GLOBAL: Islamic exchange-traded funds (ETFs) in the Gulf have struggled to attract new investors, due to a lack of knowledge of the industry, the limited presence of ETF providers in the region and a preference for property and private equity investments.
According to Saied Hamedanchi, CEO of ShariaShares, the limited investor awareness of the ETF industry in the GCC is the biggest factor impeding the market’s growth, while analysts have also said that Gulf investors continue to prefer real estate and private equity investments, with which they are familiar.
Data shows that assets of ETFs from the likes of iShares, BNP Paribas and Deutsche Bank have been slow to increase; with the combined assets of iShares’ three Islamic ETFs declining to US$95.8 million on the 25th June 2012, from its all-time high of US$164.5 million in September 2011.
Meanwhile, BNP Paribas’s Islamic ETF, launched in 2007, reported US$27.5 million in assets; and assets in Deutsche Bank’s ETF amounted to US$8.9 million as at June 2012