A ‘mutual fund’ is a pool of money from different people with the same objective. It gives you access to opportunities to grow your money that you wouldn’t normally have access to if you didn’t have a lot to invest.
Your money is pooled together with that of other investors, and spread over a range of asset classes such as bonds (and money market instruments), equities and cash. The collective assets in the fund are called a portfolio, and they are managed by an experienced fund manager on your behalf. For this service, the fund manager charges a small annual fee known as a management fee.
Your investment in mutual funds are divided into shares, and the number of shares held represent your ownership stake of the funds overall assets, and the return those assets generate. The prices of these shares will fluctuate daily as the underlying value of the assets rise and fall and your individual stake will rise and fall accordingly.
Equity and real estate provide superior long-term protection against inflation. The high risk of equities and real estate is lowered by also investing in fixed income securities and cash, which provide a fairly predictable income stream and easy access to your money.
The Fund invests primarily in equities and as such seeks to provide superior long-term protection against inflation. The high risk of equities is lowered by also investing in fixed income securities, which provide a fairly predictable income stream and easy access to your money.
The fund only invests in investments screened by a Shari’ah Advisory Board. The fund will not invest in any company that involves interest-bearing transactions, gambling, alcohol and tobacco, arms and ammunition or adult entertainment.
The Fund invests mainly in money market instruments, such as government treasury bills, commercial papers and bankers acceptances. The Fund is managed to preserve capital and to generate a steady income.
If you are looking to build a nest egg for the future
If you can only invest a small amount at a time
What are the key benefits?
Lower risk because your money is spread over different companies and asset types. When the value of one asset in the fund falls, another may rise. This means your risk overall is significantly less than when you put your money in a single investment.
Better rates because by pooling money with other investors your combined buying power is greater than if you invested on your own and you have access to some assets and markets that you would not have if you were investing smaller amounts on your own.
Reduced costs because some costs and charges are spread across all investors in the fund. Therefore, you can carry out large transactions for much lower cost than if you were buying the assets directly.
Saved time and effort with an experienced manager who invests on your behalf. Your money is managed by a professional with expertise and access to market and research information you may not have, who is able to monitor the investment better because it is his full-time job.
Easy access to your money by being able to cash in your investment at any time. You can make additional contributions or withdrawals to your investment whenever you want.
Simple to use and monitor. You can make automatic transfers to or from your bank account, and check your funds performance figures conveniently online. You also receive regular reports on how your money has been invested, and can choose whether you want your returns to be paid out as income or automatically reinvested.
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