Sukuk

Sukuk are a type of investment certificate which are compliant with Shariah law. Lending out money in exchange for interest is not permissible under Shariah law, which makes conventional interest-bearing bonds a poor choice for Shariah-conscious investors.

Although Sukuk are often referred to as Islamic bonds, they do not bear interest. Instead, Sukuk are certificates of ownership in investments through which investors can profit in the way of dividends.

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Daniel Dreier is editor and personal finance expert at moneyland.ch.

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