Sukuks, also known as Islamic bonds, are becoming increasingly popular among investors. Financial instruments such as these adhere to Islamic principles, prohibiting interest-based transactions. Investors can earn returns without violating their religious beliefs with sukuks, which offer a profit sharing mechanism. We show you how to earn over 20% profit through sukuks.
What Are Sukuks?
Islamic principles govern sukuks, which are financial instruments. There is no interest involved in sukuk transactions, unlike conventional bonds.
Rather than representing ownership in a project or asset, sukuks represent ownership in the underlying asset. Sukuks are based on profits generated by the underlying assets.
Various Kinds Of Sukuks Can Be Found In Market
There are many types of sukuks that are available on the market at the moment, each with its own advantages and disadvantages. Among the most common types of these are:
01. Ijarah Sukuk
Asset-backed securities such as ijarah sukuks represent ownership in tangible assets like real estate or equipment. To determine the return on investment, the asset must generate rental income.
02. Musharakah Sukuk
Generally, musharakah sukuks are equity-based securities, representing ownership in a company or project through a long-term investment. An investment in a project or business will generate a profit, which will be used to determine the return on investment that will be generated.
03. Murabaha Sukuk
The murabaha sukuks are debt securities representing ownership and ownership rights in goods or commodities traded. Therefore, an investor’s return on investment is determined by the sale of commodities or goods as the basis for their calculation.
Investment In Sukuks Offers Some Benefits For Investors
A Sukuk investment offers several advantages, including:
1. Diversification
The ability to invest in Sukuk adds another dimension to the diversification of an investor’s portfolio. Sukuks are asset-backed securities, and as such, the risk is spread over a variety of assets or projects, depending on the type of investment.
2. High Returns
Comparatively to other fixed-income instruments, Sukuks have a high return. In 2024, Standard & Poor’s became aware that the average yield on global sukuk was 3.3%, based on a report by the company.
3. Low Risk
It is considered a low-risk investment since sukuks are tangible assets or projects, and so are considered low-risk investments. If there is a default, investors can claim a share of the assets or projects underlying the default.
4. Socially Responsible
It is socially responsible to invest in Sukuk as they support projects that adhere to Islamic principles. Typically, these projects are focused on infrastructure, healthcare, and education, but they can also address other issues.
Some Tips On How To Invest In Sukuk
These steps will help investors earn over 20% profit from sukuks:
- Suukuks are Islamic financial instruments similar to bonds that follow Islamic principles. Governments and corporations issue Sukuk to raise money. Investing in Sukuk returns profits generated by their underlying assets.
- Sukuks come in various forms, including asset-based securities, investment-based securities, and hybrid securities. Therefore, investing goals and risk tolerance should guide Sukuk’s choices.
- Invest in reliable issuers: Investors should select reputable issuers with a good track record of timely payments. In this way, default risks are reduced, and profits are higher.
- You should monitor the market: The market can affect returns. Therefore, monitoring the market and adjusting investments according to market conditions maximizes profits.
- Investors can reinvest return on sukuks to achieve higher profits over time by reinvesting returns.
- Sukuk experts are the best resource for investors to identify the right sukuk investment options.
Sukuks allow investors to earn over 20% profit and achieve their financial goals if they follow these steps.
How To Earn Over 20% Profit Through Sukuks
Following these steps, investors can earn over 20% profit from sukuks:
01. Research
Investors must thoroughly research the underlying assets and projects before investing in Sukuk. As part of this analysis, the issuer’s creditworthiness and financial performance are assessed.
02. Identify High Yielding Sukuks
The best sukuks for investors are those with high yields. Sukkuks issued by reputable issuers with a proven track record of financial stability are included in this category.
03. Invest In Portfolio Of Sukuks
Sukuks offer investors a wide range of investment opportunities. Spreading the risk and optimising returns is made possible by this approach.
04. Hold Sukuks To Maturity
To maximise their return on investment, investors should hold sukuks until maturity to receive the full rate of return. If you sell a sukuk before the maturity date, you may incur a loss or receive a lower return.
