alone in a cave if you want to push your ideals everywhere.

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Bugs@herrdoc

8Lun

@devnerd_daddy I don't think you can make a blanket statement that someone is against Jews if they are against Israel. I've spent half my life there and I know what it's like to live in the country if you don't belong to the "chosen" group. So I can understand why people don't want to invest in Israel.
And it's similar with Russia right now. Is it bad now that we are no longer investing in Russia?

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devnerd_daddy@devnerd_daddy

8Lun

@herrdoc You can't say that across the board, but in this particular case you can. If I don't invest in Russia or China because they are unpredictable autocracies, then that is legitimate, understandable and objective. If I name an index "Islamic" and then suddenly a country is missing, you don't have to have much imagination as to why. It's just bigoted extremism.

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Enrique@Dividenden_Monteur

8Lun

Has Sully blocked you yet? 😏😁

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PowerWordChill@PowerWordChill

8Lun

@Der_Dividenden_Monteur no why should he, we are all adults and enlightened people 😉

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Epi@Epi

8Lun

@PowerWordChill "Enlightened"? Guess which religion has not yet been enlightened...

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PowerWordChill@PowerWordChill

8Lun

@Epi Almost everyone?

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Epi@Epi

8Lun

@PowerWordChill Correct. Only one has done it to itself, the most fought and persecuted religion in the world. Freedom, self-thinking and self-responsibility are just really hard.

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Philip@PhilT

8Lun

Wait so buy or no buy?!

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John@arvabu

8Lun

Indexe? Really? Come on..

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PowerWordChill@PowerWordChill

8Lun

@arvabu improved it, thanks 😘

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tipico@tipico10

8Lun

In your opinion, which Israeli company should be involved?

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Ecoinvestment@Ecoinvestment

8Lun

Comentario eliminado

PowerWordChill@PowerWordChill

8Lun

@Ecoinvestment Now comes the next one... YOU could have done some research 😛

That's what I thought at first. But take a closer look:

MSCI ISLAMIC INDEX SERIES METHODOLOGY
https://www.msci.com/our-solutions/indexes/esg-indexes/islamic-indexes
Page 11
Appendix 1: List of Eligible Markets
MSCI only considers securities belonging to the following list of markets for inclusion the MSCI Islamic Indexes:

Developed Markets: Australia Hong Kong Singapore Austria Ireland Spain Belgium Italy Sweden Canada Japan Switzerland Denmark Netherlands United Kingdom Finland New Zealand USA France Norway Germany Portugal

In addition, the Israeli stock market is largely made up of "Information Technology" https://www.ishares.com/us/products/239663/ishares-msci-israel-capped-etf
😘

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Ecoinvestment@Ecoinvestment

8Lun

@PowerWordChill ok, I had only looked at the MSCI. Mea culpa

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