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The market for Islamic investing – which conforms to Islamic law, or Shariah – should be booming. Nearly a quarter of the world’s population are adherents of the faith and advocates say the sector is inherently aligned with the flourishing sustainable investing movement.
Yet growth has been sluggish. In 2011, it was thought that the Islamic finance sector would grow to $4-5trn in assets by 2015. At current rates, that threshold will be reached in 2030.
Practitioners have attributed this to a poor understanding of financial Shariah principles among Muslims and non-Muslims alike, and a lack of impetus to seek it out. But institutional investors may find much to like about Shariah-compliant approaches - its prudent long-term growth strategies and a finely honed ethical dimension.
As with other faith-based investin…