Egypt’s Shariah AuM rockets on economic stabilization

• Total Shariah fund AuM more than doubled to US$103.91 million on economic momentum
• IMF funding and 4.2% GDP growth forecasts fuel market optimism
• Diversity of Egypt's Shariah funds proving traction of ethical, asset-backed investing

Overview

The Egyptian burgeoning Shariah fund market boomed 145% over the past year, according to data tracked by the IFN Investor Funds Database, riding a wave of macroeconomic stabilization and underpinned by gold holdings.

The surge came as Cairo received IMF’s green light on its fifth and sixth reviews, signaling that Africa’s second largest economy had met necessary reform milestones to receive its next wave of funding for US$2.3 billion.

Egypt’s inflation trajectory showed significant movement over the past year, characterized by declines through 2025 that led to a low point at the start of this year. Annual urban headline inflation was 13.9% in April 2025, falling to 11.9% in January 2026, before stabilizing at 13.4% by February on pre-Ramadan food price hikes and education fee increases.

The Central Bank of Egypt, in response, is expected to bring interest rates, now in a range of 19-20%, towards 18% by June to provide relief for Egyptian citizens and businesses.

Egypt’s economy is forecast to grow 4.2% this year by the World Bank, against a sovereign ‘B’ rating by Fitch that assigns a stable outlook for its credit. S&P Global is forecasting a 4.8% GDP acceleration by fiscal 2026, buoyed by a resilient tourism sector and a steady drip of private investment.

Egypt's Financial Regulatory Authority values the domestic investment fund industry, including conventional funds, at between US$1.85 billion to US$2.1 billion.

On the Shariah front itself, there is a palpable shift from defensive hedging to tactical growth as the market matures beyond its niche origins, growing from an AuM of US$42.37 million in Q4 2024 to US$103.91 million by Q4 2025.

Asset spread

Commodities have emerged as the market’s heavy hitter, accounting for nearly half of all Shariah compliant assets. One fund alone – AZ-Gold, run by Azimut Egypt – owns all of the nearly US$51 million invested in the commodities asset class, and accounts for 48.8% of the country’s entire Shariah asset base.

The rest of the landscape is a mix of tactical liquidity and equity bets.

Money market instruments hold US$30.54 million across four funds, providing a parked-cash solution that captures 29.4% of the market.

The equities sector has equal representation, with four funds managing a combined US$17.36 million.

While the equity AuM is smaller than commodities, the performance is punchy – the Misr Index Sharia Equity Fund closed the quarter with a blistering return of nearly 25%.

The diversity of Egypt's Shariah funds is proving that ethical, asset-backed investing is no longer a peripheral interest.

Chart: Egypt Shariah funds by asset class, AuM and fund count

Performance

The AZ-Gold fund from Azimut Egypt has become the go-to vehicle for investors looking to capitalize on gold’s record run above US$4,000 an ounce, as well as those looking to hedge against currency volatility via physical exposure to the commodity.

The country’s largest Islamic fund, with AuM of US$50.69 million, was launched in May 2023 to provide a secure, regulated and Shariah compliant alternative to buying physical bullion.

As a mutual fund dedicated to physical gold investments, AZ-Gold follows a passive investment strategy. Its physical asset backing is 100% made up of 24-karat gold bullion, unlike the "paper gold" or synthetic assets of precious metals ETFs.

Table 1: Top 10 Egyptian Shariah funds by AuM

The Misr Index Sharia Equity Fund recorded the highest quarterly performance with returns reaching 24.79% in Q4 2025.

Misr, managed by CI Capital Asset Management, was launched in July 2024 to provide investors with direct exposure to the Egyptian stock market while strictly adhering to Shariah principles.

The fund operates as an index tracker, primarily targeting the EGX33 Shariah Index, which consists of the 33 most religiously compliant and liquid companies listed on the Egyptian Exchange. Misr typically maintains 30% to 95% of its assets in equities, with the remainder held in highly liquid, Shariah compliant instruments like treasury bills and bank deposits, or Sukuk to manage liquidity and volatility.

Table 2: Top five Egyptian Shariah funds by returns

Outlook

The outlook for Egypt’s Shariah market remains robust as the country’s economy is projected to grow 4.2% this year, backed by a stable credit rating.

S&P Global’s optimistic 4.8% GDP acceleration forecast for fiscal 2026 suggests that a resilient tourism sector and private investment will continue to drive liquidity. The Central Bank of Egypt’s planned reduction of interest rates toward 18% by June is expected to stimulate further business activity.

As inflation concerns remain, investors are likely to maintain high exposure to gold-backed vehicles to hedge against lingering volatility, even as equity funds offer high-growth opportunities.

Ultimately, the maturation of these funds indicates that Shariah compliant investing is progressing from a niche segment to potentially become a pillar of Egypt's long-term investment landscape.