Halal investments present an inclusive option that allows anyone to invest, particularly Muslims, who disagree with earning interests. Now, if interests are not paid how do halal investments earn money? Various ways. Our current halal fund from Lotus invests in three of these options:

Sukuk bonds (Similar to regular bonds)
Ijarah (Lease agreements)
Murabaha (Cost-plus arrangements)

Let me break things down starting with Sukuk bonds. Under this arrangement, you provide funds for an entity over a set period of time to embark on a project. Once the project is done, you get to earn returns from its income-generating activities, still within an agreed period. This is quite different from paying interest on a loan to fund a project; regardless of whether it making profits or not.

Moving on, we have the Ijarah which earns returns from leasing out an asset. For example, Basirat leased a building to Raji to use it as a shop. Under Ijarah, the rental fee over the set period must be predetermined. That is, it cannot change during this period.

Finally, we have the Murabaha. Under this arrangement, an item is sold to an individual with a predetermined margin. This individual then pays back the cost of this item plus the margin, over a period of time.

We currently have the;

1. Lotus Halal Investment Fund

2. Lotus Halal Fixed Income Fund

3. Stanbic IBTC Shari'ah Fixed Income Fund

4. United Capital Sukuk Fund

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Its returns are paid quarterly. The price per unit of the fund changes daily based on market trends.

For example, the unit price could be N1 today and may increase to N2 tomorrow, and vice versa. When you buy funds, units are issued to you based on the current price.

Your value every day is the price of the fund per unit multiplied by the number of units you have bought so far.