London, Feb 10: Assets under management (AUM) in Islamic mutual funds have increased substantially, having peaked at around USD130 billion at end of the second quarter of last year before slipping to around USD120 billion at end of 2021.
Fitch Ratings estimates that the growth rate of Islamic funds has exceeded that of the broader global mutual fund industry, based on the latest comparable data for the five years to end-3Q21, based on Lipper and ICI Global data.
Saudi Arabia and Malaysia remain the pre-eminent Islamic fund domiciles worldwide, reflecting strongly established local markets.
Offshore markets, such as Jersey and Luxembourg, also have nascent Islamic fund markets.
Jersey is an Islamic exchange-traded fund (ETF) hub, where multiple commodity ETFs (notably gold ETFs) claim Sharia status, whilst Luxembourg has a broader Islamic mutual fund base.
Money market funds (MMFs) are the largest Islamic fund type.
This is largely driven by Saudi Arabia being the largest Islamic fund domicile, and by MMFs being the dominant fund type in Saudi Arabia: 83 per cent of Saudi Islamic fund AUM was invested in MMFs at end of the last year’s fourth quarter.
Conversely, Malaysian fund assets are more spread out, with the largest segment (equity funds) representing 44 per cent of total AUM.
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