Spanning the dawn and setting of Ramadan, the Islamic world saw a bump in assets under management (AuM) amid multiple Shariah compliant offerings and investment opportunities, including assets such as diamonds and gold.
Global fund standings
The IFN Investor Funds Database showed total Shariah compliant AuM worldwide passing the US$460 billion mark on the 17th March 2025. A total of 467 fund management firms managing 2,494 public Islamic funds reached this milestone.
The Middle East’s Islamic investment sector maintained its strong momentum at pole position, with Asia Pacific being the second-largest region for Islamic funds and Europe ranking third globally as at the end of 2024. Interestingly, Luxembourg’s local asset managers handled US$1.83 billion in Islamic funds AuM while international asset managers managed almost triple that amount at US$5.36 billion at the end of Q4 2024.
Malaysia’s Islamic capital market grew 8.5% year-on-year (y-o-y) to command 63.04% of the overall RM4.12 trillion (US$945.84 billion) capital market at the end of 2024.
Funds in hotspots
While US President Donald Trump’s war against renewable energy intensified in his second term of office, some fund managers like Nomura continue to see funding opportunities and trading momentum in the space, which also includes Islamic plays. Even as sustainable investing policies come under more heat in 2025, experts say dissociating Islamic equity funds from ESG issues will not really help.
Meanwhile in Russia and Iran, where sanctions are still enforced, Islamic investments have gained in appeal. The success of Russia’s Islamic banking pilot project is drumming up demand and pushing players to offer Shariah compliant investment avenues, experts told IFN Investor.
In an interview with IFN Investor, Parto Aftab Kian Investment Advisory’s CEO Mehdi Tahani shared that due to pressures on the Iranian economy, the firm had pivoted its investment strategy to gold instead of equities, and this has paid off.
The UK’s Al Rayan Bank surveyed high net worth individuals across the GCC and found that all are keen to make new investments in, or widen their exposure to, the UK’s property market over the next five years, committing to spend an average of US$92 million. There is potential for many of these transactions to be structured Islamically.
New offerings
More entities have entered the Islamic space as they begin rolling out Shariah compliant products.
Retirement plan platform Common Wealth added the Mackenzie Shariah Global Equity Fund to its offerings, which include products from fund managers like BlackRock, RBC Wealth Management and Blumont Annuity.
Over in Saudi Arabia, investments via P2P platform The Lending Hub have been declared Shariah compliant, following due certification of this outfit’s business model by Shariyah Review Bureau.
Kuwaiti investment manager KIB Invest shared plans to complement its latest Islamic fund – its first in the local currency space – with strategies in other currencies to provide investors with diversification.
Egypt’s Al Baraka Capital announced plans to launch a new Shariah compliant fund during H2 2025. This EGP50 million (US$987,103) fund will invest in EGX33 Shariah index companies, said Managing Director Sarah Hosni.
Wealthvest said it is launching the Shariah compliant Wealthvest Shariah Equity 27four Fund – which aims to achieve both capital and income growth by investing in both South African and foreign-listed equities.
AmFunds Management (AmInvest) launched the AmIslamic Global REITs Fund, which will be offered in both Malaysian ringgit and US dollar.
The Al-Watani Sukuk Fund by Watani Wealth Management and the Derayah Nomu Market Fund public offerings were approved by Saudi Arabia’s Capital Market Authority. Fund manager Derayah Financial Company made its debut on the Tadawul market on the 11th March.
Regulatory enhancements
Regulators in key Islamic markets are reforming their investment infrastructure in pursuit of a more efficient ecosystem. The Qatar Stock Exchange waived its trading fees on exchange-traded funds (ETFs) from the 16th March to enhance market liquidity. This move reduces the total ETF trading cost from 27.5bps to 22bps.
Meanwhile, the Securities and Exchange Commission of Pakistan proposed an alternative dispute resolution system, like mediation and arbitration models, stating that traditional legal systems and courts may not always fully align with Islamic principles, which could then lead to outcomes that are not Shariah compliant.
The Saudi CMA proposed to lift the corporate shield for SPVs typically used for issuing Sukuk in a bid to deepen the market.
Investments and opportunities
A consortium of Islamic banks will be exploring how diamond units standardized as coins and bars, akin to precious metals of gold and silver, which can be a high-value commodity to back Shariah compliant transactions.
Pakistan’s Salaam Family Takaful is banking on a newly introduced custodianship feature in its life insurance policies to win the trust of more investors.
Confidence in Islamic assets is reflected by how, despite Nigerian investor sensitivity to returns often prioritize higher returns over other factors, Cordros Asset Management is bullish that demand for Shariah compliant investments will increase, with more options to be launched in the next five to 10 years.
This level of confidence is also reflected by the February 2025 opening of Apex Group’s regional headquarters in Riyadh, which caps an effort that began in May 2024 and presented unexpected Shariah opportunities for this group.
Digital assets
Tokenization and cryptocurrencies are gaining interest among Islamic investors; we learned that new Bahraini digital exchange ATME will launch a Shariah compliant arbitrage fund token in May 2025, while Malaysia’s Halogen Capital launched another bitcoin fund, bringing its number of Shariah compliant crypto funds to four.
Meanwhile, the Securities Commission Malaysia is collaborating with Khazanah Nasional to introduce the tokenization of bonds and Sukuk this year to broaden retail participation in the country’s capital market.
Deals
Islamic deals took place in the GCC and Malaysia. Dar Global, which recently launched the Trump Tower Jeddah and Neptune by Mouawad in Riyadh, is investing in two strategic development land sites in Jeddah and Riyadh with a total valuation of US$390 million. Hassana Investment, which invests on behalf of Saudi pension fund General Organization for Social Insurance, completed the acquisition of a 40% stake in Berain Water, in a deal advised by Shariah compliant SNB Capital.
UAE asset manager Gulf Islamic Investments (GII) aims to double its existing US portfolio of US$750 million through GII Saudi Arabia in the next four years, focusing on the logistics, education and food production and processing sectors. Meanwhile, Sidra Capital completed the sale of its UK property to the Republic of Italy.
In the equity capital markets, a Malaysian Islamic IPO is in the making as WTEC Group prepares to list on the ACE market with the help of principal adviser, sponsor, sole underwriter and placement agent Alliance Islamic Bank.
Fintech
Fintech companies are driving Islamic investments in non-traditional markets: digital Islamic savings platform Perenys is working on new solutions on the back of increasing appetite for Shariah compliant investment products in France while Shariah stock screener Musaffa’s goals for 2025 include getting a registered investment advisor license in the US, rolling out a Halal trading platform in the GCC and launching ETFs.
JazzCash, a mobile payments company in Pakistan, launched its new Shariah compliant in-app investment offering, Salaam Investments.
The UK’s Financial Conduct Authority authorized Offa, a portfolio company of GII, to provide home purchase plans – a Shariah compliant alternative to conventional residential mortgages – for customers across the UK.
Shariah compliant debt-based crowdfunding platform Ethis Group is awaiting final greenlight from the Turkish Capital Markets Authority to be the first such investment outfit in this nation.
Online developments include funds platform Tillit adding two more Shariah compliant offerings, while Arbah Capital further inked a deal to offer its Shariah compliant funds on the new digital investment platform Nama.fund, which is currently in the beta stage.
Rebranding
Following the takeover by Pakistan manufacturing conglomerate Yunus Brothers Holdings, Interloop Asset Management completed its renaming as Lucky Investments, which will be operating as a Shariah compliant firm.
Standard Life Aberdeen is reverting to its earlier branding of Aberdeen Group, CEO Jason Windsor revealed in the firm’s 2024 annual report. The asset management firm, which has several Shariah compliant offerings, had rebranded to abrdn in 2021 under former CEO Stephen Bird. Jason replaced Stephen in May 2024 as interim CEO and was confirmed in this post in September 2024.
Moves
Tariq Ali joined Pakistan’s Meezan Bank as the head of investment banking and Shariah advisory and First Punjab Modaraba appointed Asim Jahangir Seth as the company’s new CEO. Malaysia’s AmanahRaya Real Estate Investment Trust redesignated Mohd Iskandar Dzulkarnain Ramli from alternate director to its new managing director and Bahrain’s GFH Financial Group assigned Chief Risk Officer Bhaskar Mehta as acting CFO following the departure of Surya Hariharan.
