Islamic Fund Management
111
Type of
Fund
Investment
Strategy
Asset Allocation/ Authorised Investment Product Suitability
Shariah-
Compliant
Income/
Money
Market
Fund
To provide
regular and
steady income to
investors.
 Income fund: government securities,
cash in bank accounts, money market
placements, deposits, certificate of
musharakas (COM) and sukuk.
Asset allocation Ratio
Exposure to CFS and spreads Below
40% of
net
assets
Cash and near-cash instruments At least
25%
Non-traded securities, with more
than 6 months’ maturity which is
not a marketable security
Less
than
15%
 Money market fund: government
securities, cash and near-cash
instruments.
Asset Allocation
No direct/indirect exposure to equities, CFS
and spread transactions.
Investors who seek:
 Moderate risk and
return potential.
 Protection of
investments from
stock market
volatility, while
providing
diversification to the
overall investment
portfolio.
 Long-term regular
income.
Shariah-
Compliant
Fund of
Funds
To invest in
other mutual
funds.
 Can only invest its net assets in other
schemes.
 Every scheme must mention its type
with respect to the asset class, e.g. equity
fund of funds or income fund of funds, in
its offering document.
 Every scheme will be invested in either
the units of other collective investment
schemes as per its investment policy, or
in cash and/or near-cash instruments,
including cash in bank accounts
(excluding TDRs).
 Every scheme must ensure that it does
not invest in the seed capital of any other
collective investment scheme.
Investors who seek:
 Different allocation
strategies that suit
varying risk profiles.
 A targeted
investment strategy
to achieve desired
financial goals.
 Investment in a
disciplined manner
through risky funds,
but have the
comfort of not being
penalised should
they miss any
monthly payment.
Source: SECP Circulars on Categorization of Open-End Collective Investment Schemes10
10 Note that the SECP, as at end-2017, has been issuing a series of circulars on the categorisation of open-end CIS starting
with Circular No. 7 of 2009, followed by other circulars, including Circular No. 16 of 2010, Circular No. 4 of 2011, Circular No.
32 of 2012, Circular No. 9 of 2013, Circular No. 3 of 2015, Circular No. 1 of 2016 and Circular No. 10 of 2016.