Microsoft was added with a 13% weighting
BlackRock’s world Islamic equity ETF has switched from optimised sampling to full replication after the outgoing methodology risked the product incurring tracking error versus its underlying index, ETF Stream can reveal.
Launched in 2007, the $390m iShares MSCI World Islamic UCITS ETF (ISWD) employed an optimised sampling tracking strategy, meaning it does not have to hold all the securities in its benchmark and may allocate no more than 10% of its basket to a single stock.
This became problematic after Microsoft entered the MSCI World Islamic index with a weight of 13% on 1 December 2022, meaning ISWD would not gain proportionate exposure to the company.
Microsoft was previously excluded from the benchmark based on financial ratios screens in the index…
