We think the future is bright for investing in sukuk. We are confident that sukuk can capture more market share in the global fixed income space.
Our more than 10 years of investing in the asset class suggests sukuk could provide the type of resilience and stability that mitigates an uncertain global economy, particularly as more risk management tools, environmental, social and governance analysis and fintech capabilities become increasingly integrated into sukuk products. We are excited for what the next decade will bring.
Despite this, sukuk remains a misunderstood asset class, subject to misconceptions. Sukuk was recently included in JP Morgan’s Asia Credit Index Core and Emerging Market Bond Indexes. We believe that positive reception should spur further growth in sukuk and cement its place as a significant component of global markets. It’s not a foregone conclusion that the sukuk market will hit our estimate of $2.7trillion (R40.30trln) in assets by 2030.
However, we’ve identified a number of developments we think should maintain momentum for the asset class. These primarily relate to growth in issuances from the market, and how we tackle obstacles around standardisation, innovation and governance.