Performance Persistence of Islamic Equity Mutual Funds
AbstractThe debate over the under-performance or the over-performance of Islamic funds is not over yet. Hence, our literature review exhibits that all the previous works studied the Islamic equity funds without exploring the persistence of their performance, even if this issue is very important to address several questions in financial management. Our article contributes to the current literature by addressing this shortage; we proceed further with the aim of finding any consistency in funds’ performance. Using a sample of 111 Islamic equity funds over the period 2005 to 2011, the study is carried out through applying different performance measures and non-parametric tests of performance persistence over three equal sub-periods. Our measures of performance show that Islamic funds do not constitute a homogenous group, but over the whole period, Malaysian and Saudi Arabian funds perform better. We find evidence that supports non-persistence in performance or rather the persistence of non-performance of Islamic mutual funds during and after the last financial crisis. This raises the question of the management strategies implemented by the banks managing Islamic funds.
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Bibliographic InfoPaper provided by Department of Research, Ipag Business School in its series Working Papers with number 2014-115.
Length: 19 pages
Date of creation: 25 Feb 2014
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-03-08 (All new papers)
- NEP-ARA-2014-03-08 (MENA - Middle East & North Africa)
- NEP-FMK-2014-03-08 (Financial Markets)
- NEP-SEA-2014-03-08 (South East Asia)
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