The term Islamic Investment Fund means a common interest group where investors meet their surplus money in order to invest and make a profit in accordance with the precepts of Islamic law.
Purchasers of such funds receive a document certifying their subscription and designating them as beneficiaries of a portion of the profits generated by the fund. These documents are subject to two basic conditions:
No fixed income allocated on the basis of their face value, providing an income in proportion to what the fund earned. Neither the principal investment, nor a rate of profit (related to principal) can be guaranteed .
The amounts pooled must be invested in a lawful activity, meaning that the investment channels are subject to Islamic principles.
Amounts are invested in shares of listed companies, profits are made largely by buying stocks and selling them.
Similarly, a company whose business is lawful, whose borrowings and investments do not use bank interest: the shares of that company can be managed without any legal reserve.
But a company does its business on a legal concept, its loans are based on the value they place their surplus money on accounts paid by the interest or equity products safely.