Investment Vehicles For Emerging Muslim Economy

1494 Words Apr 27th, 2015 6 Pages
Investment Vehicles for Emerging Muslim Economy: Which is which?

Introduction

Capital market play vital role in financial growth. Mutual fund is one of the securitization vehicles that commonly practice in today’s modern economics environment. Levy and Post (2005) mentioned investors, regardless of the type of investment they choose, have one common goal which is to get return out of their investment. Investors often have risk and return trade-off in determining their desire return. Thus, it is important to understand the financial stance of the investors in order to determine types of investments that suit them. This essay’s aim first to discuss 2 types of mutual funds, open end and close end investment. Going further is to relate them with the emerging Muslim’s economy conditions. It is believed that Muslim’s economy is way far behind due to their weakness in the capital market. Honohan (2008) discovered more than 70% Muslims do not utilize financial services due to their concern of the financial instrument principle which seems to them contradict with the Islamic law. Second to suggest the type of funds that suitable for the emerging Muslims economy in order to promote social wealth and long-suffered poverty issues amongst the country.

Open-end Vs Close-end Fund

Diagram 1.0 Overview of Mutual Funds

Diagram 1.0 illustrated overview of mutual funds type available in the market. This section will compare and contrast in 5 dimensions, the advantages and disadvantages…

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