The persistently strong demand for Shariah-compliant investments is helping Islamic asset managers remain resilient during the economic disruption caused by the Covid-19 pandemic, according to a recent report published by Moody’s Investors Services.
The rating agency states that net inflows into some large Islamic funds in the Gulf Cooperation Council (GCC) have remained positive despite weaker markets and falling oil prices and in contrast to the net outflows experienced in other regions.
Moody’s is, however, forecasting that growth in Islamic assets under management will slow to 2% and 4% for this year and the next.
“Islamic fund managers in the GCC region benefit from bespoke mandates with a range of affluent clients, including high-net-worth individuals, family offices, sovereign wealth funds and other government institutions,” said Vanessa Robert, a vice president and senior credit officer at Moody’s. “These investors generally have high risk tolerance and long investment horizons.”
The report also refers to the increased take-up of Islamic investments in Saudi Arabia, which along with Malaysia accounts for close to two-thirds of the global Islamic assets under management.
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