Breakdown
How it works
Sukuk pay periodic profit distributions from an underlying asset or venture and return face value at maturity. Buying below par raises the yield to maturity above the profit rate; above par lowers it. Government sukuk (Saudi, UAE, Qatar, Malaysia, UK) are the benchmark; corporate sukuk pay a spread above them.
Formula
Worked example
1,000 face, 980 price, 5% semi-annual, 5 years: YTM 5.47%, current yield 5.10%, total profit 250 + 20 capital gain.
Frequently asked questions
How can retail investors buy sukuk?
Through sukuk funds and ETFs (e.g. HSBC, Franklin, SP Funds), Saudi Tadawul sukuk market, UAE broker platforms, or UK ISAs via Islamic platforms.
Are sukuk safe?
Credit risk like bonds — sovereign GCC sukuk are investment grade; corporate and perpetual sukuk carry more risk. Price falls when yields rise.
Is sukuk income zakatable?
Yes — the market value of tradeable sukuk is part of zakatable wealth, and the profit received is income.