Asset/wealth management is very important in the modern, complex world of finance. Even though generally it involves professional management of a diversified portfolio for institutional investors (for example, insurance companies, pension funds, corporations, etc.) or high net worth individuals, increasingly investors of all financial capacities, including non-high-net-worth ones, are taking interest in professional asset/wealth management. Such management is commonly to meet specified goals or targets of the respective investors. 

Subject to a specific plan or goal of the investor, the general scope of asset management function involves financial analysis, asset or securities selection, plan implementation, and ongoing monitoring of the portfolio.

Muslim investors often have turned to conventional financial institutions to have their assets managed conventionally and any return from fixed-income securities was donated to charitable purposes to purify the return from the investments. However, due to the emerging field of Islamic finance, a broad range of products and services that are Shariah-compliant are now available to meet the desire and expectation of Muslims to subject their investment portfolio to the dictates of Shariah, as interpreted by the Shariah scholars of our time.

As Riba is prohibited in Islam (thus, interest, based on the presumed riba-interest equivalence) and so are gharar (excessive uncertainty) and maysir (gambling or speculation), based on the developments in Islamic law, there are both Islamic financial institutions and conventional financial institutions with Islamic windows to serve the institutional as well as individual clients needing comprehensive asset management.

Asset management involves both fund management and discretionary portfolio services consistent with the goals and plans of the individual clients. As there are now 100+ Shariah-compliant funds, the opportunities for high net worth investors to take advantage of asset management services have grown significantly. Private banking clients may have specialized needs, such as management of trusts, established for tax or inheritance factors. In addition to fund management, clients can now received services based on a wide-range of portfolio, ranging for stocks, Islamic sukuk securities, etc.

Parallel to Islamic financial institutions, conventional financial institutions with Islamic windows are now able to offer competitive and quality services based on their resources and experience. Of course, such conventional institutions employ their own Shariah supervisory boards to ensure compliance of their products and services with the Shariah.

Investing with conventional financial institutions with Islamic windows has become increasingly popular because of their better capacity to manage risk through globally diversified portfolio accompanied by high level of liquidity. Now beyond single manager equity funds, there are also fund of funds to better deal with Islamic asset management.

Despite the fact that Shariah-approved hedging techniques as part of fund risk management remains limited, stock options are gaining recognition as an acceptable vehicle as part of the tool kit of fund management.

Islamic financing products are filling an important void in the services desired by Muslims and are gaining popularity as they are trying to offer competitive returns, while being Shariah-compliant.

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