Direct Answer
The DFM Sharia Index is a rule-based measurement of Shariah-compliant companies listed on the Dubai Financial Market, maintained by Dubai Financial Market. Like every index it owns nothing: it is a number produced by applying a published weighting formula to a selected list of companies, revised on a schedule the provider sets.
What this index covers
The DFM Sharia Index covers Shariah-compliant companies listed on the Dubai Financial Market, within the UAE market. Dubai Financial Market defines which securities are eligible, how they are selected from that pool, and how much each one contributes to the published number.
The index name does not state a fixed company count, so the number of constituents follows the eligibility rules rather than a target.
How constituents are weighted
Constituents are weighted by free float market capitalisation using the S&P Dow Jones Indices capitalisation weighted method. Government held shares and stakes of 5% and above are excluded from free float. Any weight above 10% is capped at the reference date, and no capping is applied between rebalances.
The weighting method is the single biggest driver of how an index behaves. Two indexes covering the same market can diverge for years purely because they weight differently, which is why comparing index levels without knowing the method tells you very little.
What qualifies for inclusion
All classes of Shari'a compliant ordinary shares on the market qualify, including dual listed companies. Bonds, sukuk and ETFs do not. Compliance comes from the list approved by the DFM Fatwa and Shari'a Supervisory Board, and a free float factor below 5% makes a company ineligible.
Eligibility rules are the part of an index most readers never look at and the part that decides what it can possibly measure. A screen that excludes a whole sector, or admits only one listing venue, shapes the result far more than any day of trading does.
When the membership is revised
The DFM indices are reviewed quarterly in March, June, September and December using market data and free float shares from the previous three months. Changes are announced with at least seven days' notice and take effect after the close of the third Friday of the review month.
Reconstitution is the one date an index changes shape by design rather than by price. Funds tracking it have to trade toward the new membership, which is why the schedule matters to anyone holding the tracker rather than only to the provider.
The rule that surprises people
A company added to or removed from the Shari'a compliant list only reaches the index at the next rebalancing, so index membership can lag the compliance ruling until that review date.
References
- Dubai Financial Market: Dubai Financial Market DFM Indices Procedures version 22 01, as published 2022. Every rule described on this page is taken from this document.
Current DFM Sharia Index constituents
Dubai Financial Market publishes and licenses the DFM Sharia Index constituent list. Swoopr does not republish it here. The provider's own page is the authoritative source for current membership and weights.
Related reading
- All stock market indexes: how indexes are built, weighted and revised.
- Emerging Markets indexes: others covering the same region.
- Index concentration: measuring how much of an index sits in its largest holdings.
- Index rebalancing and inclusion effects: what happens to a stock when index membership changes.
Frequently Asked Questions
Who maintains the DFM Sharia Index?
Dubai Financial Market maintains the DFM Sharia Index and publishes the methodology document that defines its eligibility and weighting rules.
What does the DFM Sharia Index measure?
It measures Shariah-compliant companies listed on the Dubai Financial Market. The index is a calculated number applying a weighting formula to a selected list of companies, and it holds nothing itself.
Where can I see the current DFM Sharia Index constituents?
Dubai Financial Market publishes the current constituent list. Swoopr does not republish it, because index providers license constituent data and Swoopr holds no such licence.