Islamic Fund Management
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they are domiciled. Given that, they have to meet certain levels of regulatory and investor-
protection requirements, UCITS are appealing to international investors and increasingly
gaining traction in different regions, including Asia, Africa and Latin America (ISRA, 2015, p.
525).
2.1.2 Key Differences Between Islamic and Conventional Funds
Islamic investment funds are similar to conventional funds in terms of the common objectives
that they share, such as pooled investment, capital preservation and returns optimisation
(ISRA, 2015, p. 523). The activities of the two sets of funds are also similar, involving the
following:
 Determining clients’ financial needs and objectives.
 Financial analysis of investments.
 Selection of assets and securities.
 Investment planning and strategies.
 Portfolio monitoring and periodic rebalancing.
The distinguishing feature between the two types of funds is that Islamic funds must always
comply with Shariah rules and laws in terms of their operations, activities and investments.
Islamic fund management is therefore about the professional management of investors’ money
in Shariah-compliant securities and assets, in line with Shariah principles to achieve set
financial goals. Elements such as Shariah screening of investments, the role of Shariah boards,
Shariah governance mechanisms involving Shariah reviews and audits, purification of impure
income and alms-giving ( zakah) calculation are important in the adherence of Islamic funds’
activities to Shariah requirements. The key differentiating criteria that distinguish Islamic
from conventional funds are explained i