Despite the dramatic turn of 2020, mutual funds like Sukuk funds performed excellently. Sukuk funds are part of a group of mutual funds known as halal funds.
Today, we are excited to announce the listing of a Sukuk fund by United Capital, on Cowrywise. This brings the total number of mutual funds on Cowrywise to 20 and deepens our commitment to helping first-time investors get started.
United Capital is a leading fund manager in Nigeria. According to our 2020 mutual funds’ report, it is the 4th largest fund manager in the country. With this new addition, it retails six mutual funds on Cowrywise.
What are halal funds?
These are special mutual funds that make it possible for anyone — regardless of their faith — to invest. They work with the principle of generating returns from profit-sharing instead of the regular style of interest charged on loans.
>>Learn More: How halal funds work
What is a Sukuk fund?
A Sukuk fund is a type of halal fund. It pools money from various people like you to invest majorly in Sukuk bonds. These are quite different from regular bonds.
Usually, when a regular bond is issued those who invest in it earn via a set interest rate. However, in the simplest form, a Sukuk bond offers returns based on earned income.
For example, if a bond is issued to raise cash for the building of a bridge with a toll gate, investors earn from the toll paid by users of the bridge. So, a Sukuk fund is one that invests in such bonds.
A bond is a long-term loan agreement between two parties; at an agreed rate.
Why are Sukuk funds great?
Let’s go back to our earlier brag about halal funds. Last year, across the world, halal investments performed better than their counterparts.
Bringing it home, the Bloomberg tracker for major mutual funds in Nigeria rated halal funds high last year. The average returns on various types of mutual funds placed halal funds as the second best performing in Nigeria. They came right after equity funds which are more volatile.
Sukuk funds are categorized as medium-risk funds on Cowrywise.
How does United Capital Sukuk Fund Work?
Asides from being regulated by the Securities and Exchange Commission, with United Capital, you are assured of having some of the best hands in the country handle your money. As we mentioned earlier, they are currently the 4th largest fund manager in Nigeria. The Sukuk option is the latest addition to their portfolio of high-flying funds.
This exciting fund of theirs allocates 70% of your money to Sukuk bonds. The leftover 30% is invested in other secure halal instruments. To make things even more exciting, you get to invest with any amount at anytime here.
Between January 1 and March 19, 2021, the United Capital Sukuk fund has earned 2.42%
Speaking on this fund, Emmanuel Akehomen — Head, Portfolio Management, United Capital— had this to say:
“The objective of the fund is to provide investors with stable and competitive returns through investments in short, medium and long-term halal investment products, whilst ensuring the preservation of capital and maintaining a reasonable degree of liquidity. This way, you don’t have to worry about dishonouring your ethical values when making investment decisions.”
Agreeing with this statement, Yarmirama Ashama— our product manager — described the addition of the fund as: “A furtherance of access to investment products for anyone regardless of their values or income. We’re steadily working at Cowrywise to make mutual funds, in essence, investment products more accessible to retail investors, especially with respect to inclusivity.”
Want to get a slice of this fund now? Do these:
- Get the updated Cowrywise app here
- Signup/Sign in
- Tap “Invest in Mutual Funds” and select “United Capital Sukuk Fund”.
If you have any questions, drop a comment and we’ll respond.