Multi-objectives portfolio optimization; challenges and opportunities for Islamic approach

Abstract

In financial activity, a portfolio is a set of assets that can make one compound from several positions to investing. The main problem for this area is found out the optimal method to distribute a given founds on a set of existing assets. Maximization of expected return and minimize of risk are two main aims of this problem. This paper reviews Islamic approaches to multi-objective portfolio optimization problems. From this viewpoint, the present paper reviews several studies proposed for multi-objective optimization, and some research that they focus on Islamic approach. It is seen that most of recently studies have tried to improve the models of the risk of Islamic investing models. The main aims of them are restructured and making the new financial instruments that they are adaptive via Shariah as the supervision. Furthermore, it has been given two briefly review tables for recently investigates on multi-objective portfolio optimization in cases, conventional portfolio and Islamic approach. These tables led to find the best method to find a good strategy to research in this area. Next, they are presented some challenges and opportunities in this area based on literature and this investigate. Challenges and opportunities give a good viewpoint in this area. The scope of this research is the theoretical study on Islamic finance. Finally, results and some future works are presented as the conclusion.