Halal Islamic Mutual Fund Investing
A mutual fund is a collection of individual securities managed on behalf of its investors by a professional money manager. This collection of assets, otherwise known as a portfolio, can hold combinations of stocks, bonds, cash or
derivatives sold on securities markets around the world.
Basically, when you invest in a mutual fund, you're pooling your money with a slew of other investors who share similar investment goals. In being "part owner" of a mutual fund, you're given the opportunity to receive the type of
professional money management typically only available to investors with larger portfolios.
Mutual funds have become popular because they offer the following advantages:
- Diversification. A single mutual fund can hold securities from hundreds or even thousands of issuers, far more than most investors could afford on their own. This diversification potentially reduces the risk of a
serious loss due to problems in a particular company or industry.
- Professional management. Few investors have the time or expertise to manage their personal investments every day, to efficiently reinvest interest or dividend income, or to investigate the thousands of securities
available in the financial markets. They prefer to rely on a mutual fund's investment adviser. With access to extensive research, market information, and skilled securities traders, the adviser decides which securities to buy and
sell for the fund.
- Liquidity. Shares in a mutual fund can be bought and sold any business day, so investors have easy access to their money. While many individual securities can also be bought and sold readily, others aren't widely traded.
In those situations, it could take several days or even longer to build or sell a position.
- Convenience. Mutual funds offer services that make investing easier. Fund shares can be bought or sold by mail, telephone, or the Internet, so you can easily move your money from one fund to another as your financial
needs change. You can even schedule automatic investments into a fund from your bank account, or you can arrange automatic transfers from a fund to your bank account to meet expenses. Most major fund companies offer extensive
recordkeeping services to help you track your transactions, complete your tax returns, and follow your funds' performance.
Please note that Mutual Fund Investing involves risks; loss of principal is possible.
Investing Resource Center Overview.
How to Get Started in Investing.
It Pays to Start Early.
Retire in Style.
Periodic Investment Plans do not assure a profit and do not protect against a loss in declining markets.
Mutual Fund investing involves risk; principal loss is possible. The Fund invests in foreign securities which involve greater volatility and political, economic, and currency risks and differences in accounting methods. It is
possible that the Islamic Shari'ah restrictions placed on investments and reflected in the main investment strategies may result in the Fund not performing as well as mutual funds not subject to such restrictions.