Shariah retirement funds boom as precious metal pricing hits record highs

• Commodities now dominate assets of Shariah retirement funds
• Record gold prices contribute to largest fund; silver shapes best industry returns
• Sector growth seen continuing despite challenges of diversification

A US$29.3 trillion industry just a decade ago, the universe of retirement funds was valued at US$58.5 trillion by S&P Global Ratings last year. Growing in tandem are Shariah compliant retirement funds as global Muslim seniors seek faith-aligned options for nest eggs.

Total AuM of Muslim retirement funds stood at US$23.76 billion spread among 273 funds in Q4 2025, according to the IFN Investor Funds Database, up from US$15.73 billion divided among 248 funds in Q2 2025.

While equities have provided the largest gains for pension funds historically and dominate fund count in the asset class, gold and silver have turbo-charged the returns of Shariah retirement funds tracked by the IFN database in Q4 2025. This phenomenon occurred as gold hit record highs above US$4,500 an ounce during the quarter while silver peaked at nearly $84 ounce. Turkish retirement funds with strong bias to gold also dominated AuM for the quarter.

Commodities account for approximately 70% of Islamic retirement AuM now, with gold dominating the valuation. It is a position that only looks poised to grow, given the record-breaking prices of the precious metal, which have surged from under US$2,000 an ounce in 2021 to above US$5,000 now.

Most analysts, including those at S&P Global Ratings and Fitch Ratings, are optimistic that gold will drive gains in retirement AuM through 2026 – given its standing as a “safe-haven” asset in markets that constantly experience "flights to safety". This has especially been the case since the 28^th February 2026 US-Israel attacks on Iran and the war contagion across the GCC.

S&P Global has added to gold’s allure by cautioning that a prolonged conflict in the Middle East could add pressure to equity prices and widen credit spreads. Central bank demand for gold also remains at elevated levels compared to pre-2022 averages, providing a major supportive floor for the asset class.

Adding to these factors is the Muslim investment world’s affinity to gold as a Halal asset, compounding its value from both the financial and ethical aspects.

Asset spread

Muslim retirement funds were largely concentrated in two zones of the world as Q4 2025. Their asset breakdown is as follows:

Europe: This region saw the most significant quarterly increase, with AuM growing from US$17.45 billion in Q3 2025 to US$22.54 billion in Q4 2025. This represents a 29.17% rise, driven largely by the performance of Turkish gold-linked participation funds.

• In terms of fund count, Turkiye had 120, accounting for US$21.46 billion, or 44% of the global total. The largest and most profitable Islamic retirement funds were also out of Turkiye.
• The UK had the continent’s second largest Islamic retirement AuM at US$624.97 million, spread among just four funds. The Republic of Ireland ranked a regional third, with six funds hosting US$300.45 million.

Asia Pacific: AuM in this region increased by 9.46% during the same period, reaching a total of US$1.21 billion at year-end.

• Growth here is supported by the professionalization of smaller funds in markets like Pakistan and Malaysia, which share nearly an AuM of nearly US$233 million between them, spread across 137 funds. Individually, Malaysia has US$714.06 million in 59 funds, while Pakistan runs US$491.24 million in 78 funds.

Table 1: Regional growth in Shariah retirement funds by quarter

Chart: Shariah retirement funds by country, AuM and fund account

Largest funds

The Turkiye Life And Retirement Gold Participation Retirement Investment Fund had an AuM of US$6.23 billion as of Q4 2025, making it the world’s largest Islamic retirement fund in the IFN Investor Funds database.

Run by Turkiye Hayat Ve Emeklilik, the fund has a minimum allocation of 80% to gold and gold-based capital market instruments, a strategy that proved highly lucrative once the precious metal’s prices climbed above US$4,000 per ounce for the first time ever.

Table 2: Largest Shariah retirement funds in Q4 2025

Top returning funds

The Participation Retirement And Life Silver Participation Retirement Investment Fund returned 81.37% in Q4 2025, making it the world’s most profitable Islamic retirement fund in the final three months of the year.

Managed by Katilim Emeklilik ve Hayat, it was the first pension fund in Turkiye to offer dedicated exposure to silver assets. The fund aims to capture the dual appeal of silver as both a precious and industrial metal. Its initial size reached approximately US$330 million at launch, signaling strong retail appetite for its offer of commodity-linked retirement savings.

Table 3: Top returning Shariah retirement funds in Q4 2025

Outlook

The Islamic retirement sector looks positioned for further expansion, with double-digit returns in Turkiye to professionalized offerings in Malaysia, to offer a modest but respectable slice of the global pensions industry.

Sustained record-breaking gold prices are expected to drive additional gains in retirement AuM through 2026 as investors continue to seek safe-haven assets amid geopolitical uncertainty.

However, the primary challenge remains asset diversification to move beyond the current 70% concentration in commodities and capture the alpha available in Halal stocks.