An exchange-traded fund (ETFs) is a type of investment fund and exchange-traded product, that is, they are traded on stock exchanges. An index fund is an investment that tracks a market index, typically made up of stocks or bonds. Both index funds and ETFs fall under the heading of indexing. Both involve investing in an underlying benchmark index. The primary reason for indexing is that index funds and ETFs can often beat actively managed funds in the long run. Lower expense ratios can provide a slight edge in returns over index funds for an investor, at least in theory. ETFs can have higher trading costs, however. But the primary difference is that index funds are mutual funds and ETFs are traded like stocks. The price at which you might buy or sell a mutual fund isn’t really a price, it`s the net asset value (NAV) of the underlying securities. And you will trade at the fund`s NAV at the end of the trading day.
In addition to that, Islamic pawn broking system might be considered as the best alternative of conventional pawn broking based on interest rate. Baht and Sinnakkannu had observed the subsequently benefit of Islamic pawn broking; the first point is ar-Rahnu based on Islamic Shariah and free from Riba loan, second thing is easy to applications, quick responses, lower fee than the conventional pawn broking scheme, fixed storage fee, no punishments after delaying the term, guaranteed protection of the gold, long financing maturity, and surplus auction income backed to the customer. Bhatt, P., Sinnakkannu, J. (2008).
What do we mean by Supporting Contracts?
“They are called supporting contracts because they don’t usually standalone by themselves. Rather, they will be offered together with other types of contracts, although in recent years, we have seen products offered solely and exclusively adopting some of them as a standalone package. In most commercial banking practice, these products will be offered by the bankers as a service contract and thus some amount of payment is charged for the rendering of it.” (Mohd Johan Lee, 2017)
The Rationale on the Application
Most of Islamic-based law (shariah) would not talk much regarding the identification of the cause/ rationale of the hukm.
To make further identification of the reasoning behind a product of a hukm, Most of Muslim Jurist would depend on epistemology of Maqasid al-shariah or Maslahah.
“Time and time again, the Qur’an invites the believers to rational enquiry, as opposed to blind imitation, in the acceptance of its messages”. (Ahmad Ahsan)
“A rational approach to the discovery and identification of the objectives and intentions of the Lawgiver necessitates recourse to human intellect and judgment in the evaluation of the ahkam.” (M. H. Khamali)
Purpose: Islamic Bank acts as guardianship of funds.
