Crescent Wealth, the Australian Islamic investment manager, and Thomson Reuters, the global intelligence service, have launched a new Islamic investment index in a move that strengthens Australia's position as a hub for global Islamic funds and family offices.

The Thomson Reuters Crescent Wealth Islamic Australia Index covers 143 equities with a combined market capitalisation of A$160 billion ($168 billion). The firms said it is the first benchmark index to screen ASX-listed companies for compliance with Shariah investment principles. The quarterly review utilises the Thomson Reuters screening system and excludes institutions with high levels of debt or leverage, such as property trusts and other stocks that conflict with Shariah practices. 

"Shariah" refers to the moral or religous code of ethics under Islam, which prohibit the earning of interest, as well as investing in businesses that provide goods or services that are against the code. 

"There is a huge untapped potential to grow Islamic-compliant investment in Australia from investors around the world, in particular in Asia and the Middle East. This index gives these investors a local performance benchmark for the Australian market," said Talal Yassine, managing director of Crescent Wealth. 

Islamic banking assets globally now exceed $1 trillion and could reach $4 trillion by 2020, the investment manager said. There is also $50 billion in managed funds investing in equities according to Shariah principles.