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KembaraXtra–Islamic Finance–Islamic Capital Market – Islamic Investment Funds
-Islamic investment funds are collective investment schemes that must be fully Shari’ah compliant
-All investment activities of these funds must conform to Islamic principles,avoiding riba,gharar,and maisir
-Investors participate by pooling their surplus funds into a joint investment venture
-The pooled funds are invested in Shari’ah-compliant assets with the objective of generating profits
-Investors in Islamic investment funds act as partners,not lenders
-Profit and loss arising from investments are shared among investors based on their contribution
-When investors subscribe to Islamic investment funds or Islamic mutual funds,they receive a written record of ownership
-This record is issued in the form of a certificate,confirming the investor’s participation in the fund
-The certificate may be referred to as a certification share,unit trust,or mutual fund unit,depending on the fund structure
-The certificate represents the investor’s proportionate ownership in the fund’s underlying assets
-Key takeaway:Islamic investment funds enable investors to collectively invest in Shari’ah-compliant opportunities through shared ownership,shared risk,and ethical profit generation
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