BlackRock adjusts Islamic ETF following Microsoft addition

New 20% limit

BlackRock has changed the methodology of its global Islamic ETF following the addition of Microsoft to its index, which led to a tracking error that could not be corrected within its original methodology.

The $390m iShares MSCI World Islamic UCITS ETF previously used a non-replicating investment strategy, meaning it aimed to track the benchmark, while not being required to match it exactly. However, Microsoft was added to the fund's benchmark - the MSCI World Islamic index - on 1 December. It had been previously excluded due to financial ratio screens in the methodology of the index. BlackRock AUM drops 14% despite strong inflows After doing so, the firm became 13% of the index, in excess of the 10% limit imposed by a non-replicating strategy. This meant the fund was unable t...