Islamic Fund Management
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more than half of its AuM and the top three manage a quarter. In contrast, the retail market is
quite fragmented; the top ten asset managers handle just a fifth of its AuM.
Foreign Collective Investment Schemes (FCIS) are off-shore schemes regulated by the FSB and
authorised for distribution in South Africa. The assets of FCIS amounted to ZAR442.3 billion in
2017, as illustrated in having increased annually between 2010 and 2017, with a
CAGR of 22.4%. The majority of these FCIS were domiciled in Luxembourg, with Jersey and
Ireland also popular domiciles.
Chart 4.23: South Africa’s AuM of Foreign CIS (2010-2017)
Source: ASISA
The manager of the FCIS must be approved by the registrar, and the country where the FCIS is
based must have a regulatory environment of at least the same standing as that of South Africa.
Local investors who wish to invest in these funds must comply with the Reserve Bank’s
regulations and use their foreign capital allowances as FCIS portfolios are denominated in
foreign currencies, typically USD, GBP, EUR and JPY.
Similarly, the AuM of Islamic funds has been trending upwards, standing at ZAR18.3 billion as
at end-April 2018. hows Islamic AuM as a percentage of total AuM. Despite a
marginal drop in market share for Islamic AuM from 0.79% in 2016 to 0.74% in 2017, the
nominal value of Islamic AuM had increased to ZAR16.7 billion in 2017 (2016: ZAR15.9
billion). This indicates a high possibility or potential for South Africa to become the hub of
Islamic finance in the African region, especially in Islamic funds. A slight contrast to the asset
allocation of total CIS, local equity holds the largest percentage of assets allocated under
Islamic AuM, followed by foreign equity, local cash and sukuk, and others―as presented in