Islamic Fund Management
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2. Comprehensive Offering of ICM Products and Services
A combination of developmental initiatives led by the SC and industry-driven innovation have
resulted in a range of Islamic financing and investment instruments available in the
marketplace. Significant milestones for the Islamic fund management industry include the
introduction of Shariah screening methodology for listed securities in 1995 followed by the
announcement of the first list of Shariah-compliant securities two years later.
In line with the maturity of the Islamic finance industry, the SC in 2012 revised the
methodology and introduced two-tier benchmarks by adding the financial ratio benchmark to
the existing business activity benchmark, as shown in This has boosted the
competitiveness of the Malaysian Islamic equity market and Islamic fund management
industry, by making available a steady supply of Shariah-compliant stocks to promote the
development of Islamic funds.
Various type of investment products and services provide greater options for investors to meet
their financial goals based on the specific risk-return profile. Notably, investing across a broad
spectrum of asset classes helps diversify investment for investors; asset bases and spreads
investment risk. For example, investments in Shariah-compliant equity ETF exposes investors
to a basket of stocks without having to invest directly in each stock. Through REITs, common
investors can diversify their investment portfolios by holding the units of REITs that hold
selected Shariah-compliant properties.
Figure 4.2: SC’s Shariah Screening Methodology
Source: SC