Would you invest in an exchange traded fund (ETF) that focused on the "Axis of Evil" terror sponsors? Sudan, Syria, Iran and North Korea have been identified by the U.S. government as sponsors of terror, and pension funds are backing off from companies that have business tied to those areas, reports Heather Bell for Index Universe.

FTSE has reacted to to this trend by entering into an agreement with Conflict Securities Advisory Corp. (CSAG) and agreeing to create indexes that screen out companies tied to these areas. The FTSE/CSAG Terror Free Index Series will launch in 2008. Screened versions of FTSE All World ex-US Index, FTSE All World Developed ex-US Index and the FTSE Emerging Markets Index are planned. The exact number of companies to be excluded is not yet known, but estimates are around 400 in the U.S. and abroad combined. Could we see terror-free ETFs in the future?