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There are myriad of investment avenues for customers, it ranges from mutual funds, properties, shares, sukuk, etc. Let’s talk about mutual fund today and do you know there are some differences between conventional mutual fund and Shariah-compliant mutual fund?

What is the difference?

Like conventional unit trusts, Shariah-compliant unit trusts are collective investment funds that offer a diversified portfolio of shares and fixed-income securities. However, Shariah-compliant unit trusts are governed by the requirements of Shariah law and the principles of Islam and thus should have a portfolio that is Shariah-compliant.


This means that any Shariah-compliant unit trust should have a portfolio free from activities prohibited by Islam, such as interest (riba), gambling (maysir) and ambiguity (gharar). It excludes investment in companies and sectors that are primarily involved in Shariah non-compliant activities such as products or services related to gambling, alcoholic beverages etc.

Why invest in Shariah-compliant unit trusts?

For some customers, investing is not just about growing their future wealth, but also staying to personal values. Shariah-compliant unit trusts takes into account of business sustainability and social responsibility, for investors who care about such issues another avenue when selecting funds.


It works on the philosophy of prohibiting transactions that are considered immoral, and promoting greater social justice by sharing risk and reward. Due to these tenets and principles, Shariah-compliant unit trusts are considered a form of socially responsible investment.

Part of the screening process for determining whether an equity asset is Shariah-compliant involves considering a company’s financial standing, (i.e. how much debt the company carries). Islamic equity funds avoid investing in firms that carry very high levels of debt. Therefore, Islamic funds may be considered more conservative and slightly less risky than some conventional equity funds.


Like conventional unit trust funds, Shariah-compliant unit trusts are professionally managed. As such, your capital is invested into a portfolio that has already been researched and screened. In addition to that, it invests in any fund that purchases assets from multiple companies reduces the risk of losing capital from natural disasters and company financial shortcomings. Investors can liquidate when investing in a fund instead of putting money into a fixed-term investment, you can buy and sell your investment whenever you need.


With CIMB, you can start investing via CIMB Clicks with a minimum investment amount starting from RM1,000 and with more than 100 Unit Trust funds that suit your risk appetite ranging from all asset classes. Should you have any questions, you can always reach out to any of our Relationship Managers.


The contents in this document are reasonably believed to be correct at the time of issue and are subject to change.


CIMB Bank Berhad (“CIMB”) makes no express or implied representation, recommendation or warranty as to the accuracy, desirability, reliability, or completeness of any information and opinion relating to any matter contained in this document.


The information in this document is subject to change and correct at the time of issue. Neither does this document purport to contain all the information that a prospective investor may require. Because it is not possible for CIMB to have regard to the specific investment objectives, financial situation and particular needs of each person who reads this document, the information contained in it may not be appropriate for all persons.


CIMB is not acting as advisor or agent to any person whom this document is directed. You, the recipient of this document must consult your own professional financial, legal, accounting, taxation and all other advisers and make your own independent assessment of the contents of this document. Under no circumstances should you treat or rely on any of the contents of this document as advice in relation to any of your financial, legal, accounting, taxation, technical, investment or any other matters. 


CIMB , CIMB’s  subsidiaries , CIMB’s holding company , the holding company and subsidiaries of CIMB’s  holding company and all companies which are in any way or howsoever related , associated or affiliated with CIMB and or CIMB’s holding company  (the “CIMB Group”) or any one or more of them may act as a principal or agent in any transaction contemplated by this document, or any other transaction connected with any such transaction, and may as a result earn brokerage, commission or other income.


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