A database tracking only Shariah compliant funds and operators did not receive much focus until the RedMoney Group, which has been covering Islamic finance for over 20 years, embarked on this initiative about a year ago and officially launched the subscription platform in August 2024.
Since then, this IFN Investor Funds Database has grown considerably to cover publicly available information to report on a total of 2,403 Islamic funds offered by 450 asset managers across 30 countries and 24 currencies – with the data accurate as of the 5th December 2024.
We are continuing to collate and update on a regular basis available information either provided by or obtained directly from Shariah compliant fund operators – may they be private or public entities – while progressively addressing various challenges.
Among the key hurdles overcome, to some extent, are language barriers – from Arabic to Persian to Turkish, plus the various written forms in Africa, Asia and Europe. Our database ensures critical information is presented in both English and the native language, where appropriate.
Although data from the Americas would currently be limited, given there is no widespread push in this region to foster and grow Islamic investments – rather than adaptations based on Shariah principles – promising signs indicate a huge potential is brewing and waiting to be tracked.
Valuations
According to the IFN Investor Funds Database, Shariah compliant investments charted a major landmark in November 2024 with the total value of assets under management (AuM) at public Islamic funds operating around the globe surging above US$400 billion.
The data showed the largest Islamic financial markets globally to be Iran, Saudi Arabia, Malaysia and Türkiye. Iran led the market valuation with an AuM of US$265.4 billion as at the 5th December 2024, with 472 funds.
This scenario has since shifted significantly, due to developments related to Iran’s currency exchange rate. The Central Bank of Iran (CBI) quietly dropped the longstanding IRR42,000 exchange rate official pegged to the US dollar as of the 31st May 2024 – but this change has yet to be reflected in most jurisdictions with little or no dealings with Iran, following international sanctions.
The CBI daily exchange rate posts showed a downward fluctuation, to each US dollar obtaining over IRR400,000 in December 2024, Iranian funds total AuM may have dropped in comparative terms. As these funds still operate normally to serve local investors, Iran keeps the high fund count mantle.
This shift should elevate Saudi Arabia to become the largest Islamic funds market by valuation, managing US$38.99 billion through 280 funds, reflecting its strength backed by petroleum proceeds. Malaysia is next, with US$31.99 billion in assets and 575 funds, the highest number globally, supported by its mature Islamic finance ecosystem.
Türkiye follows, managing US$22.95 billion with 252 funds, driven by growing local demand and supportive policies. These major jurisdictions collectively cover over 80% in the Islamic funds market, on the basis of Iran’s nominal AuM.
Chart 1: Top global Islamic funds countries, by fund count
Source: IFN Investor Funds Database
Chart 2: Rest of global Islamic funds markets, by AuM
Source: IFN Investor Funds Database | Values in US$ millions
Asset class trends
Chart 3: Islamic funds breakdown by asset class
Source: IFN Investor Funds Database
Islamic funds data on a global scale puts the fixed income asset class at the top of the list with an AuM of US$179.17 billion, due to the previous valuation of funds from Iran – which are heavily invested in the fixed income class, followed by equities and mixed asset funds.
Commodity funds also contribute a large portion in the Islamic space with over US$23 billion.
Chart 4: Islamic funds breakdown by asset class (excluding Iran)
Source: IFN Investor Funds Database
Excluding data from Iran, Islamic equity funds emerged as the top-performing asset class, followed closely by money market and real estate funds. Notably, the IFN Investor Funds Database also incorporates the launch of three Shariah compliant cryptocurrency funds in Malaysia during Q4 2024, with a combined valuation of US$9.63 million.
Sukuk and Islamic fixed income funds have seen remarkable growth, with AuM rising by approximately 15% on an annualized basis, from Q4 2023 to Q3 2024. Additionally, the commodities market continues to hold a significant share, bolstered by substantial investments in Türkiye.
Fund type trend
Exchange-traded funds (ETFs) have experienced growth, driven by rising demand from investors seeking low-cost diversification. According to the IFN Investor Funds Database, there are currently 291 ETFs with a combined AuM of US$101.48 billion, accounting for approximately 24.95% of global AuM.
The number of Shariah compliant ETF funds increased by 10.23% from Q4 2023 to Q3 2024. Many of these funds originate from the Middle East, particularly Iran, alongside growing interest in non-Muslim jurisdictions such as the UK and North America.
Retirement funds also represent a significant portion of global AuM, contributing US$9.82 billion. By the number of funds, Türkiye accounts for nearly 48% of the total, while its AuM is a standout, reaching US$8.87 billion. Growth and income funds share a similar number of offerings at 575 and 504 respectively and a combined AuM of US$87.10 billion.
Outlook
While the current total AuM of Shariah compliant funds is reflected in the billions of US dollars, compared to trillions in the conventional funds market globally, the prospect looks positive – especially in the Middle East, where Saudi Arabia is forging ahead with major infrastructure projects.
In an emerging shift from using Sukuk as a debt instrument into more creative securitization of contract financing to fund projects, the scope of Islamic funds looks set to grow in size over the next decade.
The tax-free regime long enjoyed by GCC countries is also vanishing as oil-based revenues get redeployed to spur other sustainable economic sectors as natural resources become depleted. Managing tax burdens with retirement funds and savvy wealth management opens up more opportunities for the Islamic funds landscape to thrive.
With this outlook, the IFN Investor Funds Database will seek to expand our tracking to further include private credit and alternate investment funds, together with newer asset classes that should be making their debut soon.
