The global Islamic fund sector has gathered $72.9 billion in assets under management (AuM) as of 17 September 2014, said a recent report by Kuwait Finance House (KFH).
The cumulative number of Islamic funds continues to rise at a steady pace and stands presently at 1,149.
According to the report issued on by the KFH-Research, a subsidiary of KFH-Group, the largest domiciles for Islamic funds are Saudi Arabia and Malaysia, which together hold 67% of Shari'a compliant AuM.
It noted that European jurisdictions, recognized for their human and regulatory infrastructure and cost competitive structures, continue to attract fund managers with Islamic offerings.
A substantial portion of new Islamic funds incepted over the past quarter have been registered in rapidly emerging Islamic finance jurisdictions of Indonesia and Pakistan.
The largest single proportion of Islamic AuM 31 % gets invested in the Saudi Arabian market.
Malaysia follows with 25%, the KFH said. It noted that the availability of a large investable base of Shari'a compliant counters worldwide and the gradual expansion of global Shari'a compliant fixed income options have allowed the setting of an international mandate for approximately 22% of aggregate Islamic AuM.
A structural shift toward non-core assets (alternatives, structured products, specialties, solutions, and passives) is gaining greater traction with the passage of time, the report said. A final overarching trend redefining the global asset management industry is rising international competition.
The outlook for the last quarter of 2014 of the Islamic fund sector is broadly positive - Islamic banking and capital market trends are expected to reinforce the advancement of the Shari'a compliant funds sector, according to the report.
The KFH-Research expects global Islamic AuM to fall between $87.9 billion-$97.3 billion by the end of 2017.
Perennial challenges of this niche asset management segment - such as those of scale, cost efficiency, product differentiation and investor awareness - will continue to limit its development for the foreseeable future.
Nonetheless, Islamic fund managers should be able to maintain their performance and growth momentum, taking advantage of various positive motivators in the larger spectrum of the global Islamic finance industry, the report included.
The cumulative number of Islamic funds continues to rise at a steady pace and stands presently at 1,149.
According to the report issued on by the KFH-Research, a subsidiary of KFH-Group, the largest domiciles for Islamic funds are Saudi Arabia and Malaysia, which together hold 67% of Shari'a compliant AuM.
It noted that European jurisdictions, recognized for their human and regulatory infrastructure and cost competitive structures, continue to attract fund managers with Islamic offerings.
A substantial portion of new Islamic funds incepted over the past quarter have been registered in rapidly emerging Islamic finance jurisdictions of Indonesia and Pakistan.
The largest single proportion of Islamic AuM 31 % gets invested in the Saudi Arabian market.
Malaysia follows with 25%, the KFH said. It noted that the availability of a large investable base of Shari'a compliant counters worldwide and the gradual expansion of global Shari'a compliant fixed income options have allowed the setting of an international mandate for approximately 22% of aggregate Islamic AuM.
A structural shift toward non-core assets (alternatives, structured products, specialties, solutions, and passives) is gaining greater traction with the passage of time, the report said. A final overarching trend redefining the global asset management industry is rising international competition.
The outlook for the last quarter of 2014 of the Islamic fund sector is broadly positive - Islamic banking and capital market trends are expected to reinforce the advancement of the Shari'a compliant funds sector, according to the report.
The KFH-Research expects global Islamic AuM to fall between $87.9 billion-$97.3 billion by the end of 2017.
Perennial challenges of this niche asset management segment - such as those of scale, cost efficiency, product differentiation and investor awareness - will continue to limit its development for the foreseeable future.
Nonetheless, Islamic fund managers should be able to maintain their performance and growth momentum, taking advantage of various positive motivators in the larger spectrum of the global Islamic finance industry, the report included.
Source:
Mubasher
