Over the last 10 years Shariah compliant funds have seen significant growth, both in terms of the number of funds as well as assets under management (AuM). Rapid developments in the Islamic finance industry, have led to an increasing number of Shariah compliant funds employing different strategies and investing across new asset classes, representing the progress and advances made in the Islamic finance sector. In this report we discuss the key trends observed in the Islamic funds industry since 2000.
The primary goal of Islamic funds is to engage in 'ethical investing' into products and companies compliant with Islamic guidelines. As such, Islamic funds are wealth management vehicles catering to investors wanting exposure to capital markets inside a Shariah framework; the key distinguishing factor from other conventional funds.
Currently, the total number of Shariah-compliant investment vehicles is estimated to be 717, with assets standing just over US$77 billion.
Figure 1: Industry growth since 2000
The Islamic fund sector underwent strong growth in 2007 witnessed by the launch of 180 funds
however subsequent years have seen ...