mutual funds in Islamic banking special topics of finance project name: Fawzeyyah AlHajiri

: Introduction Muslims represent around one-fifth of the world population with more than $800 Billion to invest. This amount is growing by 15 per cent annually. Only a small portion Of the available funds are invested in Islamic products The Islamic mutual funds market is one of the fastest rising segments within the Islamic financial system

muslims can invest their funds in such businesses that meet some specific conditions, as : follows The investment has to be made in businesses that do not violate shari’a 2. In the case where the main line of business is lawful but the company is involved in interest-related activities, shareholders have to express their disapproval for such dealings wherever possible 3. The income generated from dividends has consequently to be purified from such activities by allocating a percentage of that dividend to designated charities in proportion to the income generated from interest-related activities. 4. The shares of the company can only be negotiable if the business owns some illiquid assets

Marketing and distribution of Islamic mutual funds Islamic-based mutual funds offer Muslim investors the double advantage of mutual fund investment and compliance with Islamic guidelines. The tolerability of common stock screening guidelines by an overwhelming majority of shari’a scholars has not been deciphered into more demand for such investing mechanisms. Sharpe measure showed that the performance of the Islamic mutual funds compared to both benchmarks during the second period dominated by recession is better than that during the first sub-period. This might imply that the performance of these funds is improving with time, Another implication from this result is that Islamic mutual funds Might be a good hedging investment for any equity investor, if used to hedge against market downturns and recessions.

Conclusion : This study has examined Islamic mutual funds and the fundamentals of investing in such venues. In doing so, it has explored the dynamics of Islamic mutual funds, their governance and control .