The buzz around investments with strong environmental, social and governance (ESG) principles has been one of the biggest financial stories of late. Investors want their voices and values heard and to help build a better planet. Institutions are also pressuring companies to adhere to stricter ESG standards. As a result, Bloomberg forecasts assets with strong ESG principles to potentially hit US$53 trillion of assets under management (AuM) by 2025, a third of global AuM. Morgan Stanley also projects ESG investments to drive as much as US$67 trillion of inflows over the next decade. Nadeem Mian, Portfolio Manager at ShariaPortfolio Canada delves further.
Long before ESG investing was a thing, Muslim investors were focused on similar principles. Thanks to a combination of surging demographics and widespread interest in improving our planet, these investment principles are growing significantly and garnering vast interest in Canada’s global Muslim community.
Halal investing in Canada?
Sharia-compliant investing refers to investing that strictly adheres to Sharia or Islamic law. According to PwC: “The concept of Sharia-compliant investing goes back four decades, and yet the sector has only really taken off in the last five years.” There are many rules when it comes to Sharia finance. However, the foundation is centered on the concepts of social justice, ethics, using capital to help build communities and focusing on mutually financially beneficial partnerships.
A mature Muslim Canadian community
The opportunity for Halal investing in Canada is massive and continues to grow. Muslims have been immigrating to Canada since the 1850s and poured into the country during a gigantic wave in the 1970s.
Today, the population is swelling again, with roughly half of Canada’s new immigrants coming from predominantly Muslim lands in the Middle East, Africa and Asia. Islam is also now the second-largest religion in all of Canada and represents the fastest-growing religion in the entire country with a 72.53% growth rate.
Recent Pew Research Center Forum projections show even more mind-blowing growth figures. Canada’s Muslim population is expected to skyrocket from roughly 940,000 today to 2.7 million by 2030, making up 6.6% of the total population. It is also expected to nearly triple over the next 20 years.
As the Muslim population matures, there is a shift in how they invest and grow their wealth. In the 1970s, investing in stocks and for retirement was essentially a foreign concept. Most immigrants in the 1970s did not invest in non-tangible goods. They focused more on getting a house, building a career and not necessarily on retirement or learning the markets.
Today, as Muslims have become an older population with significant wealth and large successful communities, they are looking at investment options that adhere to their values and financial goals.
Additionally, thanks to Canada’s openness and embracing of multiculturalism, the recent waves of immigration have been sound from an economic perspective with exposure to Halal investing from their home country.
Higher net worth and better educated Muslim immigrants are coming with more knowledge of investing in intangible assets and this is pushing the demand for Halal investing in Canada. There is also the internet now, something that the 1970s immigrants did not have access to. This new wave has more exposure to information and educational materials than the previous wave to explore investing products and options.
Moreover, another demographic shift is the kids of these first-generation immigrants who came in the 1970s. They have not only been much faster to take on investing and its concepts, but are entering into their peak earning years with significant disposable income and assets.
Furthermore, as those who first came to Canada are now retiring, a colossal transfer of wealth is happening.
Gearing up for the future
The Sharia-compliant sector is set to see a substantial increase in exposure, especially in Canada as its Muslim population continues booming. Demographic forces continue to accelerate the demand for Sharia-compliant investments. The increasingly widespread focus on bettering our world has also been a significant catalyst, giving the Sharia-compliant sector a proper ESG angle.
Muslims represent nearly a quarter of the world’s population, yet less than 1% of financial assets are Sharia-compliant. The market is simply underserved, untapped and ripe for growth.
Who is ShariaPortfolio Canada?
ShariaPortfolio Canada, is the premier sharia-compliant wealth manager in Canada. The company offers professionally managed investment solutions that help Muslims achieve their life goals while honoring their personal values. By utilizing a highly disciplined approach to wealth management, ShariaPortfolio has been appealing and winning the hearts of halal investors for some time, and will continue to long into the future.
In terms of longevity and history, ShariaPortfolio has been around for 19 years in the U.S. and is the leading sharia-compliant wealth manager in the country. Of course, in Canada, options were limited despite the glaring opportunity. In 2019, ShariaPortfolio was entered Canada to offer Muslims with its brand of professional wealth management service and is currently the only OSC licensed and registered wealth manager in Canada dedicated to Sharia-compliant investing.
Credibility and Islamic Principles Sets ShariaPortfolio Apart
Since its entry into Canada, ShariaPortfolio has experienced growth across the board primarily due to the credibility it brings to the space.
ShariaPortfolio Canada strictly follows AAOIFI standards, otherwise known as the gold standard rule book of Islamic finance. The Bahrain-based AAOIFI is a council of scholars that set the standards for companies and institutions engaged in Islamic Finance around the world.
Outside of the adherence to AAOIFI standards and guidelines, ShariaPortfolio Canada has also been audited and approved by the Islamic Finance Advisory Board, an independent organization of Canadian Imams, scholars, and finance experts. This Board reviews and audits contracts and processes for companies seeking to provide Sharia finance and investments to Canadians.
This article is also featured on Islamic Finance News (IFN). To read the version featured on IFN click here