In January 2026 the FTSE Yasaar Global Equity Shariah Index Series celebrates its 20th anniversary.
Over the two decades of its existence, this equity benchmark family—established in 2006 via a partnership between FTSE Russell and specialist Shariah consultants Yasaar Limited—has established itself as a key part of the fast-growing Islamic Finance industry. Today, the number of indices within the FTSE Yasaar Shariah Index family exceeds 150 and continues to grow.
Growth of Islamic Finance
In a recent report, the London Stock Exchange Group (LSEG) forecasts that Islamic finance assets worldwide will approach the $10trn mark by the end of this decade, a rapid rate of growth for a relatively new industry: Islamic finance assets only surpassed $1trn in 2010 and reached their second trillion in 2014.
The Islamic finance industry has now expanded its footprint to 140 countries, says LSEG, and its asset growth is not just a reflection of the growing savings of the world’s Muslim population.
While Muslim-majority countries in the Middle East and Southeast Asia continue to dominate the industry, developments and growth in other markets continue. This is in large part because of the intrinsically ethical nature of Shariah finance (Islamic equity indices screen out companies involved in conventional finance, alcohol and intoxicants, gambling, weapons, arms and defence manufacturing).
In particular, the United Kingdom, LSEG’s and FTSE Russell’s home market, is now a key hub for listings of green and sustainable sukuk (Islamic debt instruments).
Figure 1: Islamic finance assets growth
The FTSE Russell/Yasaar partnership
The FTSE Yasaar Global Equity Shariah Index Series is based on FTSE Russell’s flagship global equity benchmark, the FTSE Global Equity Index Series (FTSE GEIS). The starting set of companies included in the FTSE GEIS is then screened for Shariah compliance (compliant with the precepts of Islamic finance) by Yasaar.
Majid Dawood, Yasaar’s founder and chief executive, explains the distinctive features of an Islamic approach to equity investment.
“Islamic finance is about financing real growth with real money,” says Mr Dawood.
“Money shouldn’t make money: building things should make money and selling things should make money.”
“One of the important ideas in Islam is that you cannot sell fruit from a tree before it has appeared. That’s because you don’t know what the result will be and whether the tree will produce fruit at all.”
“So Islamic finance is about selling what you have, not what you might have in future.”
These principles are embedded in the FTSE Yasaar Global Equity Shariah Index Series rules in two ways: business activity screening removes companies involved in undesired activities and financial screening removes companies with excessive reliance on debt, interest or leverage.
Importantly, Yasaar has always had a conservative approach to screening: for example, it ensures Shariah compliance by rating debt ratio limits as a percentage of total assets (rather than as a percentage of trailing market capitalisation, which is a more volatile measure).
Yasaar’s screening process is also overseen and monitored by the company’s Shariah board, which reviews and audits the screening process at regular intervals. Shariah-compliant constituents are updated daily and audit trails or any changes to a company’s Shariah status are available to the Board for review.
Performance in line with the global equity market
The primary use cases of the FTSE Global Equity Shariah Index Series are as a reference benchmark for the performance of Shariah-compliant equity portfolios, and as an underlying performance target for investment products that meet the requirements of Islamic investors.
If the investment performance of the indices within the series is secondary to these requirements, in practice the net financial impact on a global equity investor of preferring a Shariah approach has been marginal.
The total return of the FTSE Shariah All-World index over the two decades since its launch has been very much in line with that of the FTSE All-World index (the most widely used investable benchmark from the FTSE Global Equity Index Series).
Figure 2: Two decades of the FTSE Shariah All-World Index
Poised for further growth
As the FTSE Yasaar Global Equity Shariah Index Series embarks on its third decade, what lies ahead?
The prospects for the Islamic finance sector seem bright: Islamic finance services are now available in a range of markets around the world, the sector can now compete directly with its conventional counterparts, and there is healthy product innovation in the form of digital sukuk, Islamic fintech and further integration with other sustainable finance approaches.
The demand for indices and benchmarks that embed Islamic investment principles could therefore grow substantially further in the coming years.
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