Q&A: What is Sukuk Fund?

Query by ng k: What is Sukuk Fund?
What is Sukuk Fund?

Ideal answer:

Answer by peterleewaih
Sukuk in basic might be understood as a shariah compliant ‘Bond’. In its simplest kind sukuk represents ownership of an asset or its usufruct. The claim embodied in sukuk is not merely a claim to money flow but an ownership claim. This also differentiates sukuk from traditional bonds as the latter proceed over interest bearing securities, whereas sukuk are fundamentally investment certificates consisting of ownership claims in a pool of assets. Sukuk (plural of word sak) had been extensively used by Muslims in the Middle Ages as papers representing financial obligations originating from trade and other commercial activities. Even so, the present structure of sukuk are distinct from the sukuk originally used and are akin to the traditional idea of securitization, a procedure in which ownership of the underlying assets is transferred to a big quantity of investors via certificates representing proportionate worth of the relevant assets.

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