(CNSNews.com) - Wall Street investors concerned their dollars might end up in the hands of terror-sponsoring governments can now rely on a "terror-free index" for guidance.

Such a stock index could spark a growing market as 19 states either have passed or have pending legislation to divest public employee pension funds from companies that do business in countries such as Iran, North Korea, Sudan, Syria and Cuba: the five countries listed by the U.S. State Department as sponsoring terror.

In recent years, Florida, Missouri, Illinois, Louisiana and California led the way in divesting government money from firms working in those terror-sponsor countries. The state legislation varies, with some bills targeting one country such as Iran, while others target all or some of the countries on the State Department's list.

This year, states such as New York, New Jersey, Massachusetts, Georgia, Texas, Maryland and Pennsylvania are considering divestment bills.

The FTSE Group (FTSE), a global index company, and Conflict Securities Advisory Group (CSAG), an investment research firm, introduced the index on March 31.

The index is designed to "screen out companies with active or current non-humanitarian business ties in or with countries that expose them to global security risk."

"FTSE and CSAG identified demand from institutional investors in the U.S. for the option to invest terror-free and have introduced this new index series to meet it," said FTSE American President Jerry Moskowitz and CSAG President Roger Robinson in a joint written statement.

There are 485 publicly traded companies that operate in the five countries designated by the U.S. State Department as state sponsors of terrorism. The companies are overwhelmingly foreign-owned, according to CSAG.

The Divest Terror Initiative, a division of the conservative Center for Security Policy, has listed a "Dirty Dozen" of the firms that do the most business in countries designated as state sponsors of terrorism.

The index is a big step for the movement to keep money from flowing to terror sponsoring countries, said Chris Holton, director of the Divest Terror Initiative.

"Mainly the credit for this goes to the state legislatures," Holton told Cybercast News Service, who added that divestment hasn't harmed returns on pension investments in states that have passed the laws.

Previously, an index of companies for investors included companies that did business in terror-sponsoring states combined with firms that did not conduct business in such countries. This made divestment difficult, Holton said.

"The biggest obstacle we have faced in states is that we didn't have an index," he said. "People would tell us you can divest from a company, but you can't divest from an index."

According to a 2004 Divest Terror report, the top 100 public pension systems in the United States invest more than $188 billion in countries listed as state sponsors of terrorism.

The average top pension system invests in 73 companies doing business in Iran, 26 companies doing business in Sudan, 31 doing business in Syria, nine doing business in North Korea, and 24 doing business in Libya, which was removed the state sponsors of terror list in May 2006.

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