Much ado has been made in recent months about shariah-compliant investing, especially with all the petrodollars washing around the Middle East. Muslim investors are looking for someplace to stash their billions, that's in line with Qu'ranic precepts against drinking, gambling, and the charging of interest. (So how does Saudi Prince Alaweed bin Talal become a major Citigroup shareholder? But I digress.)Anyhow, such investing has just been made easier, by the formation of the Dow Jones Islamic Market ASEAN Index. Included are shariah-compliant companies in six of the 10 ASEAN nations (Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam). It's weighted by market cap, comprises 284 firms, and will serve as the basis for exchange-traded funds (ETFs) based on the same principles.
All well and good. Too bad it's rolling out just as everyone is shying away from exotic investments of all kinds (and as the petrostates are running low on cash, thanks the plummeting price of oil). Niche ETFs are dying by the boatload because of their tiny size, and investors are all retreating to the safety of U.S. Treasuries, which are now yielding next to nothing. In comparison, funds based on shariah-compliant ASEAN companies are anything but a safe haven ... maybe that's why the index has only a single licensee thus far.
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