TheEdge
LONDON: Market volatility wiped out all the asset gains made by the Islamic fund management industry in the year to September 2008, research and data provider Cerulli Associates said on Wednesday.
Islamic or syariah-compliant funds posted an 8% increase in the year to September 2008, due to new investments and returns on assets, Cerulli said. But assets were likely to have fallen to 2007 levels or even further by the end of last year, its report based on a sample of global asset managers said.
Syariah-compliant fund managers had assets of US$65 billion (RM227.5 billion) at the end of the third quarter 2008, including assets managed via discretionary mandates for institutions and high net-worth individuals and mutual funds.
The Boston-based company said Islamic-compliant equity investments performed like their conventional counterparts, while sukuk or Islamic bonds remained “rare” due to the illiquidity and scarcity of the underlying securities.
Once markets stabilised this industry could potentially expand at a rate of above 10% a year, driven by the large amount of Islamic bank deposits and increased regulatory support from governments, the report said.
Islamic mutual funds alone accounted for US$35 billion — up from US$23.2 billion gathered in 2005. — Reuters
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