As with any investment, your capital is at risk.
Investing is a highly rewarding task, and not just in financial terms. Long term investors continuously broaden their circle of competence by studying new companies and their business models, their points of resilience and weakness and management behaviour.
This task takes us around the globe to meet some of the most brilliant minds of our time, and the thrill doesn’t stop there. We take the knowledge gained in the present, which is the easy part, and think deeply about future possibilities for the companies we study. This quest for learning has sustained me over the past two decades of my professional life.
But now, I stand at the threshold of an even greater purpose. A new quest beckons. One that promises not just personal growth but the power to shape the future of Shariah-compliant investing. This is more than a career; it's a calling to make a difference and contribute to a world where finance and faith coexist and empower each other.
As I look ahead, I'm filled with excitement that surpasses anything I've experienced professionally. I hope you can join me and my team at Baillie Gifford Islamic and be part of what we believe to be a journey that honours our values while embracing the best of investing.
The genesis of the strategy
The Baillie Gifford Islamic Global Equities Strategy was several years in the making. After extensive research, debate and consultation with investment colleagues and with some of the industry's leading Sharia scholars, we launched the strategy in May 2022.
Why did it take so long? Because we were committed to developing a strategy that matches the high standards of excellence Baillie Gifford offers to other institutional clients. We wanted the strategy to invest in the highest quality companies in the world, be unlimited in its geographical remit, and be uncompromising in the magnitude of returns it pursues. In short, we wanted to build a first-class product for the world's Muslim population.
Investment philosophy and resilience
In keeping with our investment philosophy at Baillie Gifford and in line with Sharia rules, our Islamic Global Equity Strategy is invested in companies which have set out to shape the future of our economies and are set to do so in an environmentally and socially responsible manner.
These companies benefit from strengthening their competitive advantages and are run by able management teams. Their financial profiles are strong, so there should be little need for them to raise debt. This combination of factors makes our portfolio companies resilient and attractive to own for long periods.
While the companies we own are not immune to economic pressures, they are resilient and not dictated by them. Share prices may fluctuate, but our confidence in their ability to deliver strong operational performance keeps us committed to investing in them for five to ten years. Ultimately, it is the long-term growth in earnings and cash flow that drives sustained share price performance.
Collaboration with Islamic scholars
Before our launch, we established strong working relationships with leading scholars within Islamic finance and consulted a network of distinguished academics and investment colleagues. This collaboration helped us craft a genuinely differentiated product for clients.
We are also leveraging Baillie Gifford’s tried-and-tested bottom-up research process. By working closely with scholars and industry constituents, we aim to expand the investable universe, rather than simply screening out companies according to an index or a third-party provider. This endeavour, we hope, will improve investment returns for clients and the broader Muslim community.
We are pleased to say that this continuing dialogue with Islamic scholars and industry constituents has already resulted in the expansion of the investible universe, be it through more constituents being covered by Islamic Indexes or individual stocks being recognised as Sharia-compliant.
Take the example of Shopify. Shopify supports the digitalisation of SMEs and empowers them to scale their businesses globally. We collaborated with Islamic scholars to explore the company’s societal legacy and provided comprehensive insights into its financial profile, leading to Shopify being recognised as Sharia-compliant. This highlights the importance of constructive dialogue between well-intentioned stakeholders and the need for specialised bottom-up research from a dedicated investment resource.
We are currently engaging on other cases and hope this will lead to further expansion of the investible universe for clients and the broader Muslim community. We will continue to be ambitious in our approach and are excited by the opportunity to have a positive impact within the wider Islamic finance industry.
Looking ahead
The journey has just begun for the Baillie Gifford Islamic Global Equities Strategy. As long-term growth investors, we will continue actively seeking investment opportunities that, in our opinion, the market has yet to recognise or materially underappreciates.
Our primary objective will always be to deliver exemplary returns for clients, but we remain enthused by the prospect of providing additional benefits through our distinctive approach to scholarly engagement. We hope that current and future clients are as excited by the opportunity as we are.
Risk factors
The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.
This communication was produced and approved in March 2025 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.
All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.
This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.
All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.
The images used in this communication are for illustrative purposes only.
Important information
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