Australia’s actively-managed Islamic funds perform conservatively

With just two asset managers offering a total of eight Shariah compliant funds tracked by the IFN Investor Funds Database, performance in the Australian Islamic assets market was conservative – with the focus on ETFs and core equity strategies, which aim to serve both retail and institutional investors.

This approach by The Muslim Community Cooperative Australia and Hejaz Financial Services has allowed fund managers to attract investments beyond the southern nation’s Muslims – who constitute only 3.2% of Australia’s population.

The top fund by absolute value is that of mixed assets, with its AuM down 2.44% to AU$191.44 million (US$133.12 million) at the end of 2025 from AU$196.23 million (US$136.45 million) as at the 31^st October 2025. The second largest is a fixed income fund, rising 2.67% to AU$130.46 million (US$90.72 million) at Q4 2025 from AU$127.07 million (US$88.36 million) previously.

Coming in third was an equities fund valued at AU$109.56 million (US$76.18 million), down 2.53% from AU$112.4 million (US$78.16 million); followed by a real estate fund rising 0.55% to AU$95.89 million (US$66.68 million) from AU$95.36 million (US$66.31 million).

These offerings are overseen by the Australian Prudential Regulation Authority – but these standards, however, are tailored for conventional finance and may not fully align with the distinct requirements of Shariah compliant practices.

The lower-valued ETFs, making up the remainder half of the domestic Shariah funds industry, showed mixed performances – with two equity offerings rising 19.9% collectively to AU$20.12 million (US$13.98 million) in Q4 2025 from AU$16.78 million (US$11.67 million) previously.

The Sukuk ETF rose 0.36% to AU$5.57 million (US$3.87 million) from AU$5.55 million (US$3.86 million) while the real estate ETF dipped 18.23% to AU$11.17 million (US$7.77 million) in the latest quarter from AU$13.66 million (US$9.5 million) previously.

Overall, Australia’s Islamic public funds industry dipped 0.5% in total AuM to AU$564.21 million (US$392.60 million) from AU$567.05 million (US$394.3 million) previously. Prospects are promising as Australia is actively working to strengthen economic ties with Muslim-majority regions, including the GCC and Southeast Asia, to foster trade and investment.