Shariah ESG funds perform better in Europe

GLOBAL: Shariah compliant ESG funds recorded growth concentrated in a few key European domiciles for Q3 2025, according to trends tracked by the IFN Investor Funds Database. The Republic of Ireland led ESG growth, with AuM rising 13.89% to US$271.67 million from US$238.54 million in Q2 2025. Luxembourg followed with an 8.21% increase, lifting AuM to US$190.08 million from US$175.67 million while Germany posted a more modest gain of 3.81% to US$62.7 million from US$60.4 million.

In Asia, ESG assets contracted in Indonesia – declining 14.03% to US$12.64 million from US$14.7 million. Malaysia recorded a slight pullback of 4.24% at US$542 million from US$566.02 million– suggesting shorter-term rebalancing in Asian markets as Hong Kong posted gains of 5.79% to US$10.97 million from US$10.37 million.

Overall, the Islamic ESG performance in Q3 2025 underscores a cautious yet persistent global shift, driven by selective markets rather than broad-based expansion. 

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