5 Top Trends and Predictions for the Future of Halal Investing
The global halal investment industry is growing and transforming rapidly. As a result, investors and institutions alike must remain abreast of the latest trends and predictions to inform their decisions and maximize returns. From new products and services to increasing asset allocations, here are the five key trends and predictions for the future of halal investing.
1. Increasing Global Asset Allocation
While many parts of the world have yet to jump on the bandwagon, some of the largest countries, such as the United States and United Kingdom, are starting to allocate more capital to halal investments. This shift is expected to continue as global awareness of the misaals (ethical rules and regulations) of halal investing increases, especially in countries with strong Islamic populations.
2. Growing Interest in Islamic Real Estate
Islamic real estate has traditionally been seen as one of the least attractive investments for believers, however, recent developments have changed this perception. Islamic financiers have developed novel products, such as Sukuk and REITs, which allow investors to benefit from real estate ownership without actually purchasing a physical property. With the recent growth in interest around Islamic real estate investments, it’s likely that more innovative products will enter the market soon.
3. New Opportunities in Technology
A number of new technology companies have recently launched their services targeting Islamic investors, with the goal of further digitizing halal investments. These companies are focusing on the development of islamic-compliant portfolios and the use of ethical algorithms that leverage data to make the best halal investment decisions. This trend is expected to continue as more investors become comfortable investing through digital platforms.
4. Emergence of new Asset Classes
In recent years, there has been a renewed interest in alternative asset classes such as cryptocurrencies, venture capital, and real estate crowd-funding. These investments provide potential for high returns and can serve as an important tool for diversifying a halal portfolio. The Islamic finance industry is beginning to embrace these asset classes and develop products that adhere to Islamic principles.
5. Greater Use of Impact Investing
With the increasing demand for sustainability, many investors are turning to impact investing to generate positive social and environmental change. Several halal funds now focus on investing in companies and initiatives that have a positive impact on the environment, society, and economy. This trend is expected to continue as more Muslim investors become aware of the potential of harnessing the power of investment to make an impact beyond financial benefits.
Conclusion
As the global halal investment industry evolves, investors and institutions must remain abreast of the latest trends and predictions to make the most informed decisions. From increasing asset allocations to new products and services, there are a number of key trends for the future of halal investing. Understanding these trends and anticipating the changes that may come along with them is essential for any investor looking to capitalize on the potential of the industry.