Sukuk
صكوك
An Islamic bond that gives you a share of an asset's profits instead of fixed interest.
Unlike a conventional bond where you lend money and receive interest, a sukuk represents ownership in an underlying tangible asset. Your return comes from the real income that asset generates. Think of it as owning a very small slice of a building or infrastructure project.
Islamic perspective
Sukuk are permitted because returns are asset-backed and variable, rather than predetermined interest. The investor takes on genuine economic risk.
Example
The UK Government issued a £500m sovereign sukuk. Investors effectively own a share of government buildings. The rental income from those buildings provides the periodic payments, rather than interest.
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