Move away from static regional allocations, BlackRock tells Islamic investors

In the current environment of stubborn inflation, geopolitical fragmentation, energy (in)security and AI-driven capital spending, BlackRock is advising Islamic investors to “diversify diversifiers” rather than simply de-risk.

Shariah-conscious investors need to move away from “static regional allocations and adopt a more dynamic, multi-asset framework built around resilience, income durability and geopolitical diversification”, Keith Saldanha, BlackRock’s head of wealth and global product solutions for the Middle East and Africa, tells IFN Investor.

The ongoing Iran-US war, which has reached 100 days, is a valuable lesson in regional and sector differentiation rather than broad emerging market exposure.

For Sukuk and the fixed income space, it is no longer a duration play – it is decisively about carry and income generation, shares Keith.

“We continue to be cautious on long-duration developed market government bonds given structurally sticky inflation, elevated debt burdens and higher term premia,” he explains, adding that US dollar Sukuk and selected emerging-market debt offer attractive income opportunities supported by elevated real yields and diversification benefits.

While it is no surprise that GCC Islamic equities continue to anchor Shariah investors’ portfolios (given their energy-lined cash flow resilience and generally lower leverage profiles relatives to developed markets), the multitrillion dollar asset manager is also putting its money into alternatives.

“We see particular opportunities in infrastructure and private markets tied to structural themes such as AI, electrification, energy security and supply chain resilience,” remarks Keith.

A most interesting alternative asset class, however, is digital assets – one that is gaining unprecedented momentum among investors. The multitrillion dollar firm has moved to capitalize this appetite with its iShares Bitcoin ETP or IB1T, which generated an asset base of nearly US$895 million as of the 5^th June 2026 since its March 2025 launch. Strategically, BlackRock designed the vehicle as Shariah compliant to capture GCC institutional demand for alternative stores of value.

At the end of the day, three forces drive the firm’s strategy: active positioning, selectivity and flexibility.