| Summary: | This study was conducted to identify portfolio management practices of selected Islamic Banks in Malaysia. Based on the findings, the study concluded that Islamic banking customers and portfolio managers agree that adopting a mix of portfolio management practices improves Islamic Banking in Malaysia. The respondents believe that the legal system of the country may serve as a challenge to many financial institutions that conduct portfolio management by being Shariah compliant. While Islam is the national religion in Malaysia, Islamic banking methods are not employed across every banking system with a portfolio of different assets due to the variability in risks and returns of the different assets. Other challenges highlighted by the results of the study are the lack of understanding of concepts within Islamic finance, Islamic Portfolio management and asset allocations. The results suggested that the government of Malaysia can influence other Islamic banking and finance organizations to integrate the portfolio management practices according to Sharia law to enable uniform practice. Further studies can be conducted in portfolio management service of Islamic banks, their impact on risk and return, and the satisfaction of investors with intention to have a Shariah-compliant portfolio of investment. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2024.
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