{"id":840085,"date":"2025-10-16T14:44:48","date_gmt":"2025-10-16T12:44:48","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=840085"},"modified":"2025-10-16T14:44:52","modified_gmt":"2025-10-16T12:44:52","slug":"pragmatism-principles-and-performance-shariah-investing-amid-global-uncertainty","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/industry-news\/840085\/pragmatism-principles-and-performance-shariah-investing-amid-global-uncertainty\/","title":{"rendered":"Pragmatism, principles and performance: Shari\u2019ah investing amid global uncertainty"},"content":{"rendered":"\n<p><em>By Maahir Jakoet, Old Mutual Global Islamic Equity Fund Manager, Old Mutual Investment Group<\/em><\/p>\n\n\n\n<p>With global markets currently being defined by uncertainty, as geopolitical risks rattle investor confidence and concerns around global market concentration mount, investors continue to seek ways to best to protect capital, while still capturing growth.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"https:\/\/www.oldmutualinvest.com\/institutional\/invest-with-excellence\/global-managed-alpha-fund\/?utm_source=BusinessTech&amp;utm_medium=Article&amp;utm_term=October+2025\" target=\"_blank\" rel=\"noreferrer noopener\">Click here to learn more about the Old Mutual Global Managed Alpha Fund.<\/a><\/strong><\/li>\n<\/ul>\n\n\n\n<p>Recent market movements have reflected heightened volatility, characterised by sell-offs during periods of aggressive rhetoric from US President Trump and partial recoveries when his tone becomes more measured.<\/p>\n\n\n\n<p>As such, investor sentiment has turned increasingly cautious, with rising uncertainty being intensified by the ongoing trade tensions between the US and China.<\/p>\n\n\n\n<p>Going forward, investors will need to focus their attention on key developments driving potential sector rotations within the equity market and the risk of broader global contagion effects.<\/p>\n\n\n\n<p>Against this backdrop, an investment approach once considered too niche for mainstream investing is providing an increasingly compelling investment solution amid the current uncertainty.<\/p>\n\n\n\n<p>Islamic, or Shari\u2019ah-compliant, investing represents a disciplined, risk-conscious investment framework \u2014 one that has shown a consistent ability to navigate turbulent conditions more effectively than many conventional strategies through its focus on quality, balance sheet strength, and prudent risk management.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A framework built for volatility<\/h2>\n\n\n\n<p>Periods of uncertainty often expose structural weaknesses in markets.<\/p>\n\n\n\n<p>Companies dependent on leverage or speculative growth tend to suffer the most when liquidity tightens or economic growth slows. Shari\u2019ah investing, by its nature, avoids these risks.<\/p>\n\n\n\n<p>Today\u2019s global market environment is plagued by persistent uncertainty around geopolitics, inflation, uneven growth, monetary policy and US fiscal sustainability.<\/p>\n\n\n\n<p>When considering any asset class, it\u2019s essential to weigh both risk and return within the context of this environment. <\/p>\n\n\n\n<p>Equities offer superior long-term growth potential but are higher on the risk spectrum compared with cash, bonds, or real estate.<\/p>\n\n\n\n<p>Including them in a diversified portfolio is vital.<\/p>\n\n\n\n<p>A Shari\u2019ah-compliant fund provides not only equity exposure but also a unique risk-return profile because of the Shari\u2019ah screening, which inherently leads to a higher-quality investment universe.<\/p>\n\n\n\n<p>Under Shari\u2019ah principles, companies must maintain conservative financial structures \u2014 with total debt-to-market capitalisation\/total assets ratios below 33% \u2014 and are excluded from the Shari\u2019ah investment universe if they derive significant revenue from prohibited activities such as alcohol, gambling, weapons or conventional finance.<\/p>\n\n\n\n<p>What remains is a universe of high-quality businesses with sound balance sheets, sustainable earnings, and prudent management practices.<\/p>\n\n\n\n<p>This disciplined filtering process creates a natural bias towards resilience.<\/p>\n\n\n\n<p>In today\u2019s market, where many companies face rising debt costs and margin compression, that resilience has become a decisive advantage.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Outperformance through discipline<\/h2>\n\n\n\n<p>Quality wins when uncertainty rises. The investment approach and performance of the Old Mutual Global Islamic Equity Fund is a perfect illustration of this principle.<\/p>\n\n\n\n<p>The Fund\u2019s focus on companies with strong profitability and low leverage allows us to preserve capital when volatility spikes and participate meaningfully in recoveries.<\/p>\n\n\n\n<p>This quality bias isn\u2019t just theoretical.<\/p>\n\n\n\n<p>The Fund has consistently delivered superior risk-adjusted returns \u2014 outperforming both its Shari\u2019ah-compliant and conventional global equity peers over one, three, and five years, and earning a 5-star Morningstar rating.<\/p>\n\n\n\n<p>Its success lies in how it combines Shari\u2019ah discipline with a systematic, data-driven investment process.<\/p>\n\n\n\n<p>Instead of relying solely on traditional bottom-up analysis, the team leverages quantitative models, statistical signals, and advanced risk systems to identify the most attractive opportunities across global markets.<\/p>\n\n\n\n<p>This approach allows the managers to maintain both breadth and precision \u2014 assessing thousands of stocks objectively and scaling their process efficiently.<\/p>\n\n\n\n<p>It also ensures that every portfolio decision aligns with the ethical and financial rigour demanded by Shari\u2019ah compliance.<\/p>\n\n\n\n<p>What we have found to be particularly effective during the current volatility of global markets is the merging of modern investment science with timeless Shari\u2019ah principles.<\/p>\n\n\n\n<p>The result is a portfolio that\u2019s not just compliant \u2014 it\u2019s competitive.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Positioning for opportunity amid uncertainty<\/h2>\n\n\n\n<p>The Old Mutual Global Islamic Equity Fund\u2019s models also integrate forward-looking earnings expectations, ensuring the portfolio is responsive to evolving macro conditions.<\/p>\n\n\n\n<p>We don\u2019t try to predict inflation directly; instead, we rely on consensus earnings forecasts that reflect how inflation and growth trends are affecting companies in real time.<\/p>\n\n\n\n<p>This approach has helped the Fund maintain a smoother performance profile even as global markets have swung between optimism and fear.<\/p>\n\n\n\n<p>When it comes to the Fund\u2019s current exposure, it is underweight US equities, where valuations remain elevated, and overweight Canada, South Korea, and Hong Kong, where fundamentals and pricing appear more attractive.<\/p>\n\n\n\n<p>Sector allocations reflect a balance between defensiveness and growth:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Healthcare<\/strong> holdings offer durable growth and pricing power amid global health trends.<\/li>\n\n\n\n<li><strong>Materials<\/strong> remains well supported by high commodity prices together with supply constraints.<\/li>\n\n\n\n<li><strong>Financial technology<\/strong> exposures like <strong>Visa<\/strong> and <strong>Mastercard<\/strong> provide participation in global payment innovation, without the leverage risk that excludes conventional banks under Shari\u2019ah rules.<\/li>\n<\/ul>\n\n\n\n<p>This diversified positioning reflects the fund\u2019s ability to adapt \u2014 maintaining discipline while seizing structural opportunities in global markets.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Ethical integrity, financial resilience<\/h2>\n\n\n\n<p>Although rooted in Islamic values, the appeal of Shari\u2019ah investing remains universal.<\/p>\n\n\n\n<p>Its emphasis on transparency, accountability, and balance resonates with the global shift towards responsible and sustainable investing.<\/p>\n\n\n\n<p>For many investors, the Shari\u2019ah framework offers a pragmatic model for aligning performance with principle.<\/p>\n\n\n\n<p>The Global Islamic Equity Fund continues to demonstrate that Shari\u2019ah-compliant investing can deliver strong and consistent performance without compromising on ethics.<\/p>\n\n\n\n<p>The Fund\u2019s consistent top quartile ranking versus it\u2019s peers is not simply about performance metrics; it validates a philosophy that places discipline and client outcomes at the core of investment success.<\/p>\n\n\n\n<p>Shari\u2019ah investing isn\u2019t really about exclusion; it\u2019s about inclusion \u2014 achieved through incorporation of stronger balance sheets, higher quality businesses, and sustainable long-term thinking.<\/p>\n\n\n\n<p>In uncertain markets, this is what drives outperformance.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A steady hand in a shifting world<\/h2>\n\n\n\n<p>As markets grapple with a new era of complexity \u2014 where policy risk, inflation persistence, and geopolitical shocks remain constant features \u2014 Shari\u2019ah investing, grounded in ethical clarity and financial prudence, offers simplicity and strength to navigate this environment.<\/p>\n\n\n\n<p>By combining rigorous balance sheet discipline with a forward-looking, data-driven approach, we are carving out a path through volatility that is both principled and profitable.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.oldmutualinvest.com\/institutional\/invest-with-excellence\/global-managed-alpha-fund\/?utm_source=BusinessTech&amp;utm_medium=Article&amp;utm_term=October+2025\" target=\"_blank\" rel=\"noreferrer noopener\">Click here to learn more about the Old Mutual Global Managed Alpha Fund.<\/a><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/10\/Old-Mutual-Maahir-Jakoet-Headline-Image-1200x675-1.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/10\/Old-Mutual-Maahir-Jakoet-Headline-Image-1200x675-1-1024x576.jpg\" alt=\"\" class=\"wp-image-840087\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/10\/Old-Mutual-Maahir-Jakoet-Headline-Image-1200x675-1-1024x576.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/10\/Old-Mutual-Maahir-Jakoet-Headline-Image-1200x675-1-300x169.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/10\/Old-Mutual-Maahir-Jakoet-Headline-Image-1200x675-1-768x432.jpg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/10\/Old-Mutual-Maahir-Jakoet-Headline-Image-1200x675-1.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>With global markets currently being defined by uncertainty, as geopolitical risks rattle investor confidence and concerns around global market concentration mount, investors continue to seek ways to best to protect capital, while still capturing growth.<\/p>\n","protected":false},"author":57,"featured_media":840086,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10459],"tags":[23823,23824,23666,5974],"class_list":["post-840085","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-news","tag-maahir-jakoet","tag-old-mutual-global-islamic-equity-fund-manager","tag-old-mutual-global-managed-alpha-fund","tag-old-mutual-investment-group"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/57"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=840085"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840085\/revisions"}],"predecessor-version":[{"id":840174,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840085\/revisions\/840174"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/840086"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=840085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=840085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=840085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}