Australia’s first sukuk mandate adds diversification to a Shariah-compliant responsible investment super fund

• Shariah screens limit the number of defensive assets available for asset managers in narrow markets where financial institutions represent 25-30% of the market
• Investment managers can offset some of the additional risk by using ESG integration strategies, as well as investing in global sukuk
• The institutionalization of Shari'ah standards gives Islamic asset managers a leg up compared to ESG in terms of clarity about how their investment process is affected by their approach to responsible finance