At US$930 billion ($1.18 billion) in size, the market for sukuk — the Islamic world's answer to bonds — is becoming harder for mainstream investors to ignore, according to Morningstar. Funds investing in sukuk — Islamic securities that mimic bonds in their cash flow and risk characteristics — represent a “small but growing market” with appeal for Muslim investors otherwise barred from owning conventional bonds, reads a Morningstar report released June 26.
According to Fitch Ratings, the sukuk market grew 7.7% y-o-y in outstanding securities at the end of 2024, but the market for funds investing in sukuk is tiny by comparison, at just US$5.8 billion in assets under management (AUM) over 98 individual vehicles.
