---
title: "What is Islamic collective investment scheme? | IslamicOpenFinance™"
description: "An Islamic fund: investors pool money in units of equal value, managed under Shariah rules, sharing in the fund's profit or loss."
url: https://islamicopenfinance.com/glossary/islamic-collective-investment-scheme/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Sukuk and capital markets](https://islamicopenfinance.com/glossary/#sukuk)

Sukuk and capital markets

# Islamic collective investment scheme

An Islamic fund: investors pool money in units of equal value, managed under Shariah rules, sharing in the fund's profit or loss.

An Islamic collective investment scheme is a structured scheme in which investors pool capital in a fund by subscribing to units or shares of equal value, which represent ownership of the fund's undivided assets and a right to share in its profits or losses. IFSB-21 adds that the scheme is financially accountable separately from its sponsor and is established and managed in accordance with Shariah rules and principles. Sukuk are excluded from this definition.

## Sources

- [IFSB-21 Core Principles for Islamic Finance Regulation (Islamic Capital Market Segment), 2018: Definitions, Islamic collective investment scheme](https://www.ifsb.org/wp-content/uploads/2023/10/IFSB-21-December-2018_En.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Shariah screening** Checking whether a company's business and finances meet Shariah criteria before it can be held in an Islamic fund or index.](https://islamicopenfinance.com/glossary/shariah-screening/) [**Sukuk** Certificates of equal value representing undivided shares in the ownership of assets, usufruct, services or a project.](https://islamicopenfinance.com/glossary/sukuk/) [**Purification of income** Giving away, usually to charity, income from a non-compliant source or a Shariah breach, so the institution does not benefit.](https://islamicopenfinance.com/glossary/purification/)

**Sukuk and capital markets**

1. [Sukuk](https://islamicopenfinance.com/glossary/sukuk/)
2. [Sukuk al-ijarah](https://islamicopenfinance.com/glossary/sukuk-al-ijarah/)
3. [Sukuk al-musharakah](https://islamicopenfinance.com/glossary/sukuk-al-musharakah/)
4. [Sukuk al-mudarabah](https://islamicopenfinance.com/glossary/sukuk-al-mudarabah/)
5. [Sukuk al-wakalah](https://islamicopenfinance.com/glossary/sukuk-al-wakalah/)
6. [Periodic distribution](https://islamicopenfinance.com/glossary/periodic-distribution/)
7. [Shariah screening](https://islamicopenfinance.com/glossary/shariah-screening/)
8. [Asset-backed and asset-based sukuk](https://islamicopenfinance.com/glossary/asset-backed-sukuk/)

[All 221 terms](https://islamicopenfinance.com/glossary/)