Islamic Funds in the UK Financial Market

The overall size of the Islamic funds’ industry is estimated to be over US $400 Billions of Assets which are being maintained by the Islamic funds. Such large size of the asset under management indicates the overall penetration into the market by Islamic funds. What is however, important to note that the there are more than 250 Islamic funds are in existence in different countries including UK, Malaysia as well as Saudi Arabia. Such diversity of the funds provide unique dynamics to the market and as such the market is considered as expanding and will cater to the needs of traditional markets also.The recent performance of the Islamic funds in UK however, has not performed well considering the overall economic situation in the Region as well as the overall economic downturn in the world. What is also important to note that the most of the Islamic funds that are working within the UK are based in Gulf Countries and are being directly controlled from that Region and especially from Malaysia. In a sense, it is therefore important to note that while analyzing the performance of the Islamic funds in UK, it is relatively more important to also analyze the economies and economic dimensions of the countries where they are headquartered. The trends however, reflecting that the overall situation, at least, for UK is improving as more and more funds are being headquartered in the country.

UK Economy
The performance of the UK’s economy has not been wonderful especially after 2007 in the backdrop of the credit crunch and the resulting financial meltdown experienced by the country. The overall growth rates were negative and the expectations are that the economy may not be able to perform better in at least year 2010. The overall consumer spending has dropped down due to which the total economic activity has slowed down and there has been huge unemployment in the country in recent past.&nbsp.